Written By: Bandana Gupta

If you want to start a hotel franchise and see results quickly, an OYO Hotels franchise is a great option. It offers low initial investment, good earning potential, and the flexibility to operate in multiple locations.

Learn why OYO franchises let you join a global brand changing hospitality in 80 countries.

About OYO

Started in 2013 by Ritesh Agarwal, OYO Rooms quickly became one of India’s largest hotel brands. It operates in over 230 cities across India and serves major markets including the United States, Europe, the United Kingdom, India, the Middle East, Southeast Asia, and Japan.

OYO has hosted over 180 million guests from more than 120 countries, offering quality rooms at affordable prices. 

Oyo Hotel Franchise Cost in India 2026: Complete Breakdown for Investors

The investment to start an OYO franchise mainly depends on your property type and location. Here’s a simple breakdown of the costs in 2025.

1. Franchise fee Standard OYO hotels need a franchise fee of ₹2–5 lakh, which includes brand usage, staff training, access to the booking platform, and marketing support. Premium formats, such as OYO Townhouse, require a higher investment of ₹1–2 crore.
2. Set up and renovation Costs include renovation, interiors, furniture, signage, and branding as per OYO standards. Budget properties typically require ₹10–30 lakh, while premium properties can cost up to ₹1 crore.
3. Technology and systems OYO provides its tech systems for bookings, property management, security, and staff training. These are mostly included in the initial setup.
4. Working capital You’ll need extra funds to manage daily operations, such as staff salaries, utilities, maintenance, and marketing for the first 3–6 months.

Choose Your OYO Investment Model: Budget or Premium

Budget Hotels / Existing Rooms Ideal for smaller properties or existing guest houses.

• Space Required: 300–1,000 sq. ft
• Investment: ₹2.5–5 lakh for branding, tech integration, and basic upgrades
• Revenue Share: OYO keeps around 10%
• Returns: Positive cash flow possible within the first year, with break-even in about 12 months

OYO Townhouse / Upscale Properties Designed for boutique-style, premium stays.

• Space Required: 3,000–5,000 sq. ft
• Investment: ₹1–2 crore, including renovation, interiors, equipment, and licenses
• Revenue Share: OYO takes 22–25%, based on property scale
• Returns: Expected ROI of up to 40% by the 7th month, with break-even in 12–18 months

OYO Franchise Cost & ROI Snapshot

Key Costs to Consider

• Franchise fee for brand and platform access
• Property cost (lease or purchase)
• Renovation and branding as per OYO standards
• Working capital for daily operations

What Investors Should Know

• Budget OYO properties require a lower initial investment, while the Townhouse segment offers comparatively higher return potential.
• Location plays a big role in profitability.
• The growth of OYO is driven by its technology-led franchise model

How Much Do You Really Spend to Start an Oyo Hotel in India (2026)

Investing in an OYO hotel varies by model:

• OYO hotel: ₹75 lakh–₹1.7 crore (including ₹2–5 lakh franchise fee and renovations)
• OYO Townhouse: ₹1 crore and above, with the franchise fee alone ranging between ₹1 crore and ₹ 2 crore.

Hidden & Ongoing Costs to Consider

Long-term profitability is influenced by several recurring costs that are often overlooked, including

• Revenue sharing: wherein OYO typically charges a commission of 10–25% of room revenue.
• Technology maintenance: Ongoing system and platform support
• Marketing contributions: Brand and visibility campaigns
• Renovation upgrades: Periodic updates to meet OYO standards
• Staff training: Regular training to maintain service quality

OYO assists the franchise partners by clearly explaining these costs through financial counselling during the early stages of operations.

Cost Comparison: Budget vs Premium Model

Choosing the Right Budget Stay: OYO Vs FabHotels, Treebo, or Boutique 

OYO (Aggregator Model)

• Pros: Massive inventory, dynamic pricing for great deals, widely available across India, and convenient apps.
• Cons: Service quality may vary, some operational issues can occur, and owner involvement is limited.
• Best For: Travelers hunting deals or prioritising location/price over perfect standardisation.

FabHotels & Treebo (Hybrid/Managed Models)

• Pros: Strong quality control, cleaner rooms, reliable amenities (Wi-Fi, 24/7 support), Treebo offers a money-back guarantee.
• Cons: Smaller inventory, slightly pricier than OYO’s cheapest options.
• Best For: Travelers seeking consistent, dependable budget stays.

Independent Boutique Hotels

• Pros: Unique ambience, personalised service, local flavour, standout decor/architecture.
• Cons: Quality levels may vary, the booking process may be less technologically seamless, and operational standards can be inconsistent.
• Best For: Experiential travellers who want local immersion and are willing to research.

When to Pick Which:

• Lowest Price: OYO (check property reviews carefully).
• Reliable Budget Stay: FabHotels or Treebo.
• Unique Experience: Independent boutique hotels with strong reviews

OYO Franchise Opportunity: Investment Outlook for 2026

• Low Entry Cost: An OYO franchise can be started with an investment of around ₹2–5 lakh, making it an affordable way to enter the hospitality business.
• Quick Returns: Enjoy a promising 20% ROI within a year, helping you start seeing profits faster
• Flexible Locations: OYO adapts to properties of different sizes, from 300 to 3,000 sq. ft.
• Global Presence: Operating in 80 countries, OYO offers strong brand visibility and recognition.
• End-to-End Support: OYO provides operational, marketing, and technology support to help partners run the business efficiently.

OYO Franchise: Key Benefits & Potential Challenges

 Why It Works

• Low-Capital Entry and Strategic Expansion: Launch with budget-friendly formats and progressively transition to higher-end offerings.
• Tech-Enabled Operations: ORBIS manages pricing, bookings, and revenue efficiently.
• Full Support: OYO provides help with operations, marketing, training, and audits.

Things to Watch Out For

• Quality Control: Certain properties may experience inconsistencies in service standards, guest complaints, or issues related to unreliable reviews.
• Payment Delays: Occasional late payouts reported by partners.
• Brand Perception Challenges: The brand is still perceived by some customers as being associated with budget or lower-quality accommodations.
• Higher Revenue Sharing: Premium Townhouse models typically involve commission rates of 20–25%, which can impact overall profit margins.

Due Diligence Guidelines for Prospective Franchisees

• Inspect Multiple Properties: Evaluate both Budget and Townhouse hotels to assess service quality, guest experience, and maintenance standards.
• Consult Existing Franchisees: Gather candid feedback regarding payments, support, and operational challenges.
• Thoroughly Review the Agreement: Carefully examine clauses related to exit terms, renewals, penalties, and minimum operational standards.
• Maintain a Financial Reserve: Set aside 6–12 months of funds to cover the ramp-up period and unforeseen delays.
• Enhance Online Presence: Ensure consistently high ratings on the OYO app, Booking.com, and other booking platforms to optimise occupancy levels.

OYO FRANCHISE: QUICK REFERENCE FOR INVESTORS

OYO Franchise: Eligibility & Ideal Candidate

1. Property Requirements:

• Budget Model: Typically comprises a minimum of 12–15 rooms within a 3–4 storey building.
• Townhouse/Flagship: 3,000–5,000 sq. ft. modern property

2. Legal & Licensing:

• Clear property title, no disputes
• Valid licenses (fire safety, trade, GST)

3 . Capital Investment:

• ₹2–5 lakh for budget models
• ₹50 lakh–₹2 crore for Townhouse/premium properties

4. Operational Readiness:

• Ability to manage staff, ensure compliance, and maintain quality
• Participation in OYO training programs

5. Candidate Profile:

• 21+ years old, basic business acumen
• Hospitality experience is helpful but not mandatory.

6. Agreement Term:

• Standard 5-year franchise, renewable under agreed terms

Step-by-Step Process to Start an Oyo Hotel Franchise in India 2026

Sections:

1 . Submit Your Inquiry:Visit OYO’s official site and complete the partner application form.

 2.Initial Screening:OYO reviews your property details, ownership, and location.

3  . Site Inspection:Experts check infrastructure, room count, and property title.

4. Renovation and Investment Assessment: OYO evaluates the necessary upgrades and associated capital expenditure.

 5.Franchise Agreement and Training: Execute a five-year franchise agreement and complete training to gain proficiency in OYO systems, including the ORBIS application.

6. Continuous Monitoring and Support: Access technology-driven dashboards, periodic field evaluations, marketing assistance, and performance-based incentives.

Conclusion:

An OYO franchise is a low-cost way to turn a property into a branded hotel. With just ₹2–5 lakhto get started, owners benefit from OYO’s tech, bookings, and reach. Premium formats like Townhousecan deliver high returns (35–40%+)if managed well.

That said, success depends on location, quality, and strong operations. Since OYO has had mixed partner experiences in the past, careful due diligence is essential before investing.

Disclaimer: The brands mentioned in this blog are the recommendations provided by the author. FranchiseBAZAR does not claim to work with these brands / represent them / or are associated with them in any manner. Investors and prospective franchisees are to do their own due diligence before investing in any franchise business at their own risk and discretion. FranchiseBAZAR or its Directors disclaim any liability or risks arising out of any transactions that may take place due to the information provided in this blog.