Written By: Gouri Ghosh

Franchising is not new in India. Today, India has over 4,600 franchise brands and around 2 lakh franchise outlets in India. This explains why many people are looking for franchise opportunities in India rather than beginning on their own.

However, here is the truth about why most people fail after investing. A famous brand name does not guarantee that it will provide you with a good profit. It is  about its “business model.” Some investors fail to consider this and then realize that it doesn’t work for them.

So before investing in startup franchises or company-owned stores, ask yourself one question:

Where do you make more money, in a franchise store or a corporate-owned store?

This blog will give you this answer.

Franchise vs. Company-Owned Stores: A Review of the Business ModelOpportunities

Before investing, you need to understand the distinction between company-owned stores and franchises in 2026. Let’s keep it simple.

What Is a Franchise Store?

A franchise store is owned by you( the investor)

You own the business, but utilize the brand name, infrastructure, and resources provided by the franchise.

You are responsible for:

• Daily operations
• Employing workers and paying wages
• rent-local expenses
• Local marketing
• Profit or Loss

You pay:

• One-time franchise fee
• Continued royalty payments
• Marketing or brand fees

You Control:

• Employment and staff administration
• How well the store is being operated at the local level
• Cost control and efficiency
• How much profit will you finally make

Example (India):

A Domino's Pizza store in your city 

The brand is owned by Domino’s

 It is an independently owned and operated franchise by a local franchise partner

If sales grow, you earn more

If sales drop, you bear the loss

This is why franchise ownership opportunities attract active investors who want control and higher upside.

Franchise Market Overview (India)

What Is a Company-Owned Store?

A company-owned store is also owned by the brand 

Individual investors do not run the store

The firm oversees:

• Capital Investment
• Store operations
• Employees and Salaries
• Pricing and Planning for the Long-Term 

Profit and loss:

• All profits go to the company
• Any losses are retained by the company

Investor Access:

• You can never purchase one store directly
• Exposure is via shares or investment in corporations

Example (India):

A Reliance Smart or Zudio Store

• The store is owned and operated entirely by the company. 
• Decisions are taken at the corporate level 
• They profit only if the firm does well overall. 

This model suits large corporations and passive investors, not most people looking at startup franchise opportunities in 2026.

Company-Owned Store Market (Organized Retail in India)

Income Streams for Franchise Stores in India

If you are a franchise owner in India, you derive revenue from three sources of income:

Monthly operating profit

• Restaurants, schools, gyms, and service franchises might be included in this category

Example:

• ₹1 Crore Sales
• 15% Net Margin
• ₹15 lakh per year profit

Multi-unit expansion

• Many investors come in through one store and expand to between 2–5 units
• Multiple owners will earn more than others by spreading fixed costs.
• This is normal in start-up franchise opportunities and franchise business opportunities in the year 2026

Resale/exit value

• A profitable franchise can be sold at 2–4× annual profit
• Strong brands and good locations get better resale value
• This turns your business into a real asset, not just monthly income

Income Streams for Company-Owned Stores in India

In company-owned stores, the company earns the money, not individual store investors.

As an investor, your sources of income include:

Dividend

• The bigger retail companies share the profit with the stockholders.
• They depend on corporate performance, not a single store.
• Dividend payments depend on the company

Share Price Growth

• If the company grows, the value of its shares will rise
• Returns are usually long-term, not monthly cash flow

Capital gains on exit

• You earn when you sell shares at a higher price than you bought them

Initial Investment Comparison: Capital, Costs ; Payback Period

Franchise Stores (India)

• Capital Investment: ₹2 lakh - ₹3 crore+, depending on the brand and industry.
• Paid by: You
• Break-even: 1 - 3 years for Small/Mid
• Current expenses: royalties of 5-10%
• ROI: The profit margins of 10 to 30%
• A small food cart may require 12 months to become self-sufficient, whereas a large quick-service restaurant may require 2-3 years.

Company-Owned Stores (India)

• Capital Requirement: Very High 
• Paid by: Company
• Breakeven: N/A - for individual investors
• Return: Through dividends and stock price growth, not store profits
• Example: Reliance Retail stores earn profits at the corporate level; investors benefit only via company performance.

Profitability & Margins

Franchise Stores

• Your profit derives from your store performance
• The gross margins may appear high, but the royalties and fees will bring down your take-home
• Cost control – rent, employee costs, supplies – directly affects your profit increase
• High sales don’t always mean high profit if costs are high
• Example: A Domino’s franchise in India often earns 10%–15% net margin

Company-Owned Stores

• This means  profits accrue to the company rather than shareholders
• Margins are fairly stable but need immense capital outlay.
• Investors make money through dividends and stock price appreciation, not through monthly earnings from the stores.
• Example: Reliance Retail stores are profitable, but you benefit only as a shareholder

Risk Analysis

Risks in Franchise Ownership

• Wrong location – An attractive brand alone may not be able to save the business if the store is not situated in a highly trafficked place.
• Brand reputation issues –  one store's problem can impact others because of the brand reputation. 
• Franchisor changes policies: The royalty rates, fees, or the parameters regarding marketing could change, which would impact your profit.
• Operational Risk is your problem – People, inventory, and all other day-to-day decisions have become your responsibilities.
• High Staff Turnover – It takes time and money to train new staff.
• Local regulations and permits – Changes in government rules can delay your business.
• Supply chain hiccups –  late delivery or a shortage of merchandise could harm your business.

Bottom line: You assume the risks in a store, but the brands are not your concern.

Risks in Company-Owned Expansion

• Corporate Debt - If the company takes on a lot of debt, this can also impact profits.
• Market slowdowns:  Economic downturns can impact the bottom line due to decreased sales. 
• Shareholder Losses – Stockholders would also suffer due to the loss.
• Less responsive to local matters - Large corporations may not be responsive at the individual store level.
• Operational inefficiency – Centralized decisions can create delays or higher costs.
• Reliance on management – Your returns depend entirely on corporate leadership

The Impact of Control and Convenience on Your Life as an Investor

Franchise Stores

• Partial Freedom: You own the store, but you operate the business according to the dictates imposed by the franchise company.
• Must follow systems – The branding processes, operations, and marketing are directed by the firm.
• Active Involvement Required: You personally have to be involved with managing employees, managing stock
• Active involvement needed – You manage staff, inventory, and day-to-day operations.

 Bottom line: Franchises give you control and potential profit, but require time and effort.

Company-Owned Stores

• No operational stress – The company can handle everything.
• Fully Passive - You earn through dividends or a stock price increase.
• Limited control – Individual investors cannot control the store.
• Depends on corporate strategy – Your returns rely on company performance.

Scalability and the Creation of Wealth for Investors

Franchise Structure

• Start small – Many people start off investing in one location.
• Scaling with multiple units – Once you've established your first store, you can then open more.
• Lower risk as experience increases – Every additional unit gets simpler to control.
• Income compounds – Profits from more than one store will add up quicker.
• Asset value increases – The multi-unit owner can sell his assets at an increased value.

Such is the approach many investors take in building genuine wealth through start-up franchises in 2026 and franchise ownership opportunities.

Company-Owned Model

• Expansion is funded by the company – Not by individual investors.
• Growth is shared among many shareholders – Your portion stays small.
• Investor dilution – New shares or funding rounds reduce individual impact.
• Slower wealth creation for individuals – Returns depend on long-term stock growth.
• No direct control over scaling – You can’t decide when or where stores open.

This model works better for large institutions, not individuals looking to actively grow wealth.

Scalability & Wealth Creation: Franchise vs Company-Owned

Comparison Table: Franchise vs Company-Owned Stores 

ROI Calculator Example

Example Scenario

This simple logic helps you compare returns clearly.

Examples in the Real World: What Successful Brands Have Taught Us

Franchise-Heavy Brands 

These are the brands that expand quickly through franchises and illustrate how franchises may grow in the market:

Domino’s India

• Has transcended approximately 2,300+ stores in India as of late 2025.
• Keeps on adding 80+ stores in the last few quarters and covering 500+ cities.
• The operator, Jubilant FoodWorks, has been seeing profits grow along with aggressive expansion plans with increasingly higher LFLs.

KFC & Pizza Hut (Through Devyani International)

• Before the large merger, Devyani was running more than 2,000 outlets of KFC & Pizza Hut in India.
• After acquisition by Sapphire Foods, the total number of outlets for the merged entity in India and abroad is 3,000+, forming a large franchise entity.

DTDC (Courier Franchise)

One of India’s largest logistics franchise networks, rapidly expanding into smaller towns and cities (though not always in official company reports, it is widely cited as a top franchise player).

 Company-Owned Dominant Brands (India)

These brands expand mainly through corporate-controlled outlets and are not typical franchise opportunities:

• Reliance Retail
  • One of India’s biggest company-owned retail networks with thousands of stores across categories — from fashion to electronics to grocery.
  • Investors participate via shares on the stock market, not direct store ownership.
• Trent Ltd (Zudio, Westside)
  • Operates 1,100+ stores across India (Zudio & Westside) as part of corporate expansion.
  • The company continues to grow revenue and add stores, showing how company-owned growth can still deliver returns for investors indirectly.

Due Diligence Checklist: Secure Your Investment Capital Before Investing

Franchise Due Diligence

☐ Unit-level profitability

• Obtain actual profit figures from current franchisees
• Validate at least 2–3 operating outlets

☐ Franchise Disclosure Document (FDD) red flags

• look for high royalty rates or royalty charges
• Check renewal terms and penalties

☐ Territory protection

• Verify if your region is exclusive
• Request how close another outlet can open

☐ Training, Mentoring, and Education assistance

• Quality of the initial training
• On-ground and Marketing Support post-product launch.pages

☐ Franchisee exit history

•  How many franchisees have closed in the past 3 years?
• What took them away?

☐ Exit and resale rules

• Can you sell your outlet freely?
• Does the franchisor control buyer approval or pricing? 

☐ Cost flexibility

• Are suppliers fixed or optional?
• Can you control staffing and local costs?

☐ Brand health

• Check online reviews and recent news
• One bad brand issue affects all outlets

Company-Owned Investment Checklist

☐ Company financial health

• Revenue growth and profit trend
• Debt levels & cash flow

☐ Expansion strategy

• How many new stores is the company opening?
• What kind of growth is profitable?

☐ Management quality

• Leadership track record
• Past handling of slowdowns

☐ Shareholder returns

• Dividend history
• Stock price performance

☐ Market risk exposure

• Sensitivity to economic downturns
• Competition pressure

☐ Investor dilution risk

• New share issues or fundraising plans

☐ Exit liquidity

• How easy is it to sell shares when needed?

Which Model Pays Investors More?

No “winning” model is best for all people. The best plan depends on your investment goals and desire to be involved.

Best for Active Investors

• Franchise Stores
• You run the company on your own.
• You control costs, staff, and local execution
• Improved operations translate to improved profits

Best for Passive Investors

• Company-owned stores through stocks
• Profits are generated through dividends and stock price appreciation
• Performance is dependent on overall corporate results

Best for Risk-Averse Directors

• Established and trusted franchise brands
• Established demand and operating systems
• A lower risk of execution relative to new and unproven models.

Suitable for Growth-Oriented Investors

• Multi-unit franchising
• Ability to scale by opening multiple outlets
• Profits compound over time
• Creates assets with resale value

Final Word

• There is no hype answer.
•  Only the right fit for your capital, time, and risk appetite.

Conclusion: 

Franchising and company-operated stores are definitely not enemies. They are just different routes to wealth. If you are looking for control, cash flow, and the opportunity to build something you can sell, franchising is the way to go. This is why investing in franchising opportunities remains popular in India.

Perhaps if you want convenience, patience, and long-term growth without daily involvement, company-owned stores via stocks would be more suitable for you.

The mistake that investors make is that, before choosing a brand, they do not know what the business model is. Profitable names do not always mean profits. Numbers mean profits.So, before you invest in new franchise business opportunities or business opportunities for 2026, research the business model first, align it with your goals.

Because smart investing is not about following others.

It’s up to you to decide what is best for you.

Frequently Asked Questions (FAQs)

1. What is the difference between a franchise business in India and an company-owned store in India?

A franchise store is owned and controlled by you, the investor. A company-owned store is owned and maintained by the company itself. Store-level profits are realized by you in franchising. Returns are realized by you in a company-owned business through shares or dividends.

1. Which model is better suited for new investors?

For most first-time investors, the most accessible path is through franchising. This requires less capital, provides operating assistance, and enables you to manage the income of the business.

1. Profitability of franchise business opportunities in India in 2026

Yes, that is true. There still exist many profitable franchises for entrepreneurs in India, especially those that belong to the food, retail, logistics, or service sectors. 4. Is individual investment in company-owned retail outlets possible? No. One cannot own the company-owned store by themselves. Investing has to be done through stocks or other investment products.

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.