Written By: Khushboo Verma

So you want to open a food franchise. The first thing you need to know is the food and beverage franchise cost India is not fixed. A tea kiosk can start at ₹5 lakh. A premium dine-in brand can cross ₹3 crore. Your budget decides your format. Your format decides everything after that.

India's food sector has seen real structural change. Branded chains have moved beyond metros. Delivery has made online ordering a daily habit. Consumers pick familiar brand names over unknown local options. Buying into a proven brand makes more commercial sense than testing an untested concept right now.

If you also want to understand food and beverage franchise investment India in full, the business models behind it, the risks involved, and what kind of returns to plan for, we have written about that in detail elsewhere. This piece covers one thing only: the money you need and where it goes.

India's Food Franchise Market in 2026: Key Numbers You Should Know

India's foodservice market is valued at USD 85-114 billion and projected to grow at 10-11% CAGR through 2031 (Mordor Intelligence, 2026). The organized QSR segment alone is estimated at USD 30.37 billion in 2026, growing at 9.25% CAGR. Rising incomes, rapid urbanization, delivery-first habits, and a young population driving routine branded dining are the main growth factors.

A franchise gives you a ready system, supply chain, and brand name from day one. Even so, the food and beverage franchise cost India is not the same across formats. Brand value, outlet type, and city tier all move the number. Get the cost picture right before you pick a brand.

F&B Franchise Cost in India: Three Investment Ranges

Range 1: Entry-Level Kiosks and Beverage Models (₹5-₹12 Lakhs)

Most run on 100-300 sq ft with a lean setup and no full kitchen requirement. Brands like Chai Point (kiosk model: ₹6-9 lakh) and Amul Ice Cream (₹5-10 lakh) sit in this range.

Typical Cost Breakdown:

Best suited for: First-time investors, college zones, railway stations, residential clusters, and high-footfall Tier II locations.

ROI Timeline: 6-14 months in strong locations. Each outlet does not generate massive revenue individually, so the business runs on volume. Where you place it decides whether it works.

Range 2: Mid-Range QSR and Fast Casual Formats (₹15-₹40 Lakhs)

Investor activity in India's franchise market is most concentrated here. Burger chains, momo brands, bakery outlets, ice cream parlors, and compact dine-in setups all sit in this band. Brands like Wow! Momo (kiosk model: ~₹20-25 lakh), La Pino'z Pizza (₹30-40 lakh), and Subway (total setup: ~₹25-35 lakh, royalty 8% of gross sales) operate here.

Typical Cost Breakdown:

Space: 300-800 sq ft | Revenue Potential: ₹5-15 lakh per month depending on brand and city

Most investors reviewing the food and beverage franchise cost India end up here. The numbers are workable, the brand systems are tried and tested, and the format has real growth potential.

Range 3: Premium Casual Dining and Large Format Brands (₹75 Lakhs-₹3 Crore+)

Well-known cafe chains, full-service dining brands, and premium QSR names with strong national presence fall here. Brands like Haldiram's (QSR model: ₹30 lakh-₹1 crore, dine-in up to ₹4 crore), Chaayos (₹50-75 lakh), and Burger King (₹800 sq ft minimum, royalty ~4-6% of sales) operate in this range.

Typical Cost Breakdown:

Space: 1,000-2,500 sq ft. A bad location will hurt you badly at this level. So will hands-off management. The revenue ceiling is high, but a slow first year with this kind of investment is genuinely painful.

Breaking Down the Food and Beverage Franchise Cost India: Where Does the Money Go?

Franchise Fee: Upfront brand licensing charge. Ranges from ₹2 lakh to ₹30 lakh based on brand equity and territory rights. Non-refundable in most cases.

Interior and Fit-Out: Franchisors follow strict design manuals. You cannot reduce this cost, as it directly affects footfall and brand perception.

Kitchen Equipment: Commercial ovens, freezers, exhaust systems, and POS setup can account for 20-35% of total investment.

Initial Inventory: Raw materials and packaging purchased upfront. Can exceed ₹10 lakh for premium formats.

Licenses (Mandatory for All Formats): FSSAI license, GST registration, Trade license, Fire NOC, Shop and Establishment registration.

Royalty Fees: Franchisors typically deduct 4-8% from your monthly gross revenue as a brand usage fee. A handful of newer brands have dropped royalty to attract investors, but among recognized names this is not a common practice.

Working Capital: Rent, salaries, and utility bills do not pause while your outlet finds its footing. Set aside enough to run the business for 3-6 months without depending on sales revenue. First-time investors consistently skip this, and it is the leading cause of early cash flow problems.

Kiosk vs. Dine-In: Which Format Works for You?

Kiosk or dine-in? It sounds simple but this decision shapes your entire investment, staffing, and revenue structure. Here is a side by side look:

Do not assume a kiosk is the low-risk option by default. Poor footfall will kill a kiosk faster than a dine-in. A sit-down format takes longer to stabilize but builds repeat customers over time.

Segment Comparison at a Glance (2026)

These figures reflect general market trends. Your actual breakeven depends on location, operator involvement, and local competition.

Hidden Costs Investors Frequently Miss

When calculating the food and beverage franchise cost India, many investors focus on the headline figure and ignore what comes after setup. In reality, these costs are just as significant and can quietly erode monthly profitability:

• Security deposits: Most landlords in commercial zones ask for 3-6 months of rent upfront
• Electricity load deposit: Required for commercial power connections
• Aggregator commissions: Zomato and Swiggy charge 16-30% per order (Business Standard, 2025). For delivery-heavy outlets, this significantly compresses net margins
• Marketing contribution: Typically 2-5% of revenue for national brand campaigns
• Packaging: For mid-volume delivery outlets, packaging costs can add up to ₹500-1,500 per day

Not building these into your projections will make the business look more profitable on paper than it actually is.

Profit Margins Across Segments

Higher investment does not automatically mean higher margins. In fact, operational efficiency matters more than the format itself.

BossWallah data shows most Indian food franchises deliver 15-25% yearly ROI post-stabilization, with break-even in 2-3 years for mid to premium formats.

Metro, Tier II or Tier III: How City Type Shapes Your Franchise Budget. Here's How

Metro Cities (Mumbai, Delhi, Bengaluru, Hyderabad) Rent runs ₹150-400 per sq ft per month in prime zones. Higher costs but stronger delivery volume and order values. Stabilization takes 12-18 months.

Tier II Cities (Jaipur, Indore, Nagpur, Coimbatore) Rental costs 20-30% lower than metros. Rising F&B demand. Faster ROI in value-driven formats.

Tier III Cities and Smaller Towns Lower competition and overhead, but slower ticket size. Best for kiosks and affordable QSR.

Getting this right is a key part of any food and beverage franchise investment India decision worth making.

Financing Options Available in 2026

Banks and NBFCs actively fund recognized food franchise brands. Main options:

• Mudra Loans (PMMY): For kiosk and entry-level investments up to ₹10 lakh under Shishu and Kishor categories
• MSME Term Loans: Cover mid-range QSR investments with collateral-backed structures
• Bank Term Loans: For premium format investments when the franchisor has structured financial disclosures
• NBFCs: Faster processing for smaller amounts at marginally higher interest rates

Eligibility improves when the franchisor is a recognized brand with documented franchisee profitability data.

5 Questions to Answer Before You Sign a Food Franchise Agreement

1. What is my total available capital, including 6 months of working capital buffer?
2. Can I manage daily operations personally, or do I need to hire a manager from day one?
3. Is my target location high-footfall or still developing?
4. Am I comfortable with a 2-3 year timeline before consistent profit in mid to premium formats?
5. Have I accounted for royalty, aggregator commissions, and packaging in my monthly cost projections?

Answer these honestly and they will point you to the right food and beverage franchise cost India range. Most franchise failures in India trace back to poor capital planning, not poor brand choice.

Frequently Asked Questions

1. Which food franchise is cheapest to start in India? Tea and beverage kiosks are the lowest entry point, starting from ₹5 lakh. Amul and Chai Point are reliable options in this range. Newer brands like ZORKO start at ₹4.25 lakh, though they carry less brand recognition.

2. Is a food franchise profitable in India? Yes, when the right format is matched to the right location. QSR franchises typically deliver 15-25% annual ROI after stabilization (BossWallah, 2025). Net margins after rent and salaries generally range from 10-25% depending on format and city.

3. How much working capital is needed beyond setup costs? Set aside 3-6 months of operating expenses covering rent, salaries, utilities, inventory, and packaging. Running short on working capital is the most common reason new franchise outlets struggle.

4. Can I get a loan to fund a food franchise? Yes. Mudra loans cover entry-level investments up to ₹10 lakh. MSME and bank term loans are available for mid to premium formats. Eligibility is stronger when the franchisor provides structured financial documentation.

Final Thoughts

The food and beverage franchise cost India runs from ₹5 lakh for a kiosk to over ₹3 crore for a large-format brand. The number matters, but how you allocate it across setup, operations, and working capital matters more.

To understand the full picture on food and beverage franchise investment India, including business models, risks, and returns, read our detailed guide on this before finalizing any decision.

Plan the money first. Sign the agreement second.

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.