Written By: Bandana Gupta

India’s retail sector is a booming powerhouse, and at its core, franchising serves as a key driver of this growth. For aspiring entrepreneurs and seasoned investors alike, the franchise model offers a potent combination of brand recognition and a proven operational playbook. When we look ahead to 2025, we can see that shopping is changing very quickly. The conversation is no longer just about fast-food chains; it’s about everything from massive hypermarkets to bespoke beauty services.

So, what are the retail franchising trends in India for 2025? From the blockbuster return of global giants like Carrefour to the steady, glamorous expansion of Lakme Salons, a new chapter of franchise business opportunities for 2025 is being written. 

A Strong Growth Prospect for the Retail Franchising Sector in India in the Year 2025

The retail franchising landscape in India is poised for robust growth in 2025, driven by rising disposable incomes, increasing urbanisation, and the rapid expansion of e-commerce. The industry is expected to reach ₹1.35 lakh crore (US$17.7 billion) by 2025, growing at an annual rate of 13.2%. Franchising remains an attractive option for entrepreneurs due to reduced risk and the benefits of established brand recognition.

Key Trends Shaping Retail Franchising

Several key trends are influencing the retail franchising sector:

1. Fashion and Lifestyle Boom: Rising incomes and urban growth are fueling demand for fashion and lifestyle franchises, particularly in Tier 1 and 2 cities.

2. E-commerce Integration: Online retail platforms like Myntra, Flipkart, and Amazon are bringing global fashion to Indian consumers, and franchises are integrating e-commerce into their business models.

3. Technology Adoption: Franchises are leveraging technology for online ordering, loyalty programs, and data-driven marketing to enhance customer engagement.

4. Customer Experience Focus: Exceptional customer service has become increasingly crucial for differentiating oneself in a competitive market.

5. Tier 2 and 3 City Expansion: Franchises are expanding beyond major metropolitan areas to capitalise on growth opportunities in smaller cities.

6. Low-Investment Franchises: Low-cost, home-based models are gaining traction in areas like digital education and consultancy.

7. Hybrid Models: Franchises are adopting hybrid models that combine online and offline channels to cater to diverse customer preferences.

8. B2B and B2C Integration: Businesses are moving towards offering seamless experiences for both B2B and B2C customers.

9. Simplified Credit Access: Government support for MSMEs through simplified credit access is expected to boost franchising.

Best Franchise Businesses in India

Some of the top franchise businesses in India include:

1. Carrefour India Franchise—A globally recognised big-box retail brand offering large-format store opportunities.

2. Lakme Salon Franchise: A beauty and wellness franchise with a strong brand presence.

3. QSR Franchises: Food and beverage franchises like KFC, McDonald's, and Subway.

Carrefour’s Entry—Big-Box Retail Returns via Franchise Model

For years, big-box retail franchises in India seemed like a puzzle with missing pieces. International players faced regulatory hurdles and struggled with the capital-intensive nature of setting up massive stores.However, 2025 marks a strategic shift.

The Lulu Group-backed Galaxy, an NRI-owned Delhi enterprise, will start the Carrefour India franchise, signalling a big trend: global companies are using the franchise model to de-risk their entry and develop quickly.Instead of bearing the entire cost of real estate and operations, Carrefour can partner with local investors who possess deep market knowledge and capital.

For an investor, this is a high-stakes, high-reward opportunity. It requires significant capital, but it offers the chance to operate a globally recognized hypermarket brand, benefiting from its immense purchasing power, sophisticated supply chain, and established brand equity. 

Beauty and Wellness Surge—Lakmé Salons at the Forefront

The beauty and wellness sector in India is witnessing remarkable growth, and Lakmé Salons are at the forefront of this surge. Fueled by rising disposable incomes, increasing focus on personal grooming, and the rapid expansion into Tier II and III cities, the industry is projected to reach USD 256.9 billion by 2033. With its trusted brand legacy, innovative service offerings, and a widespread network of salons and training academies, Lakmé Salon is strategically positioned to leverage this upward momentum.

What’s Driving the Boom—and Lakmé’s Leadership Role

1. Rising Disposable Income As more consumers attain higher income levels, spending on beauty and grooming services has become a routine part of their lifestyle.

2. Heightened Grooming Awareness Personal grooming and appearance have become key priorities for both men and women, leading to a significant rise in demand for professional salon services.

3. Expansion Beyond Metros With growing urbanization and evolving preferences, salons are expanding aggressively into Tier II and III cities, unlocking untapped markets.

4. Self-Care as a Lifestyle A cultural shift toward self-care has led more consumers to seek wellness and beauty treatments, not just for occasions but as part of everyday well-being.

Lakmé Salon’s ability to stay ahead through continuous innovation, strong branding, and market adaptability makes it a top choice for both franchisees and beauty-conscious consumers alike in 2025 and beyond.

Food and Beverage Franchises Still Dominating—But With New Contenders

The Food and Beverage (F&B) sector continues to dominate as the leading force in Indian franchising. While legacy brands continue to grow, the market is fragmenting with exciting new contenders.

Investors are now looking beyond traditional fast food towards:

• Specialty Coffee Chains: Brands like Third Wave Coffee Roasters and Blue Tokai are expanding via franchise, catering to the discerning urban consumer.

• Healthy Food & Juice Bars: The demand for nutritious, on-the-go options is creating opportunities for health-focused QSRs.

• Regional Cuisine Brands: Chains specializing in authentic regional Indian food are gaining national traction.

• Dessert Parlours & Bakeries: Niche brands offering high-quality ice creams, pastries, and baked goods are a sweet spot for investors.

Comparing Retail Franchise Models: Big vs. Small Format at a Glance

Initial Investment

• Space, stock, and tech are multi-crore investments in big-box stores like Carrefour.  

• Small Format (e.g., Lakmé, QSRs): Moderate to low—starts from a few lakhs to ₹1 crore.

Operational Complexity

• Big-Box: High—large teams, sophisticated stock, and large-scale coordination.

• Small Format: Moderate—easier to manage with streamlined operations and a smaller team.

Real Estate Needs

• Big-Box: Huge footprint (10,000+ sq. ft.), usually in suburban zones or city outskirts.  

• Small Format: Compact space (300–2,000 sq. ft.), thrives in high-footfall urban locations.

Revenue Potential

• Big-Box: Very high turnover due to product volume, despite thin margins.  

• Small Format: Moderate to high—especially profitable in service-led or niche categories.

Break-Even Timeline

• Big-Box: Long—can take years to recoup the investment.  

• Small Format: Short—typically 1–3 years due to lower costs and faster ROI.

Ideal Investor Profile

• Big-Box: Best suited for HNIs, corporations, or investment groups.  

• Small Format: Accessible to individual investors, first-timers, and multi-unit operators.

Scalability

• Big-Box: Scaling is slow; every new outlet requires extensive planning and significant investment

• Small Format: Fast to scale—easy to replicate once the first outlet succeeds.

Key Factors Driving Investor Interest in Retail Franchising

Proven Business Model

• Lower Risk: Franchising reduces startup risks thanks to an established business blueprint as well as operational systems.

• Structured Systems: Franchisees benefit from ready-made processes for marketing, operations, and customer service.

• Performance Insight: Reviewing existing franchise data helps assess profitability and long-term viability.  

Brand Recognition & Reputation

• Built-In Trust: Well-known brands attract customers faster and foster immediate credibility.

• Accelerated Growth: Strong brand presence can lead to quicker customer acquisition and better supplier or investor relationships.

• Competitive Edge: A recognized brand simplifies market entry and boosts visibility.  

Training & Support

• Comprehensive Onboarding: Franchisors provide training across all business functions, from day-to-day operations to service excellence.

• Continued Assistance: Ongoing guidance, marketing help, as well as centralized resources ensure smoother operations.  

Financial Considerations

• Startup Costs: Includes franchise fees, setup expenses, and also working capital.

• Recurring Expenses: Plan for royalties, advertising contributions, as well as operational costs.

• Return on Investment: Evaluate potential profits, cash flow, as well as resale value for a clear financial picture.  

Market Demand & Location

• Local Demand: Assess consumer needs, competition, as well as demographic trends in the target area.

• Strategic Location: Success often depends on high-visibility, high-traffic locations.  

Operational Efficiency

• Streamlined Operations: Franchises follow standardized procedures for consistent service as well as efficiency.

• Customer Focus: Delivering quality experiences drives loyalty and repeat business.  

Adaptability & Innovation

• Local Relevance: Adapting to regional preferences while maintaining brand standards enhances local appeal.

• Innovation-Driven: Embracing technology as well as evolving market trends helps maintain a competitive position.

How to Invest in Retail Franchises

Retail franchise investments involve strategy as well as study. Here are some steps to follow:

1. Research Franchise Opportunities: Identify franchise opportunities that align with your goals as well as risk appetite.

2. Analyse franchisors' reputation, support, and business model.

3. Calculate Investment Requirements: Determine the investment required, including franchise fees, infrastructure costs, and working capital.

4. Secure Funding: Arrange funding through loans, savings, or investors.

5. Launch and Operate: Launch the franchise and operate it according to the franchisor's guidelines.

In conclusion, 

the retail franchising landscape in India is expected to witness significant growth in 2025. Moreover, driven by increasing consumer spending, tier 2 city growth, and global brands entering the market. Investors can choose from a range of franchise opportunities, including big-box retail, beauty and wellness, and food and beverage franchises. By carefully evaluating franchise opportunities and following a structured investment process, investors can tap into the growing demand for retail services in India.

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.