Top Food Franchise Business Ideas to Invest in India
By Shifa Qaiyum
India has one of the biggest consumer markets in the world due to its immense population. This has made the country a hot spot for big food producers from other nations to open their joints and provided various food franchise opportunities in India.
In recent years food franchises have become prominent in India due to their high demand. Research shows that the food franchise business is expected to touch USD 100 billion by 2024 as it is increasing by 30-35% every year.
What are the top food franchise opportunities in India?
The food sector in India provides a variety of foods to different ranges of customers. Young people are interested in fast food franchises like McDonald’s or Pizza hut while tourists and older citizens want to indulge in street food which can be provided by Chaat Adda, a traditional Indian street food chain.
The top food franchises in India are
- Burger King- It is a burger fast food restaurant chain. They offer a variety of burgers including vegetarian options for Indian customers. The initial investment required to open a burger king franchise is around ₹2 crore.
- Wow! Momo- It is a chain of restaurants specialising in dumplings, momos, and Tibetan and Nepalese cuisine. They even offer variations in momos which includes fried momos, tandoori momos, baked momo, steamed, and even momo burgers. The initial investment required to open a Wow! Momo franchise is ₹8-20 lakhs.
- Domino’s Pizza- This is an international pizza chain that also offers home delivery options. Domino’s Pizza has a huge fan base among both youngsters and elders. The initial investment required to open the franchise is ₹85 lakhs.
- Dunkin’ Donuts- Dunkin’ donuts is not only famous for its donuts, but also for its burgers and coffee. The initial investment required for the franchise is ₹ 22 lakhs.
- Travelkhana- This is the first and only India-wise booking system connecting restaurants on the rail networks to train travellers. The initial investment required for the franchise is ₹10 to 50k.
What are the different types of food franchises in India?
Five different types of food franchises in India are
- Single-Unit Franchise- This is the most common franchise idea. This allows the franchisee to operate in one single location and you will be appointed as the manager and primary operator as well.
For example, Moti Mahal is a big brand for authentic food. You purchase its franchise and open its restaurant at a single spot.
- Multi-unit Franchise- In this type of franchise, the franchisee can buy more than one franchise from the customer and set it up in more than one location. The franchise initiates the ownership and obligation of these units to maintain and grow.
For example. McDonald’s, Subway, etc.
- Company-owned franchise- The franchisor sets up the franchise with his investment and has full authority over the business. They even appoint their representative to run the unit who will represent the brand. The company is responsible for marketing, quality control and product development.
For example, Taco bell, Cafe Coffee day, Bikanerwala, etc.
- Master franchise- The franchisee is given full responsibility and control of the franchising activities of a particular unit by the franchisor. This type is known as a master franchise.
For example, KFC, Pizza Hut, etc.
- Joint venture franchise- In this type of franchise, an international brand ties with a local organization and creates a new entity that acts as a master franchise. The local establishment has a deeper knowledge of the market, consumers, and country laws and then the master franchise takes up the responsibility of running the business in the local country. The target audience of the international brand recognizes the brand quickly through this method.
For example Everstone Capital for Indian Markets and Burger King.
What are the benefits of starting a food franchise?
The five benefits of a food franchise are
- A manageable set-up- It is comparatively easy to set up a food franchise. The franchisee has to pay the start-up cost to the franchisor in addition to an annual licensing fee.
The franchisee acquires the franchisor’s brand recognition, food preparation processes, trademarks, and also a loyal customer base. The franchisor also helps with the logo, design and decor of the outlet, training of the staff, and the uniforms.
- Increase in demand for food restaurants- Demand for different cuisines has increased due to exposure to various food trends in the last few years. Customer expenditure is said to increase by 30% by 2030 and most of the expenditure is spent on the food sector. The food industry will further boom in the coming years due to the increase in the economy.
- Easy access to cost-effective labour- India has easier access to skilled, proficient, and cost-effective labour. Having a manpower of approximately 500 million people, it is not difficult to find labour that is well-suited for different roles available in the food franchise sector.
- Immediate brand recognition- The most difficult task when you open a restaurant is to attract customers, build recognition, and market the brand. This is a crucial risk that a food franchise eradicates. A franchise unit gets the advantage of having a loyal customer base of the established brand, along with the marketing support of the brand which helps them get a much-needed boost to the set-up.
- Easy to innovate- The food industry can never cease to exist because people will always demand a variety of delicious food. You do not need a piece of new equipment or staff to create an entirely new menu and that makes innovation inexpensive, unlike other industries. In addition, being a part of the franchisor network, the franchisee doesn’t have to worry about the creative costs experienced by their products.
What are the top food franchises under 15 lakhs?
The top three food franchises under 15 lakhs are
- Lassi n Cafe- Lassi n Cafe offers healthy, delicious, and authentically made fresh lassi and mocktails to their customers. The brand is growing successfully with its Quick service restaurant model.
Initial investment: INR 12-15 lakhs
Area required: 250 to 300 sq. ft.
- Just bake- It is the largest cake house in India with more than 250 stores across the country. They are known for their signature flavours and amazing-looking cakes. They have also been awarded the best cake house in India and are known for their quality, consistency, and customer maintenance.
Initial investment: INR 10-15 lakhs
Area required: 250 to 500 sq. ft.
- Yewale Amruttulya- It is a tea joint well known for its hygiene and cleanliness. They even provide standardised quality tea in all their branches by using a special tea powder that they make themselves. They have around 350 outlets across India.
Initial investment: INR 10-15 lakhs
Area required: 200-500 sq. ft.
What are the best food franchises under 10 lakhs?
The top 3 food franchises to invest in under 10 lakhs are
- Rolls and bowls- These restaurants are known for their hygienic and quick service. They are known for their variety of rolls like Dilli chola rolls, vada pav rolls, and tikka rolls. They are also famous for their rice bowls.
Initial investment: INR 3-5 lakhs
Area required: 150 to 200 sq. ft.
- Magic Momos- It is a quick-service restaurant serving hot and delicious food. The concept is based on a centralised kitchen model to control the quality and hassle-free store model.
Initial investment: INR 5–10 lakhs
Area required: 200 to 300 sq. ft.
- Dosa Crush- The restaurant is known for its delicious authentic and fusion South Indian dosas. They also have Continental, Chinese, and fast-food cuisines.
Initial investment: INR 5-10 lakhs
Area required: 500 to 750 sq. ft.
Frequently Asked Questions
What are the sub-sectors of the food industry?
Ans. The food industry is divided into seven sub-sectors:
- Cafes and parlours
- Food trucks
- Restaurants and nightclubs
- Bakeries and confectionaries
- Catering and Food ordering franchises
- Fast food
What is the process of starting a food franchise in India?
Ans. These 5 important steps are required to start a food franchise business:
- First, you need to complete all the documents provided by the provider.
- After completing the documents, create a legal entity so that no problem arises in the future.
- You need to attain a license to run the franchise so fill out the licensing form.
- Human resource Management is very important to run a business. You need a professional to succeed and furthermore employ professionals who are required for certain jobs in the company.
- In the last and final stage, you must inquire about the taxes that need to be paid in the future. This can help you to save some taxes.
What is the best food franchise in India?
Ans. The top two food franchises in India are
- KFC- The amount of Kfc lovers in India is high therefore it is a good idea to invest in its franchise. The customer base among Indian consumers has increased after KFC introduced various vegetarian options. The investment required for a KFC franchise is ₹50 lakhs to ₹1 crore but you get fast returns.
- Domino’s- It is one of the most loved pizza franchises in India with its delivery service. The initial investment required for the franchise is ₹30-50 lakhs and you get great profit margins immediately.
The food industry in India has a large number of consumers and thus the franchise business in this sector is blooming. If you want to invest in a business that has lucrative returns in the long run then starting a food franchise is a very good idea.
Written By: Divisha Pandey
Written By: Shruti Agrawal
Written By: Resham Daswani
Written By: Yukta Palekar
Angel Broking is a leading brokerage house...