Food franchise business in India

In recent years, the food franchise business in India has witnessed remarkable growth, driven by changing consumer preferences, urbanization, and increasing disposable incomes. Entrepreneurs looking to venture into the food business are often drawn to the franchise model due to its proven success, established brand recognition, and comprehensive support systems offered by franchisors. Starting a fast food franchise can be tiresome and lengthy. In this comprehensive guide, we outline the step-by-step process to help you embark on your journey to becoming a successful food franchise owner.

What is Food Franchising?

Food franchising is a business model in which a franchisor grants a license to a franchisee to operate a restaurant or food-related business using the franchisor’s brand name, trademarks, products, and business methods. In exchange for the license, the franchisee typically pays an initial franchise fee and ongoing royalties to the franchisor.

Advantages of Food Franchise Business

• Established Brand Recognition: Established brand reputation and customer loyalty associated with the brand help attract customers easily and drives sales.

• Proven Business Model: Franchisors provide franchisees with a comprehensive business model, including operational procedures, marketing strategies, and training programs, that have been tested and proven successful in other locations.

• Training and Support: Franchisors offer training and support to franchisees by supporting them in initial training, marketing assistance, operational support and access to resources and suppliers.

• Higher success rate: Franchisees benefit from reduced risk compared to starting an independent business since they are operating under a proven brand with established systems and support from the franchisor.

• Economies of scale: Franchisors can leverage economies of scale to negotiate favourable pricing for ingredients, equipment and supplies which can help lower costs for franchisees and improve profitability.

Process of starting food franchise business in India

• Market Research: Before diving into the world of food franchising, conduct thorough market research to identify popular food trends, target demographics, competition and geographical location. Once you have a clear understanding of the market dynamics explore different food franchise option aligning with your interests, expertise and financial capacity.

• Franchise Exploration and Due Diligence: Once you have narrowed down your options, research on each franchisors background, reputation, track record and financial stability. Evaluate and contact the franchisor directly to inquire about franchise opportunities and request franchise disclosure documents, which provide detailed information about the franchise system and its requirements.

• Legal and Financial Considerations: Review the franchise agreement carefully, paying attention to terms related to franchise fees, royalties, territorial rights, renewal options and termination clauses and understand the financial commitments associated with franchising.

• Location selection and Investment planning: Choose a strategic location for your franchise outlet that ensures maximum visibility, accessibility and foot traffic. Determine the total investment required to start and operate your food franchise business, including franchise fees, equipment, inventory, leasehold improvements, and working capital and Develop a comprehensive business plan outlining your financial projections, revenue goals, and expenses.

• Setup and Launch: Franchisors typically provide extensive training and ongoing support to franchisees to help them succeed Once you’ve completed the necessary training and obtained all required approvals, it’s time to set up and launch your franchise outlet. Follow the franchisor’s guidelines and specifications for store design, layout, equipment installation, and signage. Hire and train staff members to deliver high-quality service and maintain brand standards. Execute marketing and promotional activities to generate awareness and attract customers to your new franchise location.

• Operations and Management: Oversee daily operations to ensure the smooth functioning of your franchise outlet.

• Compliance and Quality Assurance: Ensure compliance with all legal and regulatory requirements related to food safety, hygiene, labor, and taxation. Implement quality control measures to uphold the brand’s standards and ensure consistency in product quality and service delivery.
• Expansion and Growth: Once your franchise business is established and profitable, consider opportunities for expansion and diversification. Explore options such as opening additional outlets, expanding into new territories, or introducing new products and services to capitalize on market demand and maximize returns on your investment.

However, the restaurant franchise cost in India depends upon various factors like brand reputation, initial investment and royalties etc. Mostly people get attracted to low cost food franchises as they require minimum investment and less royalties but others are often attracted to open restaurant franchise, buffet franchises and food stall franchise.

Below are some of the cheapest fast food franchise business in India.

• Kia Café

Franchise cost: Rs 2,00,000

Investment required: Rs 10,000 to Rs 50,000.

• What a Sandwich

Franchise cost: Rs 50,000

Investment required: Rs 50000 – 2,00,000

• Peet’s Coffee

Franchise cost: Rs 50,000

Investment required: Rs 10,000 – 50,000

• Joshi Wadewale

Investment required: Rs 10,000 – 50,000

• Bewafa Momos

Franchise cost: Rs 50000

Investment required: Rs 50000 – 2,00,000

Best Fast Food Franchise in India 

• McDonald’s

Investment required: 1.5 to 10 crore

Profit margin: 12 lakh monthly

• The Amul Ice Cream Corporation

Investment required: 6 to 10 lakh

Profit margin: 5 lakh monthly

• Kentucky Fried Chicken (KFC)

Investment required: 50 lakh to 3 crore

Profit margin: 3 to 4 lakh monthly

• Burger King

Investment required: 3 to 10 crore

Profit margin: 3 to 4 lakh monthly

• Haldiram’s

Investment required: 1 to 4 crore

Profit margin: 2 to 5 lakh monthly

Buffet Franchise in India

In the recent times, buffet franchises have become very popular.  They become ingrained in their communities and benefit from local loyalty and recognition and provide an easy exit strategy. Some of the famous buffet franchise in India are:

• Pirates of Grill

Investment required: 2.5 to 3 crore

Royalties: 7 percent monthly

• The Barbeque Company

Investment required: 1.5 to 1.75 crore

Royalties: 7 percent monthly

In summary, starting a fast food franchise business can require a lot of market research while considering the financial assistance and profits. Therefore, we need to be strictly aware of the latest tax implications and others compliances required for setting up a fast food franchise. Stay updated with more such information on Legal Window, in case of any queries feel free to reach us at admin@legalwindow.in.