Chai Sutta Bar Franchise Cost & Investment Guide (2025)

Chai Sutta Bar Franchise Cost & Investment Guide

The Indian public affection for tea exists beyond cultural tradition to have a substantial economic impact. The value of the Indian tea industry reached INR 1.00 trillion in 2024 according to market research which predicts growth to INR 1.47 trillion by 2029 at a 6.98% compound annual growth rate (CAGR) over the 2025-2030 period.

The worldwide market has selected India as its second largest production sector and this sector is now being led by the increase of organized tea cafe businesses due to rising town populations and higher income capabilities of the metropolis population who want contemporary and relaxing gathering areas. USD 104 million (approximately INR 890 Crores) currently represents the value of the tea cafe segment which continues to grow rapidly through its appeal towards Gen Z and millennial consumers.

The thriving tea cafe market has led Chai Sutta Bar (CSB) to establish itself as a leading player. CSB started operations in 2016 and achieved remarkable growth to become the quickest expanding chain and franchise across India. The brand successfully opened more than 600+ outlets, which now operate across 370+ Indian cities, the UAE, and Oman. The complete assessment of Chai Sutta Bar franchise costs includes an elaborate analysis of investment structures and an investigation of franchise operations while examining expenditure determinants.

What is Chai Sutta Bar?

In 2016 Anubhav Dubey and Anand Nayak founded Chai Sutta Bar to deliver decently priced quality tea to customers in welcoming spaces. The unique concept earned rapid acceptance among the youth segment because it presented flavored chai tea in eco-friendly kulhads along with a casual setting.

Chai Sutta Bar bases its fundamental approach on “Desh Ki Mitti Ka Swaad” which means serving drinks made from local materials and following traditional preparation techniques. The core message attracts plenty of people because it generates both authentic and genuine sentiments. The brand has achieved exceptional expansion as hundreds of outlets have spread across India and the company now operates in international markets. The wide-reaching accessibility and famous brand status act as strong advantages for potential franchise owners.

Why Choose a Chai Sutta Bar Franchise?

Deciding to go for the franchise model particularly where it is Chai Sutta Bar’s brand creates number of benefits over starting a separate venture:

Well-Renowned Brand: It has an outstanding brand presence and a dedicated customer following. This saves the initial effort of creating brand awareness from the beginning.
Established Business System: Profitable business model with operational standards, marketing techniques and know-how in purchasing.
Lower Risk: Franchising is a lower risk compared to starting an independent business, the model having been already proven successful.
Training and Support: This brand gives franchisees complete training and also supports them batch by batch so that people who are ready to invest can make the full potential by managing the business with the best manner.
Marketing and Advertising Support: Franchisees are able to utilize national and regional marketing programs executed by the franchisor which decreases individual franchise owner marketing effort.
Bulk purchasing Power: The franchisor may have achieved more favorable rates with suppliers through bulk purchases, leading to lower Chai Sutta Bar franchise cost for franchisees.
Access to Knowledge: Franchisees have the ability to tap into expert knowledge and proficiency of the franchiser in the food and beverage industry.

Understanding the Franchise Model of Chai Sutta Bar

Chai Sutta Bar utilizes its franchise operation through the Franchise Owned Franchise Operated (FOFO) structure. The franchisee uses their funds to create and run the storefront under the franchisor’s supervision which includes brand identity and business launch instructions and business operation assistance. The official website shows that this FOFO franchising arrangement matches the most common franchising arrangement.

The information mainly emphasizes FOFO but the Company-Owned Company Operated (COCO) model deserves brief mention to improve comprehension of ownership patterns. Operations of outlets under the COCO model rest fully with the franchisor company that also maintains ownership of business properties. The company selects this model structure for strategic business locations and necessary control of operations as well as customer experience. Anyone who wants to operate and own ownership of a Chai Sutta Bar outlet needs to consider the FOFO model structure.

Chai Sutta Bar Franchise Cost Breakdown:

The Chai Sutta Bar franchise cost consists of different distinct sections. Each element plays a vital role for potential franchisees to develop effective financial plans.

The Franchise Owned Franchise Operated (FOFO) model represents it’s main franchise program as described in earlier sections of this text. The franchise owner must cover every part of their outlet operation after making all necessary financial investments.

Total Investment Breakdown:

A total investment of 20 to 30 lakh rupees will be necessary for establishing and opening the Chai Sutta Bar outlet franchise. The following details explain all Chai Sutta Bar Franchise costs:

Franchise Fee: It is a one-time payment to the brand for the permission to use the franchisee’s brand name, an operating system and business model. As per the official website, the franchise fee is 6 to 12 lakhs. The actual Chai Sutta Bar Franchise cost can be even different depending on what place and particular terms of the franchise deal. This fee effectively allows the franchisee the permission to operate under it’s business entity.

Outlet Interiors and Furniture: A maximum portion of the money is utilized in giving the ambiance and the functionality of the outlet. This includes:

Interior Design and Construction: Charges for designing the layout, selection of colors and the execution of interior works which abide by the brand brand identity.

Furniture and Fixtures: Buying tables, chairs, counters, display units and other required furniture and fixings. The exact requirements would be dependent on the size and style of the outlet.

Kitchen Equipment: Purchase critical kitchen equipment such as tea brewing machines, refrigerator, stove, and all the other kitchen appliances needed in preparing and serving the menu items.

Lighting and Electrical Fittings: Expenditure to fit up suitable lighting fittings and electrical wiring to the creation of a wide, pleasant, and functional are involved.

Chai Sutta Bar franchise cost for outlet interiors and furnishings can diverge widely depending on the area size of the outlet, the grade of materials used, and the particular design specifications. It will probably lie between the figure of 8 to 12 lakh rupees.

First Raw Material Investment: This constitutes the Chai Sutta Bar franchise cost of opening stock of raw material needed to begin the operations. This would primarily include:

- Tea Leaves and Ingredients: Various types of tea leaves, for sugar, for milk, spices and other components, according to the kind of chai.
- Snacks and Food Items: First cycle of any snacks or food item being sold off the menu.

Packaging: Kulhads, cups, napkins & all other type Packaging materials.

Initial raw material investment is said to be around rupees 2-3 lakh that the business will have to buy again based on sales volume.

Signage & Licenses: This segment is made up of the costs involved in merchandising the outlet and obtaining all the required legal permanent residence to be in the business:

- Exterior Signage: Designing & placement of Chai Sutta Bar signages of the outlet’s.
- Interior Branding Elements: Displaying the brand logo, posters, and other branding materials within the outlet.
- Business Licenses and Permit: Acquiring the required licenses and permits by the local government to start a food and beverage business. This can be shop and establishment licenses, food safety licenses (like FSSAI) and any necessary permit.

Signage and license of the person is estimated in the range of 1 to 2 lakh rupees.

Business Development Fees: As it is universal that the consumer base is quite location specific and will require certain marketing strategies that are applied in the specific region only, franchisees may be required to bear the cost of local marketing and promotional activities to attract customers to specific outlets. This could include:

- Launch Campaigns : Launch Campaigns in location for the new store to create awareness in the initial phase.
- Promotional Materials: Printing flyers, brochures, and other promotional materials.
- Local Advertising : Spending on Neighborhood Advertising Sources Like Newspapers, Social Media Or Affairs.

Firstly budget to the tune of 1 to 2 lakh rupees for marketing and advertising one should set aside.

Working Capital: Closing amount necessary to satisfy the daily operational expenditure of a company in the first few months until it earns sufficient amount. This includes:

- Rent & Utilities: Rental of the premises and utilities like electricity, water and internet.
- Staff Salaries: Salaries for the first couple of employees.

Raw Material Purchasing: Continuing expenses of buying raw materials.

Other Operational Expenses: Expenses of a miscellaneous nature, examples include, cleaning supplies, maintenance and POS system costs. Adequate working capital is vital for the survival and good management of the business, more so especially in the beginning. An approximate 2 to 4 lakh rupees can go in the working capital.

Factors Influencing the Franchise Cost

Though the company’s website is offering a rough estimate for franchise cost and the total investment, there are several factors that affect the final franchise cost and investment needed:

Location: The place where the outlet is situated has a great impact in determining the total expenditure. Areas with heavy foot traffic, like the business district, malls and universities might require more rental fees and also may have a higher franchise fee.
Size and Format of the Outlet: The size of the outlet along with particular format (e.g., small kiosk versus bigger café with seating) will determine the costs of the interiors, furniture along with kitchen equipment.
Local Market Indicators: Labor costs, raw material prices and more local market conditions will have an impact on the entire investment.
Specific Franchise Agreement Provisions: The franchiser can also impact the supervisory fee and other associated costs through the particular phrases and conditions of the franchise agreement.

Franchisor Support:

Chai Sutta Bar generally gives full support to its franchisees in installing and managing their business. This support may include:

Site Selection Assistance: Consultation to select a right area for the outlet.
Outlet Design and Layout Support: Developing standardized outlet layouts and counsel in setting up the interiors.
Training Program: Full enrollment in training for all franchisee and staff members including product production, customer service, and inventory management.
Marketing and Advertising Assistance: Developing Materials, Marketing Material, Vehicle Wrap and Support on Nation and Regional Marketing Campaigns, Guidance on Marketing on a Local Level.
Operational Manuals and Policies: Supply fully written and detailed manuals and policies on all aspects of running the business.
Supply Chain Support: Help in procurement of raw materials as well as other inputs.
Ongoing Operational Support: Ongoing communication, coaching and support to overcome any operational issues.

The level and type of support that franchisors offer can be quite different, so it is essential for potential franchisees to get specific about the support provided by Chai Sutta Bar.

How to Take Franchise of Chai Sutta Bar - The Application Process

The process of getting involved with a this franchise usually is as follows:

Inquiry For First Time: Provide your interest to acquire franchise through the official website of Chai Sutta Bar etc.
Application Process: Fill out the franchise application form, contain information about your personal, financial situation and proposed location.
Initial Review: Your application will be reviewed and a preliminary evaluation of your application to ensure that you fit the job requirements by the brand.
Interview and Discussion: If your application makes the cut, you will be asked to attend a face to face meeting and discussion with the franchise team where you will be able to gain further understanding about the opportunity and to give them the chance to assess you as a candidate.
Due Diligence: Use your own due diligence which may comprise a visit to an existing Chai Sutta Bar outlet, look at the franchise agreement and consult a professional.
Franchise Agreement Signing: If both sides are happy, you will sign a franchise agreement.
Outlet Setup: You then begin the setup of your outlet by the assistance of the brand. This includes selection of location, outlet layout or design and procurement of equipment and materials.
Training: You and your team will get the training required by Chai Sutta Bar.
Outlets or Station Opening: Finally, you shall launch your outlet of the Chai Sutta Bar and start business operations.

Eligibility Process:

Though particular eligibility may vary, usually, Chai Sutta Bar seeks franchisees who have the following traits:

Passion for the Brand and Business: A love in the Brand and Business of Chai Sutta Bar, a real willingness to keep the business running.
Entrepreneurial Mindset: An entrepreneurial and proactive nature with the ability to lead, manage the business successfully.
Openness to Remain Outcome-driven: The willingness to maintain the brand benchmark to the extent of services, product and also outlet design.

Agreement Terms:

The franchise agreement is a contract that binds together Chai Sutta Bar and the franchisee stipulating the terms & conditions of the franchise relationship. Key points usually being included in the document are:

Grant of Franchise: An authority to open a franchise under Chai Sutta Bar marks as director of the specific location.
Term of Agreement: The length of franchise agreement, usually is for a certain number of years.
Franchise Fee: Initial Fee, Continuing Fee, franchise fee , Annual, Royalty Fees.
Operational Procedures: Procedures and standards for the operation of the outlet encompassing product preparation, service standards and hygiene practice.
Marketing and Advertising Obligations: Prerequisites for both the franchisor and the franchisee on marketing and advertising distributors.
Training and Support: Description of the training and ongoing support given by the franchisor.

It is very important for prospects considering a franchise to thoroughly review and understand all the terms & conditions of the franchise agreement before signing any franchise agreement. Getting experienced legal advice about the contract would be highly advisable.

Documents Required:

Although the exact documents might differ, there are a few documents you might be asked for during the application process like:

Application Form: Filled up and signed franchise application form.
Identity Proof: Passport, Aadhar card, or other valid government-issued identity documents.
A Proof of Address: Utility bills, bank statements or any other documents that confirm your residence.
Financial Statement: Bank statements, Income tax returns, and other financial documents to show your own financial capability.
Business Plan (Optional): A detailed business description of your plan for conducting the franchise.
Photographs: Passport-size photographs.
Other Documents: Any further documents as may be required by Chai Sutta Bar.

Infrastructure and Staffing Requirements:

The infrastructure and manpower requirement for Chai Sutta Bar outlet would be moulded around the size and format of outlet. Generally, you will need:

Commercial Space: A suitable commercial space in a high-footfall area. The sizes may differ according to the chosen format
Service Counter: a counter for orders, orders taking and customers delivery.
Seating Area (Optional): If you are selling western products it is totally possible you will need to accommodate seating area because of customers.
Storage Area: Areas to store raw material and supplies.
Staff: You will have to appoint staff to operate the day-to-day running of the business including tea makers, servers and possibly a manager. Staff numbers will be determined by size and volume of outlet.

Profitability and Return on Investment (ROI)

Chai Sutta Bar profit is reliant on a few elements, which for instance depends on the territory, the performance of contract holders, customer foot traffic, operational efficiency, and management. Although, it’s hard to give specific numbers without exact financial projections, the brand’s popularity and the fact that it’s very affordable, it’s credible that they have a high profit potential.

Factors which are likely to impact the ROI are

Sales Volume: The customer base and the typical transaction size.
Operating Expenses: Effective control of expenses that include rent, utilities, materials, personnel salary and wages.
Royalty Fees: Any ongoing royalty fees payable to the franchisor will affect the profitability.
Marketing and Promotion: Good marketing programs to attract and retain the customer.

The potential franchisees should do thorough market research and their detailed financial forecast to estimate how profitable and the ROI is for their particular location. This aspect should be clearly discussed with the Chai Sutta Bar franchise team.

Conclusion

The established and well-recognized Chai Sutta Bar franchise provides entrepreneurs with an attractive business prospect to join the expanding Indian food market. The establishment of this franchise requires an official payment between 6 to 12 lakh rupees while the total investment ranges from 20 to 30 lakh rupees. Potential investors need to comprehend the specific Chai Sutta Bar Franchise cost distribution and elements which will affect their overall financial commitment.

The franchise fee becomes an essential component when potential owners make financial projections through their evaluation of setup costs and raw material expenses alongside marketing costs and required working capital. A person looking to establish a successful franchise operation must thoroughly understand the eligibility procedures along with agreement provisions and franchisor assistance and franchisee duties.

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FAQs

What is the total investment required for a Chai Sutta Bar franchise?

Starting a Chai Sutta Bar franchise costs a lot of money. The total investment needed is between 20 to 30 lakh rupees.

What is the franchise fee?

The franchise fee is an important part of the total cost. It ranges from 6 to 12 lakh rupees according to the official website.

Is there any royalty fee involved in the Chai Sutta Bar franchise?

There is also a royalty fee for franchisees. This is a fee that you pay regularly based on your sales.

What kind of support does Chai Sutta Bar provide?

Chai Sutta Bar offers a lot of help to its franchisees. They assist with choosing the location, designing the outlet and training programs.