Coffee Shop Franchise India: Cost, Requirements & How to Apply (2025)

Opening a Coffee shop franchise in India has become one of the hottest business ideas for young entrepreneurs in 2025. With India’s coffee market growing at 8.9% CAGR (2024–2029) (Statista), franchise brands like Café Coffee Day, Starbucks, and Third Wave Coffee Roasters are making big profits. The best part? You don’t need to start from scratch—you can partner with a reputable franchise brand, use their name, and run your own profitable café.

How much does it cost to start a coffee shop franchise in India in 2025?

The original investment needed for a coffee shop franchise in India varies substantially based on brand reputation, location, and store format. Understanding these costs helps you make informed decisions before entering this growing market.

1. Franchise fee explained

The franchise fee lets you use a brand’s name and business model. Here’s what you should know:

1. Basic franchise fees typically range from ₹2 lakhs to ₹5 lakhs for brands like Kumbakonam Degree Coffee
2. Mid-range brands such as Barista charge approximately ₹5 to ₹7.5 lakhs as franchise fees
3. Premium international brands may charge between ₹30 to ₹50 lakhs for their franchise rights

This one-time payment gives you access to the brand’s operational framework, recipes, and business systems. The contract period typically spans 5-9 years with renewal options.

2. Set up cost breakdown (rent, interiors, equipment)

The physical store setup becomes your next major expense after securing franchise rights:

Rent and Location: Monthly rent varies based on location:

• Metro cities: ₹1.5 lakhs to ₹2 lakhs with 3-6 months security deposit
• Tier-2/3 cities: ₹50,000 to ₹1 lakh with 2-3 months security deposit
• High-traffic areas: ₹50,000 to ₹2 lakhs depending on visibility

Interior Design & Renovation: The right ambience plays a vital role:

• Basic renovations: ₹5 lakhs to ₹15 lakhs
• Premium interiors: ₹5 lakhs to ₹25 lakhs for furniture, lighting, and decor
• High-end boutique experience: Upwards of ₹40 lakhs

Equipment: Essential coffee-making machinery:

• Espresso machines, grinders, refrigeration: ₹3 lakhs to ₹20 lakhs
• Basic equipment setup: ₹2 lakhs to ₹5 lakhs

Initial Inventory: Coffee beans, milk, syrups, and snacks cost between ₹1 lakh to ₹5 lakhs

3. Licensing and legal costs

Your coffee shop needs these legal requirements:

• FSSAI License: Mandatory for all food businesses, costs approximately ₹7,500
• GST Registration: Required if annual turnover exceeds ₹40 lakhs; registration is free, but compliance costs ₹10,000-₹15,000 annually
• Trade License: Local municipal bodies issue this for ₹5,000 to ₹50,000
• Fire Safety Clearance: Costs between ₹5,000 to ₹20,00,0 depending on the state

The total licensing costs range from ₹10,000 to ₹50,000 based on your location.

4. Recurring monthly expenses

Your business needs these monthly expenses to keep running:

• Staff Salaries: Baristas and support staff earn ₹15,000 to ₹30,000 per employee monthly, while supervisors or chefs can earn ₹35,000 to ₹50,000
• Utilities: Electricity, water, and maintenance costs range from ₹10,000 to ₹30,000 monthly
• Inventory Restocking: Regular replenishment costs approximately ₹50,000 to ₹1 lakh monthly
• Marketing: Promotional activities require ₹10,000 to ₹50,000 monthly
• Royalty Fees: Many franchisors charge 5-8% of monthly revenue, though some like Kumbakonam Degree Coffee, charge 0%

What are the legal and regulatory requirements for a coffee franchise?

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Starting a coffee shop franchise in India requires you to understand the regulatory requirements. Your café must follow specific legal guidelines to operate legally. Here’s what you need to know about licenses and compliance requirements.

1. FSSAI license

The Food Safety and Standards Authority of India (FSSAI) license is something every food business needs, including coffee shops. This will give a guarantee that your beverages and food items meet safety and hygiene standards:

1. Determine license type based on annual turnover:
   • Basic Registration: For turnover below ₹12 lakhs
   • State License: For turnover between ₹12 lakhs and ₹20 crores
   • Central License: For turnover exceeding ₹20 crores
2. Gather required documents:
   • Business’s address proof (electricity bill/rent agreement)
   • Business owner’s identity proof
   • Business premises’ photographs
   • Business registration certificates
3. Apply online through the FoSCoS portal
   • Fill Form A (basic registration) or Form B (state/central license)
   • Upload documents and pay applicable fees
   • The process usually takes 30-45 days
4. Display your FSSAI number prominently in your café and on packaging

Pro tip: You could face penalties up to ₹5 lakhs and imprisonment up to six months if you operate without an FSSAI license.

2. GST registration

Goods and Services Tax (GST) registration helps you stay tax compliant:

1. Check eligibility: You need to register if your annual turnover exceeds ₹20 lakhs
2. Prepare documentation: PAN card, business registration, and bank account details
3. Submit the application on the GST portal
4. Verify through OTP and receive GSTIN

The current regulations state that franchisees must pay GST at 18% on franchise fees and royalty payments.

3. Trade license from the local authority

This license verifies your right to run a business in a specific location:

1. Contact your municipal corporation or local authority
2. Submit application with required documents:
   • Business identification
   • Premises proof (ownership/rental agreement)
   • FSSAI certification
   • ID proof
3. Pay applicable fees (₹5,000-₹25,000 based on location and business size)
4. Schedule an inspection by municipal officials
5. Receive license (you’ll get it within 15-30 days)

4. Fire and safety compliance

Fire safety certification is a vital part of protecting your customers and staff:

1. Submit an application to your local fire department
2. Provide documentation:
   • Site plan and building model
   • Property safety features analysis
   • Electrical wiring information
3. Schedule an inspection by fire safety officers
4. Implement recommendations for fire safety measures
5. Receive Fire NOC (No Objection Certificate)

Your Fire NOC stays valid for 3 years and needs renewal before it expires.

What is the step-by-step process to apply for a coffee shop franchise?

_{Image Source: Chai Sutta Bar}

You need careful planning and execution to start a coffee shop franchise in India. The process varies slightly between brands, from picking a brand to opening your café.

1. Choose the right franchise brand

Your first big decision is picking the perfect coffee franchise partner:

1. Research available options from well-known brands like Café Coffee Day, Barista, and Kumbakonam Degree Coffee
2. Review brand reputation by visiting current outlets and talking to existing franchisees
3. Check investment needs and see if they match your budget
4. Compare the support systems different franchisors offer, including training, marketing, and operational help
5. Think over the menu variety and products that your target market will love

2. Submit application and documents

After you’ve found potential franchise partners:

1. Reach out to the franchise team through their website or franchise consultants
2. Join discovery meetings or online presentations to really understand the business model
3. Get your documents ready, including proof of finances, business experience, and location details
4. Submit a formal application with your initial interest

3. Review and sign franchise agreement 

Your relationship with the brand is defined by the franchise agreement:

1. Review the contract terms, including franchise duration (usually 5 years minimum)
2. Know the royalty structure and regular fees (typically 5-8% of monthly revenue)
3. Check territorial rights to protect your business area
4. Talk to a legal expert who knows franchise agreements
5. Work out the terms if possible before signing

4. Site selection and approval

Your café’s success depends heavily on finding the right spot:

1. Look for busy areas with great visibility and easy access
2. Send the location proposal to the franchisor
3. Let the brand’s team inspect your chosen site
4. Complete lease paperwork after location approval
5. Plan your store layout based on brand guidelines

5. Setup and launch

Once you’ve signed agreements and secured your location:

1. Finish the complete training the franchisor gives
2. Install equipment and décor following brand standards
3. Build and train your team with the franchisor’s help
4. Get your first stock of coffee beans and supplies
5. Create buzz for your grand opening with brand support

Which are the best coffee shop franchise options in India?

India’s coffee shop market offers excellent franchise opportunities for businesses of all sizes. Here’s a detailed look at the top options to help you begin your business venture.

1. Kumbakonam Degree Coffee

This South Indian filter coffee brand gives you an affordable entry into the coffee business:

• Investment required: Starting from ₹8 lakhs
• Space needed: 70-100 sq. ft.
• Monthly profit potential: ₹40,000 to ₹80,000
• Franchise fee: ₹2-5 lakhs with 0% royalty on sales

Kumbakonam Degree Coffee gives detailed support with training, marketing assistance, and helps build business standards.

2. Cafe Coffee Day

India’s homegrown coffee giant offers:

• Investment range: ₹10-11 lakhs, depending on outlet type
• Space requirement: 1000-1500 sq. ft. with a minimum of 25 feet frontage
• Partnership model: CCD works on a rental or revenue-sharing basis instead of traditional franchising

The brand comes with strong recognition and detailed operational support systems.

3. Barista

Twenty-three-year-old Barista brought café culture to India:

• Investment requirement: ₹30-50 lakhs for standard cafés
• ROI potential: 22-27% with a 2-2.5-year payback period
• Space requirement: 650-850 sq. ft.
• Franchise fee: ₹5-7.5 lakhs

Barista provides detailed support with café design, staff training, and marketing assistance.

4. The Coffee Bean & Tea Leaf

This premium international brand brings:

• Space requirement: 800-2000 sq. ft.
• Investment scope: ₹2-2.5 crore total investment
• Franchise fee: ₹20-35 lakhs
• Growth plans: Targeting 250 stores by 2030

The brand’s coffee production process runs from seed to cup, which ensures quality control and streamlines the supply chain.

5. Third Wave Coffee

This fast-growing speciality coffee chain features:

• Space requirement: 500-1200 sq. ft.
• Investment range: ₹25-50 lakhs
• Profit margin: 15-25% with a 2-3 year break-even period
• Current presence: Over 116 stores across India

Third Wave emphasises ethical sourcing and freshly roasted single-origin coffee.

6. Starbucks (via Tata alliance)

The brand operates through a 50:50 joint venture with Tata Consumer Products:

• Current presence: Over 390 stores across 54 Indian cities
• Expansion plans: Targeting 1,000 stores by 2028
• Employment: Currently employs 4,300 partners (employees)
• Growth rate: Opening one new store every three days

Starbucks delivers premium coffee experiences with strong global brand recognition.

How profitable is a coffee shop franchise in India?

_{Image Source: World Coffee Portal}

Coffee shop franchises in India offer promising returns for entrepreneurs. Here’s a detailed look at what makes these businesses profitable and the returns you can expect.

1. Average revenue per outlet

A typical franchise café brings in ₹7 to ₹15 lakhs monthly. Your revenue depends on where you set up shop, how big your café is, and which brand you choose. Brand loyalty and marketing reach give franchise cafés a 25-30% edge over independent ones.

1. Small cafés usually earn ₹50 lakhs to ₹1 crore yearly
2. Prime spots in metro cities can boost your monthly earnings
3. You can make up to 50% of your money through delivery services and packaged coffee sales

2. Typical profit margins (15%–25%)

These coffee franchises beat other food businesses when it comes to profits:

1. You’ll see 15% to 20% profit margins, while standalone shops get 8% to 12%
2. Drinks give you the best returns (60-70%), and food items follow at 40-50%
3. Your net profits should land between 15-25% after paying royalties and running costs

3. Factors affecting profitability

Your coffee franchise’s success depends on:

1. Location: Shops near offices, colleges, and malls pull in more customers
2. Menu Engineering: Speciality cold brews with 40-50% margins can boost your average sales by 30%
3. Operational Efficiency: Smart inventory management helps cut waste and expenses
4. Rent-to-Revenue Ratio: Your rent needs to match your earnings for good profits
5. Marketing Strategy: Smart local marketing brings customers back

4. Break-even period (2–3 years)

Coffee franchises usually break even in:

1. Most franchises: 2-3 years
2. Coffee By Di Bella: 12-18 months
3. Third Wave Coffee: 18-24 months on average
4. Online delivery has helped many cafés break even faster since the pandemic

Success stories

Success stories from the ground give valuable lessons to aspiring coffee entrepreneurs. Three inspiring Indian coffee franchise examples show different paths to profitability.

1. Café Coffee Day’s Expansion Trip
CCD started with a single outlet in Bangalore in 1996 and became India’s coffee revolution powerhouse. The brand grew to over 2,000 bistros nationwide by 2016 with its memorable slogan, “A big deal can occur over some espresso”. The parent company achieved a remarkable turnaround and recorded a 10% rise in net revenue to ₹1,013 crore for the financial year ending March 2024.

2. Barista Franchise Owner Success
A chartered accountant’s story shows Barista’s franchise success. She left her 25-year career in multinational corporations to follow her passion in hospitality, bringing valuable experience in business strategy and new ideas. Another Barista partner started as a coffee enthusiast in Patna with a small 10-chair café. This partner grew to become a Master Franchisee and now manages multiple successful outlets across Bihar.

3. Madras Coffee House’s Global Expansion
Madras Coffee House stays true to tradition and authenticity. The brand has grown from its Chennai roots to establish more than 150 stores worldwide. Their success comes from their dedication to authentic filter coffee experiences. They combine this with an innovative franchising approach that gives complete training and support to new entrepreneurs.

Conclusion

Starting a coffee shop franchise in India in 2025 is a golden opportunity, thanks to India’s growing café culture and youth-driven demand. Whether you go premium (like Starbucks) or budget-friendly (like BrewBakes), success depends on location, investment, and management skills. If you want a ready-made business with brand support, a franchise is the smarter choice.

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