- Pay a Franchise Fee – One-time cost to use the brand’s name and system.
- Set Up Outlet – Invest in space, interiors, equipment, and licenses as per brand guidelines.
- Share Profits – Pay monthly royalties (usually 4%–10% of sales) or a flat fee.
- Get Training & Support – Franchisor provides staff training, marketing, and supply chain access.
- Run the Business – You manage daily operations while following the brand’s proven model.
Starting a business is exciting, but it can also be risky and overwhelming. That’s why more and more entrepreneurs in India are turning to the franchise model — a proven business method that combines brand power with entrepreneurial drive. Whether you dream of running a café, a retail store, or a fitness chain, the franchise system gives you a structured path to success.
What is a Franchise Model?
A franchise model is a business partnership between:
- Franchisor: The original business/brand (e.g., Domino’s, Lakmé Salon).
- Franchisee: An independent entrepreneur who buys the right to operate under the franchisor’s brand.
In simple terms, it’s like renting a successful business formula instead of starting from scratch.
How Does the Franchise Model Work in India?
The franchise model in India runs on a clear system where both franchisor (brand owner) and franchisee (you, the investor) share responsibilities:
- Initial Franchise Fee – A one-time payment for using the brand’s name, logo, and systems. This can range from ₹1–5 lakhs for small franchises to ₹50 lakhs+ for big brands.
- Setup Costs – Covering space, interiors, equipment, and licenses. Franchisors often give you a design plan so all outlets look uniform.
- Royalty Payments – A share of your monthly sales (usually 4%–10%) paid to the franchisor. Some smaller Indian franchises offer a zero-royalty model.
- Training & Support – Franchisors train you and your staff, help with marketing, and give access to their supply chain and operations manual.
Example: Domino’s India requires ₹25–50 lakh investment + royalties. In return, they provide full setup guidance, branding, ingredient supply, and nationwide marketing support.
Types of Franchise Models in India
Different franchise formats suit different industries.
| Franchise Type | How It Works | Examples in India |
| Product Franchise | Sell branded products | Tanishq, Raymond |
| Business Format Franchise | Operate under a complete business system | Domino’s, KFC |
| Manufacturing Franchise | Franchisee manufactures under the brand license | Coca-Cola bottlers |
| Job Franchise | Small-scale, home-based | Courier services, cleaning |
| Investment Franchise | Big-ticket, high-capital | Hotel chains like Taj Vivanta |
Benefits of the Franchise Model
- Proven Success Rate – You operate under a tested business formula.
- Brand Recognition – Customers already trust the brand.
- Training & Support – Ongoing guidance from the franchisor.
- Faster ROI – Many franchises break even in 12–24 months.
- Lower Risk – Compared to starting a new business.
Challenges of the Franchise Model
- High Initial Investment – Popular brands may need ₹20 lakh–₹1 crore+.
- Limited Freedom – Franchisees must follow franchisor rules.
- Royalty Burden – Regular fees can affect profits.
- Market Saturation – Too many outlets reduce earnings.
Franchise Model vs Traditional Business
| Factor | Franchise Model | Traditional Business |
| Brand Value | Pre-established | Build from scratch |
| Training | Provided by franchisor | Self-learning |
| Risk | Lower | Higher |
| Investment | Higher upfront | Flexible |
| Control | Restricted | Full independence |
Examples of Successful Franchise Models in India
- Food & Beverage – Domino’s, Subway, Chaat Adda
- Retail – Reliance Digital, Bata
- Education – Kidzee, NIIT
- Beauty & Wellness – Lakmé Salon, Naturals
- Fitness – Gold’s Gym, Cult. fit
Key Takeaways
- Franchise Model = Lower Risk – It lets entrepreneurs run a proven business under an established brand, reducing startup risks.
- Investment Varies Widely – Entry-level franchises start at ₹2–5 lakhs, while premium brands can cross ₹1 crore+.
- Ongoing Royalties Apply – Most franchises charge 4%–10% of sales as royalty, though some local models offer zero royalty.
- Support is a Big Advantage – Training, marketing, and supply chain support from franchisors help franchisees succeed faster.
- Booming Industry in India – The franchise sector is growing at 30–35% annually, making 2025 a great time to explore opportunities.
Conclusion
The franchise model in India is booming in 2025, offering entrepreneurs a way to reduce risks while leveraging established brands. From food to retail to education, franchises are creating wealth and jobs across the country. While investment and rules can be challenging, the rewards often outweigh the risks if you choose wisely.
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FAQs
It’s a business method where you run a brand’s outlet using their name, products, and systems, in return for fees or royalties.
Franchises start as low as ₹2–5 lakhs (small businesses) and can go up to ₹1 crore+ for premium brands.
Food & Beverage, Education, and Retail are the top-performing sectors.
No. Most franchisors provide complete training and ongoing support to help franchisees succeed.
On average, franchises in India break even in 12–24 months, depending on brand and location.
