- Break-even Time – Own Restaurant – 2–3 years | Franchise – 1–2 years
- Investment Needed – Own Restaurant – ₹10–50 lakh | Franchise – ₹30 lakh–₹1.2 crore
- Profit Margin – Own Restaurant – 10–15% | Franchise – 12–25%
- Risk Factor – Own Restaurant – Higher failure rate | Franchise – Lower risk with brand support
- Growth Potential – Own Restaurant – Limited to local scale | Franchise – Multi-city/national expansion
In 2025, India’s food and restaurant industry is valued at over ₹5.5 lakh crore, growing steadily at 9–10% annually. Entrepreneurs today face a key question:
👉 Should I start my own restaurant, or invest in a restaurant franchise?
Both models have advantages and challenges. This article compares the two with industry stats and concludes with a real case study: Own Restaurant vs Domino’s Franchise in India.
Industry Overview (2025)
| Feature / Metric | Own Restaurant | Restaurant Franchise |
|---|---|---|
| Outlets in India | ~50,000 independent eateries | 600+ organized brands |
| Startup Cost | ₹10–50 lakh | ₹30–80 lakh (non-traditional) to ₹1.2 crore (traditional) |
| Break-even Time | 2–3 years | 1–2 years |
| Profit Margin | 10–15% | 12–25% |
| Brand Value | Build from scratch | Established brand trust |
| Marketing | Self-funded & self-managed | Centralised, reliable |
| Supply Chain | Independent sourcing | Centralized, reliable |
| Risk Level | High (trial & error) | Moderate (tested model) |
Key Comparison: Own Restaurant vs Franchise
1. Investment
- Own Restaurant: Flexible, can start small with ₹10–15 lakh, but the risk of failure is higher.
- Franchise: Requires higher investment (₹30 lakh+), but comes with brand recognition.
| Expense Type | Common Restaurant | Restaurant Franchise |
|---|---|---|
| Setup Cost | ₹10–50 lakh | ₹5–50 lakh (brand-dependent) |
| Royalty Fee | N/A | 5–10% of monthly revenue |
| Marketing Fee | Self-managed | 2–5% of revenue (franchisor managed) |
| Staff Training | In-house | Provided by franchisor |
Insight: Franchises require upfront fees and ongoing royalties but reduce operational risks due to proven processes.
2. Marketing
- Own Restaurant: Owners must spend on promotions, discounts, and digital ads.
- Franchise: Brand-level marketing and an established customer base reduce costs.
3. Operations
- Own Restaurant: Owners manage menu, hiring, suppliers, and compliance independently.
- Franchise: Franchisor provides training, vendor tie-ups, and operational guidelines.
4. Revenue & Profit
- Own Restaurant: Average revenue ₹3–10 lakh/month; profit margin 10–15%.
- Franchise: Average revenue ₹5–15 lakh/month; profit margin 12–25%.
| Metric | Own Restaurant | Restaurant Franchise |
|---|---|---|
| Average Monthly Revenue | ₹3–10 lakh | ₹5–15 lakh |
| Profit Margin | 10–15% | 15–25% |
| Customer Base | Local | Brand-loyal & repeat customers |
| Expansion Potential | Slow | Faster (multi-outlet) |
5. Risk
- Own Restaurant: High failure rate is significant due to a lack of brand recall.
- Franchise: Lower — established systems reduce uncertainties.
| Risk | Own Restaurant | Restaurant Franchise |
|---|---|---|
| Business Failure | Higher due to competition & branding | Lower due to established brand & SOPs |
| Market Acceptance | Trial and error | Tested model & market validation |
| Regulatory Compliance | Fully owner responsibility | Franchisor support available |
| Customer Loyalty | Limited | Full owner responsibility |
Case Study: Own Restaurant vs Domino’s Franchise
Scenario A: Common Restaurant (Independent)
- Investment: ₹20 lakh
- Monthly Revenue: ₹5 lakh
- Profit Margin: 12% (₹60,000 per month)
- Break-even: 30–36 months
- Challenges: Customer acquisition, marketing, supply chain disruptions, and strong local competition
Scenario B: Domino’s Pizza Franchise (2025 Data)
- Investment: ₹50–80 lakh (non-traditional outlet) to ₹1.2 crore (full-service outlet)
- Monthly Revenue: ₹10–15 lakh
- Profit Margin: 12–15% (₹1.2–2.2 lakh per month)
- Break-even: 18–24 months
- Strengths: Strong brand recall, app-based ordering, centralised supply chain, national marketing campaigns
- Expansion Rate: Domino’s opened 52 new outlets in early 2025, reaching over 2,000 stores nationwide
📌 Case Study Takeaway
- Domino’s franchise requires higher investment but delivers faster ROI, consistent demand, and lower risk.
- Own restaurants allow creative freedom and lower entry costs, but profitability depends heavily on location, branding, and the owner’s skills.
Conclusion
The choice between your own restaurant vs a restaurant franchise depends on your budget, risk appetite, and business goals:
- Choose Own Restaurant if you want full creative control, lower initial investment, and are ready to build your brand from scratch.
- Choose a Restaurant Franchise if you prefer faster returns, operational support, and proven brand power.
In India’s 2025 food industry, franchises like Domino’s, Subway, and McDonald’s show how strong brand recognition can speed up success, making franchises the safer bet for most first-time entrepreneurs.
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FAQs
➡️ A franchise (like Domino’s) generally offers higher profitability and faster break-even due to strong brand recognition and centralised support. Independent restaurants may take longer, but they provide full creative freedom.
➡️ Depending on the brand, a franchise can cost anywhere between ₹30 lakh to ₹1.2 crore. Popular QSR brands like Domino’s or KFC usually require higher investment than small regional franchises.
➡️ Yes. Industry data shows independent restaurants have a failure rate of nearly 60% within the first 3 years, while franchise outlets have significantly lower failure rates due to tested models.
➡️ No, menu options are usually standardised across all franchise outlets. This ensures consistency but limits innovation. Independent restaurants allow complete creative control.
➡️ Franchises allow faster multi-city growth, backed by brand and franchisor support. Independent restaurants can expand, too, but require significant capital, marketing effort, and time.
