OYO Franchise: Cost, Process & ROI Guide (2025)

If you’ve ever booked a budget hotel in India, chances are high you’ve stayed at an OYO property. But here’s the fun part — OYO doesn’t own most of those hotels. Instead, it runs on a franchise and partnership model, where local hotel owners tie up with OYO to increase bookings and revenue. Now, the big question is: How much does an OYO franchise cost, what’s the process, and is the ROI worth it in 2025? Let’s break it down in simple terms.

What is the total cost of starting an OYO franchise in 2025?

The cost to start an OYO franchise depends on your property type and location. Here’s a detailed breakdown of the investment you’ll need in 2025.

Initial franchise fee

Standard OYO properties need a franchise fee between ₹2 lakh and ₹5 lakh. This investment gives you:

1. The OYO brand name and recognition
2. Original staff training programs
3. Access to OYO’s booking platform
4. Marketing support

Premium properties like OYO Townhouse demand a much higher franchise fee. You’ll need to invest ₹1 crore to ₹2 crore. This reflects their upscale market positioning.

Set up and renovation costs

Your budget should include:

1. Property renovation that meets OYO standards
2. Furniture and fixtures upgrades
3. Signage and exterior branding
4. Interior décor matching OYO guidelines

Budget hotel properties need ₹10 lakh to ₹30 lakh for setup and renovation. Premium OYO Townhouse properties are a big deal as it means that costs can reach ₹1 crore due to higher standards.

Technology and branding expenses

OYO’s model revolves around technology integration. You’ll need:

1. OYO’s property management system installation
2. Booking engines and channel managers are set up
3. Digital locks and security systems implementation
4. Staff training on OYO’s technology platform

Your initial investment covers these expenses, but you might need upgrades later.

Working capital requirements

Your working capital should cover:

1. The core team’s salaries for 3-6 months
2. Utility bills and maintenance costs
3. Daily operational expenses
4. Marketing and promotional activities

Expert advice suggests keeping 6 months of operating expenses ready. Budget properties take 12-18 months to break even, while Townhouse properties need less than 12 months.

Hidden or ongoing costs to consider

Your long-term profits depend on these ongoing costs:

1. Revenue sharing: OYO takes 10-25% of your room revenue as commission
2. Technology maintenance fees
3. Marketing contributions
4. Periodic renovation requirements
5. Staff training costs

OYO helps franchisees understand these costs through financial counselling during early operations.

What is the step-by-step process to get an OYO franchise?

The path to becoming an OYO franchise partner follows a simple yet detailed process. Here’s a clear breakdown of how you can join the OYO network in India.

1. Submit franchise application

You can reach out to OYO through several channels:

1. Head to the official OYO partner portal at partner.oyorooms.com
2. Fill out the contact form with your name, details, city, and property type (hotel, home, or commercial property)
3. You can also email partner@oyorooms.com or call +91 70530 70530
4. Share details about your property, investment capacity, and location preference

An OYO executive will reach out to discuss your application and see if your property matches the brand’s requirements.

2. Property inspection and approval

OYO will assess your property through these steps:

1. A representative schedules a visit to your location
2. They look at your property’s location, structure, and market potential
3. The team checks if you meet OYO’s basic requirements
4. They review room count, current amenities, and needed renovations
5. Your property’s qualification depends on this assessment

3. Signing the franchise agreement

The partnership becomes official through these steps:

1. OYO presents partnership terms and conditions
2. You submit the required documents, including your address and ID proof
3. The agreement runs for five years with renewal options
4. You’ll find details about revenue sharing, commission, and operational duties

4. Onboarding and training

OYO offers complete support during onboarding:

1. Your staff learns OYO’s hospitality standards and protocols
2. We set up property management and booking platforms
3. The Co-OYO app helps monitor business performance
4. Staff training covers the new app that shows cash flows, customer feedback, and pricing details

5. Launch and go-live support

Your property goes live with these final steps:

1. OYO helps with property setup and branding
2. Your property appears on OYO’s website and mobile app
3. You get continuous support through their Central Response hotline (+91-9310777888)
4. You can access marketing channels with content and design help

How profitable is an OYO franchise?

Want to know what returns you’ll actually get from an OYO franchise investment? The numbers look promising for both standard and premium properties. Let’s get into the financial details.

Expected monthly revenue 

Your monthly revenue as an OYO franchisee depends on several factors:

1. Standard OYO properties bring in ₹2-8 lakhs per month
2. Premium properties like OYO Townhouse can earn much more, reaching ₹20 lakhs monthly
3. Successful OYO properties keep their occupancy rates between 60-80%
4. Your monthly earnings depend heavily on location and property type
5. Hotels that partner with OYO see their revenue grow 1.7-2x after joining the platform

Typical profit margins 

OYO’s commission structure shapes your profit margins:

1. OYO takes 10-25% of the room revenue as commission
2. Standard properties earn annual profit margins of around 15-25%
3. Premium Townhouse properties do better, with margins over 40%
4. OYO’s contribution margins grew from 13% in FY19 to 45% in FY24
5. A budget property that performs well can earn ₹2.5 lakhs monthly profit on ₹5 lakhs revenue

Payback period and breakeven timeline

Recovery time varies by property:

1. Most franchisees break even within 1-2 years
2. Budget properties take 12-18 months to break even
3. Premium Townhouse properties break even in under 12 months
4. OYO offers a 20% return on investment within a year
5. The 5-year franchise agreement gives you enough time to recover costs and earn good profits

Factors that affect profitability

Your franchise’s success depends on:

1. Location and market demand – better spots mean higher room rates
2. Property type and quality – premium properties earn better margins
3. Operational efficiency – smart management of staff and utility costs
4. Marketing effectiveness – using OYO’s platform and other channels
5. Seasonal changes – OYO helps fill rooms even in slow seasons

What support does OYO provide to franchisees?

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OYO does more than just lend its brand name to franchisees. The company’s complete support systems help hotel owners maximise their revenue potential and make operations efficient.

Branding and marketing support

Your property will benefit from OYO’s marketing assistance to boost visibility:

1. Your property gets promoted on OYO’s website, mobile app, and major online channels
2. Strategic collaborations with major travel management companies and corporations
3. Social media promotion with massive reach (Facebook following is a big deal as it means that 270,000)
4. OYO Wizard access, their award-winning loyalty program, drives repeat bookings
5. Local marketing initiatives keep promotion costs low and maximise reach

Technology and booking platform access

The technology backbone gives you:

1. OYO OS access – a complete technology suite that integrates over 40 products
2. A user-friendly property management system manages inventory and bookings
3. Co-OYO app monitors business performance immediately
4. Digital sign-up and onboarding tools like OYO 360 list your property in under 30 minutes
5. Major Online Travel Agencies (OTAs) integration gives wider distribution

Staff training and SOPs

Your team will deliver consistent service through:

1. Operational training programs that cover hospitality standards
2. Quality standards remain consistent with standardised SOPs
3. FICCI partnership brings online certification courses
4. Training modules cover hotel operations, housekeeping, front office, and F&B service
5. Regular audits maintain quality standards

Revenue management and analytics tools

OYO’s revenue optimisation tools are a great way to get better returns:

1. Revenue Health Scorecard – AI-driven tool evaluates 70+ variables to score revenue potential
2. Smart Pricing Manager – room prices adjust instantly within specified ranges
3. Cancellation Prediction Engine – calculates no-show probability to optimise inventory
4. Dynamic pricing tools adjust rates based on demand, season, and location
5. Performance analytics track quality, exposure, pricing, and OTA performance metrics

Who is eligible to become an OYO franchisee?

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OYO’s franchise network has specific qualification requirements. You should know these eligibility criteria before you invest your time and money in this hospitality venture.

Minimum property requirements

Your property specifications will depend on the OYO model you select:

1. Budget OYO properties need at least 12-15 rooms in a 3-4 storey building
2. OYO Townhouse requires a property size between 3,000-5,000 sq ft
3. Standard OYO models work well with properties from 300-3,000 sq ft
4. Your property must be structurally sound and ready for renovation
5. Hotels need fewer changes compared to residential properties

Ideal franchisee profile

OYO looks for these qualities in future franchisees:

1. You must be 21 years or older
2. You need simple business sense, though hospitality experience helps, but isn’t required
3. You should be ready to join the OYO training programs
4. You must maintain OYO’s service standards
5. You should know how to staff the property properly

Location and market criteria

Your location substantially affects franchise success:

1. Properties near tourist spots get preference
2. City locations that attract steady visitor traffic
3. Local hospitality market needs assessment
4. Easy transport connections
5. Analysis of nearby competition

Legal and financial documentation needed

You’ll need these documents:

1. Clear property ownership without disputes
2. Current licenses, including fire safety certification
3. GST registration (required for hospitality businesses)
4. Personal ID (Aadhaar card, PAN card)
5. Business registration papers
6. Proof you can make the investment

Case Study

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Here are three real-life success stories that show OYO’s franchise model performance in India.

Case Study 1: Traditional Hotel Transformation

OYO’s move from an aggregator to a franchise model in 2018 brought remarkable results. This strategic change generated over 90% of the company’s revenue. The simplified management structure became a winning factor. Each floor manager handled 100 rooms, while daily audits covered 30% of hotels. This model increased OYO’s commission from 18% to 22%, which proved financially viable for OYO and its franchise partners.

Case Study 2: Profitability Turnaround

The company’s recent financial performance verifies its franchise approach. Q2 FY25 showed a profit of INR 158 crore, a significant jump from the INR 50 crore loss during the same period last year. The first half of FY25 delivered a total profit of INR 290 crore. Revenue in Q2 FY25 grew to INR 1,578 crore. These numbers express the maturity of OYO’s franchise strategy.

Case Study 3: Market Penetration Success

The franchise model works especially well in underserved markets. OYO gained ground faster in tier-2 and tier-3 Indian cities where budget accommodation was scarce. The company’s standardised guest experiences drew both leisure and business travellers to these locations. This created new market opportunities for franchise partners in areas that were overlooked before.

Conclusion

The OYO franchise is a smart bet for hotel owners who want to scale fast without spending crores. With ₹5–30 lakhs investment, a strong brand name, and high-tech support, OYO offers one of the most accessible franchise models in India. If you have a hotel property (or plan to lease one), OYO can be your growth hack in 2025.

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FAQs About OYO Franchise (2025)