Restaurant Franchise Cost in India (2025) – Fees, ROI & How to Apply

Starting a restaurant franchise in India is one of the fastest ways to enter the food business with an already successful brand name. Instead of building everything from scratch, you simply invest in a proven system, get access to training, support, and ready customers. But the most common question every aspiring entrepreneur asks is, “What is the actual restaurant franchise cost in India?” Let’s break it down step by step with real numbers, ROI insights, and how you can apply it in 2025.

What Is the Total Restaurant Franchise Cost in India?

Restaurant franchise costs can vary dramatically based on multiple factors. You’ll need to understand exactly what to budget for this business venture in 2025.

1. Overview of total investment range

The restaurant franchise world in India provides opportunities for budgets of all sizes:

• Determine your budget bracket: Restaurant franchise investments range from ₹5 lakh for small operations to over ₹5 crore for premium brands.
• Identify investment components: Your total investment has:
  1. One-time franchise fee to use the brand
  2. Set up and infrastructure costs
  3. Licensing and permits
  4. Staff training
  5. Working capital for daily operations
  6. Marketing expenses
• Calculate additional ongoing costs: You’ll need to factor in royalty fees (typically 4-10% of gross sales) and marketing contributions (2-5% of monthly revenue).
• Renewal fees: Many brands charge renewal fees every 5-10 years. These fees range from 1% to 10% of annual sales.

2. Cost differences by restaurant type

Restaurant types substantially affect your total investment requirement:

• Quick Service Restaurants (QSRs):
  1. Investment range: ₹30 lakh to ₹1 crore
  2. You’ll see faster breakeven periods
  3. Space needs are lower (often 250-750 sq ft)
  4. Examples: Fast food chains, food carts, cloud kitchens
• Casual Dining Restaurants:
  1. Investment range: ₹1 crore to ₹2 crore
  2. Mid-sized spaces with a complete dine-in experience
  3. Higher interior and equipment costs
  4. Profit margins usually fall between 15-30%
• Fine Dining Restaurants:
  1. Investment range: ₹2 crore to ₹5 crore
  2. Premium locations and extensive interiors are essential
  3. High-end kitchen equipment and trained staff
  4. Larger space requirements (often 2000+ sq ft)
• Restro-Bar Franchises:
  1. Investment range: ₹3.5 crore to ₹4 crore
  2. Liquor licensing costs extra (₹5-10 lakh)
  3. Regulatory compliance expenses are higher

3. Franchise price in India by brand tier

Each pricing tier offers unique opportunities:

• Low-investment franchises (₹5-10 lakh):
  1. Food carts, kiosks, and small QSR models lead this segment
  2. Cloud kitchens focus on delivery-only operations
  3. Regional cuisine specialists like Chaat Ka Chaska start from ₹7.5 lakh
• Mid-range franchises (₹10-50 lakh):
  1. WOW! Momo (₹25-40 lakh) stands out in this category
  2. Coffee shops like Barista (₹30-50 lakh) are popular choices
  3. Small casual dining concepts fit here
• Premium franchises (₹50 lakh and above):
  1. Global brands like KFC need ₹1-2 crore
  2. Indian chains like Haldiram’s require ₹1-2 crore+
  3. Luxury dining concepts and established restro-bars dominate this segment

Restaurant Franchise Investment Overview

What Are the Key Components of Franchise Cost?

_{Image Source: Restaurant India}

A restaurant franchise investment becomes clearer when you break it down into its basic parts. Let’s look at where your money actually goes when investing in an Indian franchise.

1. Original franchise fee

The franchise fee lets you use a brand’s name and business system:

1. Understand the fee structure: This one-time, non-refundable payment ranges from ₹2 lakh for small brands to ₹50 lakh for premium franchises.
2. Brand reputation matters: High-end brands like McDonald’s charge fees up to ₹10 crore because of their global recognition and proven business models.
3. What you get: Most franchise fees include initial training, operating manuals, and system setup support.
4. Room to talk: Newer brands looking to expand might negotiate on their fees.

2. Setup and equipment costs

Your restaurant space needs substantial investment:

1. Kitchen equipment needs: You’ll spend ₹2-5 lakh on commercial kitchen appliances, based on your cuisine and scale.
2. Interior design costs: Restaurant interiors and furniture cost ₹3-10 lakh, depending on size and concept.
3. Signage and branding: Exterior signage and branded materials cost between ₹50,000 to ₹2 lakh.
4. Tech investments: POS systems, kitchen displays, and online ordering integration run ₹2,000-₹15,000 monthly.

3. Licensing and permits

Restaurant operations need proper legal compliance:

1. FSSAI certification: Food safety licenses cost from ₹100 yearly for small businesses to ₹7,500 for large operations.
2. Municipal trade license: Costs range from ₹5,000-₹25,000 based on location and business size.
3. Fire safety clearance: You need ₹10,000-₹50,000 depending on restaurant size and safety requirements.
4. Liquor license: Serving alcohol requires ₹2.5-7.5 lakh, with costs varying by state.

4. Staffing and training

Your team’s success drives the business:

1. Training investment: Staff training needs ₹2-10 lakh for 3-6 months, covering salaries, uniforms, and brand protocols.
2. Salary planning: Monthly costs include executive chef (₹1-2 lakh), kitchen staff (₹12,000-20,000), waitstaff (₹10,000-15,000), and managers (₹40,000-60,000).
3. Recruitment costs: The Budget should include hiring expenses and staff turnover.
4. Ongoing learning: Regular refresher training maintains service quality.

5. Marketing and advertising

Brand awareness needs smart investment:

1. Local marketing: You’ll need ₹50,000-2 lakh yearly for location-specific promotions.
2. Brand marketing: Most franchisors ask for 2-5% of monthly revenue for nationwide campaigns.
3. Marketing mix: Experts suggest 50-70% for digital and 30-50% for traditional marketing.
4. Launch campaigns: Opening promotions need ₹50,000-2 lakh.

6. Working capital and insurance

Smart financial planning keeps operations smooth:

1. Operating funds: Keep ₹5-20 lakh ready for daily operations and unexpected needs.
2. Stock requirements: First inventory needs ₹1-2 lakh with monthly restocking based on sales.
3. Utility costs: Monthly bills for electricity and water run ₹5,000-20,000.
4. Insurance needs: Your business needs public liability, product liability, fire policy, and asset insurance coverage.

Key Franchise Cost Components

How Do Franchise Models Affect Cost and Control?

Picking the right franchise model matters just as much as choosing the brand itself. Your choice will affect your investment, how much control you have, and what returns you can expect. Let’s look at how different franchise structures work in India’s restaurant industry.

1. FOFO vs FOCO vs COCO explained

• FOFO (Franchise Owned Franchise Operated):
  1. You own and run the restaurant yourself
  2. The brand gives you guidelines, training, and marketing support
  3. You need to pay franchise fees plus ongoing royalties (typically 4-8%)
  4. Examples: Most Domino’s and Subway outlets in India
• FOCO (Franchise Owned Company Operated):
  1. You put up money to set up the restaurant, but don’t manage it
  2. The parent company takes care of daily operations, staff, and logistics
  3. You get fixed returns or an agreed share of profits
  4. Examples: Many QSR chains and premium hospitality brands
• COCO (Company Owned Company Operated):
  1. The brand owns and runs the outlet completely
  2. No franchisee plays any role in ownership or operations
  3. Brands use this for flagship stores or when entering new markets
  4. Examples: Apple stores, Reliance Retail

2. Cost implications of each model

• FOFO cost structure:
  1. You make the biggest upfront investment
  2. You cover all operational costs like staff, utilities, and marketing
  3. The profit potential peaks here since earnings are yours after royalties
  4. This works best for hands-on entrepreneurs who want maximum returns
• FOCO cost structure:
  1. Big initial investment but few ongoing costs
  2. Returns are lower but more predictable (usually 15-25% of revenue)
  3. The company handles day-to-day expenses
  4. Perfect for passive investors who want a steady income
• COCO cost structure:
  1. Franchisees make no investment
  2. The company pays for everything
  3. This isn’t really a franchise model, but it often leads to franchising later
  4. Brands use this to test new markets

3. Which model suits which type of investor?

• FOFO suits:
  1. Entrepreneurs who want full control of their business
  2. People with industry experience or management skills
  3. Investors are ready to take bigger risks for higher profits
  4. New business owners who want independence with brand backing
• FOCO suits:
  1. Investors who prefer minimal involvement
  2. Professionals looking for additional income streams
  3. People without operational expertise or time
  4. Those who value stable returns over maximum profits
• Master Franchise (alternative model):
  1. High-net-worth individuals who want territorial rights
  2. Seasoned entrepreneurs planning multiple outlets
  3. Investors with strong operational teams are ready
  4. People aiming for rapid regional expansion

Franchise Model Comparison

What Are the Most Profitable Restaurant Franchises in India?

_{Image Source: Restaurant India}

Want to start a restaurant franchise in India? The profit potential varies based on your investment budget. Here’s a detailed look at the most profitable options that can help you decide.

1. Top low-cost franchises under ₹10 lakh

These affordable options can bring impressive returns when you have limited capital:

1. Chai Garam: This popular tea franchise needs minimal investment but delivers strong returns through loyal customers and low operating costs.
2. Frozen Bottle: The brand specialises in premium desserts and shakes. It provides complete franchise support with location selection and marketing assistance.
3. Amul Ice Cream Parlours: Investment ranges from ₹2-6 lakhs with ROI in just 6-12 months. The brand’s massive recognition brings steady customer traffic.
4. DTDC Courier: This non-food logistics franchise needs only ₹75,000-₹2 lakhs to start and can break even within 6-12 months.

2. Mid-range brands with high ROI

These brands strike a good balance between investment and returns:

1. Wow! Momo: Setup costs range between ₹20-25 lakhs, and monthly profits reach ₹1.2-1.5 lakh after opening. The kiosk model performs well in malls and busy locations.
2. Biryani Blues: The brand has built its niche with authentic Hyderabadi biryani that brings strong customer loyalty and steady sales.
3. Tandooriwala: With investment under ₹50 lakhs and 52+ outlets nationwide, this chef-driven brand serves Indian tandoori and Mughlai cuisine with modern presentation.

3. Premium franchises and their returns

High-end options deliver matching rewards for investors with substantial capital:

1. McDonald’s: A ₹2.5 crore investment generates monthly sales of ₹40-50 lakh in prime urban spots with net profits of 13-15%.
2. Domino’s: A ₹1.25 crore investment brings monthly profits between ₹1-3 lakh. Yearly sales range from ₹80 lakh to ₹1.5 crore with 15-25% profit margins.
3. Ministry of Daru: This premium restro-bar needs ₹3-4 crore but breaks even in just 1.5-2 years. The 7% royalty starts only after the first year.

4. Real examples: McDonald’s, Domino’s, Tandooriwala, Ministry of Daru

Here’s how these brands perform:

• Domino’s:
  1. Investment: ₹65-80 lakhs for traditional stores
  2. Revenue: Traditional stores earn about ₹10 lakh monthly
  3. Profit margin: 15-25% after expenses
  4. Payback period: 2-3 years
• McDonald’s:
  1. Investment: ₹250-300 lakhs
  2. Annual revenue: About ₹2.6 crore per outlet
  3. Profit margin: 20-25% (₹20-25K profit per ₹1 lakh revenue)
  4. South/West India master franchisee earned ₹15.06 crore net profit in Q4 2022
• Tandooriwala:
  1. Investment: Under ₹50 lakhs
  2. Unique selling point: No royalty or hidden charges
  3. Support: Full staff recruitment, training, and marketing help
• Ministry of Daru:
  1. Investment: ₹3.5-4 crore
  2. Space requirement: 3000-4000 sq. ft.
  3. Agreement duration: 9 years
  4. Model: FOFO (Franchise Owned, Franchise Operated)

Top Restaurant Franchises in India (2025)

How to Apply for a Restaurant Franchise? (Step-by-Step Guide)

The application process naturally follows your research into franchise options. Getting a restaurant franchise involves several key steps that help you pick the right opportunity and prepare for success.

1. Review your budget and goals

Start with an honest look at your finances:

1. Figure out your available capital for investment (₹5 lakh to ₹5 crore range)
2. Work out the working capital you’ll need beyond the original setup
3. Think over your risk tolerance and financial safety net
4. List your business goals (passive income vs. active management)
5. Set your preferred investment timeline and expected ROI

Note that many first-time franchise owners don’t realise how tough the first year can be. Setup costs are substantial, and it might take 1-3 years to break even.

2. Match franchise options

Once you know your budget, look at potential franchises systematically:

1. Check market needs in your target location
2. Look at the competition in your preferred area
3. Match investment requirements across brands
4. Check expected ROI and typical breakeven periods
5. Look at franchise support systems (training, marketing, operations)

Visit existing franchisees of your shortlisted brands to learn firsthand about their experiences with the parent company.

3. Get in touch with franchisors and ask for an FDD

Start formal discussions with selected franchisors:

1. Fill out franchise forms through official websites
2. Ask for the Franchise Disclosure Document (FDD)
3. Reputable franchisors provide complete FDDs, though it’s not legally required in India
4. Look through franchisor history, business experience, and litigation records
5. Check initial costs, ongoing expenses, and territory rights

The FDD gives detailed information about the franchise system, financial performance, litigation history, and other key matters.

4. Check legal terms and ROI projections

Look at the franchise agreement with professional help:

1. Get a franchise law specialist to inspect all documentation
2. Check royalty structure and marketing fund contributions
3. Learn about territory rights and exclusivity provisions
4. Review renewal and termination conditions
5. Check training and support commitments from the franchisor

Pay special attention to agreement duration, your rights and obligations, support provided, royalty fees, and term length.

5. Complete agreement and start setup

Move forward with implementation after due diligence:

1. Work out favourable terms (try getting royalty waivers for initial months)
2. Get funding through personal savings, loans, or investors
3. Finish franchise training programs
4. Get required licenses (FSSAI, trade license, GST registration)
5. Start hiring and training staff

Setting up typically takes 30-45 days after completing legal formalities.

Restaurant Franchise Application Approaches

Case Study

Every successful restaurant franchise has a unique story of vision and determination. Three remarkable Indian examples show different paths to success in the restaurant business world.

Haldiram’s: A local sweet shop in Bikaner, Rajasthan, grew into a global snacking giant over a century. The brand started in 1937 with a single store selling sweets and namkeens. The founder Haldiramji’s sons took the business beyond Bikaner during the 1950s after his death. They built their first international manufacturing facility in the UK in 2016. Haldiram’s products now reach over seven million retail stores worldwide. Their presence spans Singapore, Canada, Australia, and many Asian and European countries. Their steadfast dedication to quality has led to this growth. The brand offers three distinct franchise models: kiosks, quick service restaurants, and regular dining establishments.

WOW! Momo: College friends Sagar Daryani and Binod Homagai started this brand as a small stall in Kolkata back in 2008. They had a simple yet game-changing vision to lift traditional momos into a gourmet experience. Smart adaptation to regional tastes and local ingredients while keeping authenticity intact drives their franchise success. WOW! Momo has grown from a single kiosk into an international restaurant brand through constant menu breakthroughs and eye-catching branding.

Tandooriwala: This chef-driven culinary brand specialises in authentic Indian tandoori and Mughlai cuisine with modern presentation. The brand has expanded to 52 outlets across India. Franchisees need an investment of under ₹50 lakhs, and the company offers a strong business opportunity without royalty fees. Their unique chef-led approach ensures perfect execution of every dish, process, and customer experience.

Conclusion

Investing in a restaurant franchise in India can be a golden opportunity in 2025, thanks to the booming food delivery culture and rising eating-out habits. But the restaurant franchise cost varies widely — from ₹5 lakh for budget kiosks to ₹2.5 crore for premium dining brands. The key is to choose a brand that matches your budget, location, and long-term vision. Always calculate ROI carefully before signing up.

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