Chai Sutta Bar Franchise Cost: Investment and Benefits

The Chai Sutta Bar franchise may be what you want when you have always had the idea of turning the love of chai into a profitable endeavour. The household name of not combining the traditional Indian tea culture and the modern cafe outlet, Chai Sutta bar has come to be a household name, in particular in India, with its refreshing kulhad chai, home-like presentation and youthfulness. 

The franchise opportunity provides the upstart entrepreneur with an opportunity to become a part of a fast-expanding network that is supported by a solid brand identity, economical establishment, and tested business support. Being a first-time investor or an established entrepreneur seeking to grow in the food and beverage industry, the initial step to making your own tea break success story in this already flourishing tea cafeteria industry is to comprehend the Chai Sutta Bar franchise cost, establishment specifications and profitability.

About Chai Sutta Bar

Chai Sutta Bar (CSB) is an Indian chain of tea chains, which is the largest and is rapidly expanding, with headquarters situated in Madhya Pradesh, having been established in 2016 by two entrepreneurs known as Anubhav Dubey and Anand Nayak. Its speciality is serving tea in earthen kulhads, with many flavours of chai (such as Adrak, Masala, Elaichi, and Kesar Chai), as well as snacks such as sandwiches and burgers. CSB has more than 370 outlets in 600 cities, with some being international in the UAE, Nepal, Canada and other countries.

Their business plan aims at low prices, good quality chai and eco-friendly packaging and helps the local potter communities which produce the kulhads. The brand has been associated with the creation of a Vibe of PositiviTEA, and its vision is to make the cultural experience of chai available across the world via franchising and good supply chain management.​

Why Choose Chai Sutta Bar Franchise?

The decision to join the Chai Sutta Bar franchise is attractive based on its good brand name, high profitability, reasonable investment and comprehensive system of supporting its franchisee. The brand is already popular in India, where it sells the traditional kulhad chai with a modern twist, which will guarantee a continuous customer base as well as rapid ROI.

• Good Brand recognition and Customer. The Chai Sutta Bar has a total of 550 outlets that are located in more than 320 cities; hence, it is a household brand among young adults, students, and professionals. A distinctive idea to offer chai in eco-friendly kulhads in a relaxed bar-style environment makes it stand out, which provides the company with repeat clients and good business.​
• High Profitability and ROI-The franchise will have immense profit margins of about 35-40 per cent, with the average monthly earnings of franchisees being up to 90,000 Indian rupees. The average ROI life span is between 14 and 18 months, which is confirmed by low operating expenses and effective supply chain management and a financially rewarding venture.​
• Care and Maintenance Convenience.-Franchisees enjoy constant marketing, operational assistance, training on franchising and site selection and establishment. The brand offers an established business framework where the supply chain is robust, which makes the brand simple to manage and less risky for new entrepreneurs.​
• Scalability and Low-Cost The start-up cost of the Chai Sutta Bar franchise is fairly fair at 17-18 lakhs plus franchise fees. This low cost, coupled with flexible investment formats, allows franchisees to establish facilities in large as well as smaller cities to contribute to the growth that can be scaled.​
• Unique Customer Experience-Chai Sutta Bar offers a friendly social experience of a blend between old Indian chai tradition and the new modern cafe. Its customer satisfaction and pocket-friendly pricing increase its consumer loyalty and high market acceptance.

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Chai Sutta Bar Franchise Cost in India

In India, the Chai Sutta Bar franchise has a cost between ₹16 lakh and ₹30 lakh start-up and the franchise fee alone is between ₹6 lakh and ₹12 lakh. This investment covers the following, among other things:

• Business location: Minimum of 300-400 square feet, which may be varied according to the nature and place of the outlet (kiosk, medium, or mega).
• Equipment and machinery: Cost is estimated to be ₹3 lakh, containing all the necessary equipment and machinery to make the tea and serve.
• Interiors and furniture: Estimated to be ₹5 lakh to achieve a uniform brand atmosphere that makes the customers experience more.
• Raw materials and first-time inventory: Approximately ₹2 lakh to carry raw materials.
• Staff: At a minimum, 2-4 employees are required to operate the daily business and guarantee the quality of customer service.
• Royalty fee: 4% of the monthly revenue that will be paid to the parent company.

There is no formal degree that must be strictly required in order to become a franchisee, though it is necessary to have a basic understanding of how to prepare tea, how to run a business, and have good skills to communicate with customers. Chai Sutta Bar provides full training and continuous assistance to the franchisees, such as staff training, design of the store, and operational guidance.

The franchise agreement is a typical case of a 5-year contract with an average ROI of 14-18 months. Franchisees also have to meet a number of legal and documentation requirements, including FSSAI registration, GST registration, trade license and shop establishment registration.

To apply, one needs to complete a form on the official site, and then the location will be surveyed and accepted by the team of Chai Sutta Bar. After the approval, the contracts are signed, and the support of franchise setups starts, with interior design support and launching.

The franchise is, in general, a viable opportunity for any entrepreneur who is interested in the booming tea cafe industry in India, with a strong brand presence in 370-plus locations in India and international locations.​

Profit Margin & Return on Investment (ROI)

The Chai Sutta Bar franchise profit margin is typically between 22% and 40% with most sources showing an average net profit margin of 22% and gross profit margin of 60-70%. The payback period is about 108%, that is, franchisees can look forward to recovering their investment and begin to make profits within a period of 14 to 18 months, and even in just 12 to 15 months. The amount of franchise fee royalty is between 2-4 per cent of sales monthly.

The main players in the profitability of the Chai Sutta Bar franchise are:

• Monthly sales were estimated to be approximately ₹5.75 lakhs to ₹6 lakhs.
• Profit margin is generally of the nature of 22%, some reports indicate that the profit margin is up to 35%-40%.
• ROI of about 108, and a 14-18 months payback.
• Net profit will be in the range of ₹50000-₹100000 or higher monthly, depending on location, etc.
• This makes the Chai Sutta Bar franchise a lucrative and relatively high-paying business venture in the food and beverage sector, which is favourable to investors with healthy returns and shorter breakeven. The franchise provides unending support, marketing and operational tips, which result in profitability and success.

In general, the Chai Sutta Bar franchise has a profit margin of between 22%-40% and an ROI of approximately 108% and average returns are expected to be made between 1 to 1.5 years of franchise commencement.​

Key Investment Insights:

The following are some of the key investment concepts to be taken into account by the Chai Sutta Bar franchise:

• The average initial capital outlay of a typical outlet is between ₹16 lakh and ₹30 lakh, according to the location and outlet size. This is the cost that includes the franchise charges (₹6-12 lakh), store establishment and interior (approximately ₹5 lakh), equipment (approximately ₹3 lakh), raw material and starting capital to operate the business.​
• The franchise is characterised by a high profitability and estimated monthly sales of ₹3-6 lakh and a net profit margin of 22%-45% which varies according to the source. The break-even will normally take 12-18 months.​
• The royalty is approximately 2-4 per cent of net sales, which includes continuity of the brand support and advertising. The term of franchise is generally 5 years, with good operational and marketing assistance of the franchise, including training.​
• Chai Sutta Bar is an established brand and currently operates more than 550 stores in 320+ cities with its low-budget menu and a strong brand image. This powerful brand image reduces the risk and helps maintain the constant flow of customers.​
• Chai Sutta Bar has an established business model, the entry cost is comparatively cheap compared to other food and beverage franchises, and the return on investment (an average of 108%), which makes investing in the Chai Sutta Bar franchise a rather appealing opportunity.​

The results show that the Chai Sutta Bar franchise investment is feasible to a business entrepreneur who has an interest in the tea business with a high growth rate, low startup costs and attractive profitability.

Menu Highlights at Chai Sutta Bar

The Chai Sutta Bar has the following menu points:

• Types of tea: Adrak Chai (ginger tea), Elaichi Chai, Masala Chai, Lemon Chai, Green Tea, Black Tea, Chai Shots, Chai Latte and the special chai Sutta Special (mixture of masala and lemon tea).
• Coffee choices: Hot Coffee, Cold Coffee, and the special drinks, such as Scotch Coffee.
• Snacks and bites: Maska Bun, Corn Masala Sandwich, Bombay Kacha Sandwich, Veggie Grilled Sandwich, Paneer Takatak Sandwich, Cheese Chutney Sandwich, Onion Cheese Sandwich, French Fries, Cheese-loaded Fries, Sizzling Chips.
• Pizzas: Onion pizza, Queen Margherita pizza, Tandoori cheese Corn Pizza, Zesty pizza, CSB Pizza Exotica and Veg cheese pizza.
• Types of Maggi: plain Maggi, Double masala Maggi, vegetable Maggi, tandoori Maggi, Peri peri Tadka Maggi and CSB Special Maggi.
• Pastas: White Sauce Pasta, Red Sauce Pasta.
• Chinese starters and snacks: Veg Roll, Paneer Roll, Nachos, Honey Chilli Potato, Spring Roll.
• Other dishes: Vada Pav, Masala Pav, Pav Bhaji, Burgizza, Tikki Burgizza, Paneer Puff and Masala Puff.
• Healthy alternatives: Simple Oats, Mixed Fruits Oats.
• Beverages: Assorted shakes (Banana, Papaya, Mango, Strawberry, Vanilla, Butter Scotch, Choco Milk, Oreo, Kit-Kat), Ice Crushers, Classic and flavoured Ice Teas.
• Desserts: Butter Scotch, Chocolate ice creams, Vanilla.
• Dips and extras: Mayo, Extra cheese, Kulhad, Tandoori Dip, Extra Oreo, Chilli Garlic, Extra Corn, Thousand Dip, Extra chocolate.
• Garlic breads: Garlic Bread Slice, Plain Garlic Bread, Cheese Garlic Bread, Stuffed Veggie Garlic Bread.
• Combo meals available.

All of these glimpses reveal a varied menu with tea-based beverages, fast food chastisements, pizzas, Maggi assortments, and shakes that will satisfy any taste at affordable prices.

Training & Support Provided by the Brand

The training and support offered by the Chai Sutta Bar franchise are:

• Extensive preliminary training on store operations, inventory control, customer attendancy, and hygiene standards to equip franchisees with the ability to run their businesses.
• Continuing operation support such as supply chain management, vendor partnership, troubleshooting and marketing.
• Assistance in the start-up of the business, such as location, store construction, and layout of the outlets.
• Advertisement support to have a successful launch and ongoing promotion of the brand.
• Employee training and orientation to facilitate operations.
• Assistance of area managers in establishing business and developing relations with local suppliers.
• To network with other franchisees and exchange ideas and experiences.
• About 15-20 days of training of the staff in the company outlets.

How to Apply for Chai Sutta Bar Franchise

The way to apply to a Chai Sutta Bar franchise is as follows:

• Go to the Chai Sutta Bar official site and find the section on franchising where you can post your request.
• Complete the franchise application form using your personal information, contact information, proposed outlet location, budget and any message or business plan.
• Submit the form online. A confirmation message will be sent to you informing you that you have successfully submitted it.
• In the event of you being shortlisted, the Chai Sutta Bar team will proceed to contact you to discuss further franchise terms, costs, and expectations.
• Give elaborated photos and details of your planned retail place to do a site visit and confirm with the Chai Sutta Bar team.
• Once the site has been accepted, sit down with the area manager to negotiate and settle on the franchise terms.
• Sign a franchise contract after both sides are satisfied.
• Get training conducted by Chai Sutta Bar on operation, tea preparation, and service to customers.
• Establish your outlet with the help of the franchisor, interior design assistance where necessary.
• Introduce the outlet with marketing assistance and continued operation assistance of Chai Sutta Bar.
• The list of the required documents varies and typically includes FSSAI registration, trade license, GST registration and GSTIN number, shop agreement, business registration, signage license and identity proofs.

The whole process normally takes 45-60 days between application and opening of outlets.

Requirements to Become a CSB Franchise

The major qualifications to join the Chai Sutta Bar franchise include:

• Investment: Investment of approximately ₹16-18 lakh, including franchise fee ( ₹6 to 8 lakh), set up, equipment, interior and raw materials.
• Space- A commercial space of 300 or above and 400 or above must be situated in the areas of heavy pedestrian flows, like bus stands, railway stations, shopping malls or in a learning setting.
• Employees: The minimum number of employees required to run the outlet will be 2 to 4.
• Skills: There is no formal degree needed, though it is significant to have skills in business management, tea preparation, and good customer service.
• Documents: Should possess licenses like FSSAI, Trade License, GST registration, Signage license, Business Registration, shop agreement and registration papers.
• Training: The franchisee will have a detailed training and operational assistance provided by the Chai Sutta Bar staff.
• Approval Process: Provide location information and pictures to the future site assessment. When approved, a franchise deal is signed, and support is set and launched.
• Tenure of Franchise: 5 years on average.
• Setting up Time: It normally takes approximately 45 to 60 days before opening with approval.

These are in order to ensure that the prospective franchisees meet brand requirements as well as operating practices to open an outlet and run it effectively.​

Challenges to Consider Before Investing

The problems, including financial commitment at the start of the franchise and in running the franchise, brand compliance, and location, among others, will compel potential franchisees to think before deciding to commit to the Chai Sutta Bar franchise.

Financial Challenges

• The initial capital required to open up a Chai Sutta Bar franchise is between ₹30 and ₹16 lakhs. This includes franchise fee (₹16-12 lakhs), set up and interior (approximately ₹5 lakhs), machinery (approximately 3 lakhs), inventory (approximately 2 lakhs) and working capital (₹5 lakhs to meet daily expenses). This may be a huge investment for first-time entrepreneurs, and this must be planned in terms of finances.
• There exists a royalty fee of 4 per net sales of the franchisee monthly, which influences the profitability and cash flow of the franchisee. The profit margins are good, and franchisees have to include such recurring royalty payments in their financial forecasts.

Brand and Operation Compliance.

• Franchisees are required to fully comply with the brand guidelines of Chai Sutta Bar when it comes to interior design, quality of the provided products and the standards of services so that the brand consistency and customer experience are preserved.
• Franchisees and staff must be trained on how to operate, how to work with products and brand character; it takes time and dedication.

Location and Market Concerns.

• Location is a priority in ensuring success, yet it can be competitive and costly to find a good location having a direct high traffic, such as in the streets of retail or malls or even along learning institutions.
• Marketing of a start-up may be costly since the outlet has to create its own name, and it may take years before it hits the point of breakeven (usually 12-18 months).

Other Challenges

• The control of costs, management of inventory, and operational efficiency to controlling costs and guaranteeing quality.
• Franchisees should be ready to handle continuous operational management responsibilities such as staff management and customer service, which are not always easy.

These are the issues that necessitate potential investors to have a sufficient financial base, commitment to operational discipline, and strategic location and marketing approach to be successful in the Chai Sutta Bar franchise business.​

Conclusion

The Chai Sutta Bar franchise is a profitable investment where the initial investment is usually between  ₹20-30 lakhs, including a franchise fee of  ₹6-12 lakhs. This investment would include the franchise fee, interior furnishing, equipment, raw materials and marketing costs such that the investors have a lively and attractive outlet that will attract some customers to be loyal to it.

This franchise has a good profit margin and good returns on investment since the demand for chai culture in India is high, and it has a good brand presence, making it an excellent opportunity to be considered by any aspiring entrepreneur looking to ride the growing food and beverage market in this country. Potential franchisees ought to pay a great deal of attention to the cost allocation and continuous royalty payments to make a correct choice concerning the prospective business.

FAQs

Q.1 How Much is The First Franchise Fee of Chai Sutta Bar?

The franchise fee normally varies between 6lakh and ₹12lakh. The fee enables the usage of the brand, and it also incorporates training and marketing assistance at the outset.

Q.2 How Much Money is Needed as a Down Payment to Start Up a Franchise?

The amount of investment would be estimated between 16 lakh to 30 lakh based on the place of location, size of outlets, and setting up requirements.

Q.3 What is Included In The Investment?

The investment will include franchise fee, interior set-up and furnishing of outlet ((₹4-12 lakh), equipment and machinery ((₹5-3 lakh), initial raw materials ((₹1-2 lakh), marketing and promotions and miscellaneous (inclusive of these).

Q.4 How Much Space Will Be Needed Commercially?

As a rule, 300-400 sq. ft. of commercial space is necessary (some franchises work with 2,000 sq. ft.).

Q.5 What is The Profit Potential?

A gross profit of 35-70% can be anticipated by the franchise owners, and monthly incomes are between ₹150,000 and ₹250,000 in certain instances.

Q.5 What is The Franchise Tenure?

The tenure of the franchise is usually five years.