MBA Chai Wala Franchise Cost in India: Model, ROI, Eligibility Criteria & Steps to Apply

Founded in 2017 by Prafull Billore—an MBA dropout turned viral tea stall icon in Ahmedabad—MBA Chai Wala evolved from a local tapri into a recognized brand with over 50 outlets and ₹ 2.65 crore revenue as of March 2023. The brand stands out for its quirky marketing, affordable chai, and social media presence that appeals to youth across India.

💰 Franchise Cost & Investment Overview

A summary estimate of franchise costs:

Model Type	Space (sq. ft)	Franchise Fee (₹L)	Setup & Equip (₹L)	Inventory + Misc (₹L)	Total Investment (₹L)	Royalty / Commission	ROI Timeline
Kiosk	100–150	3	~3.9	~1.2	~14.3	~4%	~12–18 months
Dine‑In (400 sq.ft)	300–400	5	~8.5	~1.6	~22.6	~4%	~12–18 months (approx)

– Initial Investment is typically ₹8–10 L covering space, interior, equipment, stock and franchise fee (~₹3 L) for kiosk; dine‑in models cost ₹25 L or more.
– Broader listings cite ₹3–7 L franchise fee and ₹8–10 L total investment (some mention up to ₹15 L per kiosk in detailed breakdowns).
– Commission to franchisor is around 4% of gross sales, with franchisee retaining the rest.
– ROI typically falls within 12–18 months, based on average monthly sales ₹3–6 L and margins of 20–25%.

🏗 Franchise Model & Brand Support

Outlet Formats

• Small Kiosk Model: ~100–150 sq.ft, ideal for high footfall busy corners or smaller walk-in areas.
• Dine‑In Outlet: ~300–400 sq.ft with simple seating for cafes or smaller shop-in-shop locations.
• Some references mention lounge-style 500–800 sq.ft formats depending on site and demand.

Brand Support

MBA Chai Wala offers a structured franchise system:

• Training: Operations, beverage preparation, staffing, customer engagement, and hygiene SOPs.
• Design & Setup: Interior design guidance, equipment sourcing, layout planning.
• Supply & Packaging: Raw material sourcing (tea, snacks), packaging guidance.
• Marketing & Promotions: Brand-driven campaigns, local launch advertising, training helpdesk.
• Operational Support: Relationship manager guidance, ongoing audits and refresh training.

📈 Revenue, Margins & ROI Potential

Revenue & Margin Profile

• Average Daily Sales for kiosk model range ₹10,000–15,000; dine-in outlets ₹20,000–25,000 per day → monthly revenue ₹3–6 L.
• Profit Margins: Mid-sized outlets report 20–25% margin; some optimistic sources cite up to 40–50% in top locations.

ROI Timeline

• With ₹9 L investment and ₹5 L monthly turnover, net earnings ~₹1–1.5 L yield break-even within 6–12 months, but realistic conservative estimate ~12–18 months.
• Agreement tenure generally 3 years (some prefer 5-year contracts), allowing scale-up or renewal options.

✅ Eligibility Criteria & Ideal Franchisee Profile

Prospective partners typically should meet:

1. Investment Readiness: ₹8–10 L for kiosk; ₹15–25 L for dine-in formats plus 3–6 months operating buffer.
2. Suitable Location: 100–400 sq.ft in dense footfall areas—colleges, offices, markets.
3. Operational Commitment: Basic business sense; no formal degree required; friendly and committed to brand SOPs.
4. Staffing: Small team (2–3 initial; scale to 4–5 depending on demand).
5. Documentation: PAN, Aadhaar, GST, lease documents, FSSAI, trade licenses etc..

🧭 How to Apply: Step‑by‑Step Guide

1. Express Interest: Visit the official MBA Chai Wala website and fill franchise request form with your details and proposed site.
2. Screening: Brand evaluates your profile, investment capacity, and area for suitability—early validation process.
3. Site Visit: MBA Chai Wala team reviews footfall, visibility, rent, catchment, and proves site viability.
4. Agreement Signing: Franchisee signs contract (3 or 5-year term), pays franchise fee (₹3‑5 L), and deposits deposit if any.
5. Setup & Training: Within 45–60 days, shop interior, equipment, supply chain, POS and staff training get completed.
6. Launch & Operations: Soft launch with brand promotions, local marketing, and begin full functioning.
7. Support & Review: Ongoing operational support, refresher training, business reviews, assistance with scaling.

⚖️ Pros & Cons: What to Consider

✅ Advantages

• Low entry cost (~₹8 L kiosk) compared to many F&B franchises.
• Brand recognition: built-in visibility from Billore’s media story and social media buzz.
• Structured support system: training, operational guidance, marketing, supply chain.
• High margins: profit margins of 20–25%, some outlets achieve 40%.
• Fast scalability: modular formats and short set‑up time.

❌ Risks & Caveats

• Brand credibility issues: Reddit business forums cite concerns about MBA Chai Wala franchise reliability and problematic track records—some franchisees allege low support and pressure to sell franchise spots.
• Food business risks: franchise earnings depend heavily on location, staffing, cost discipline, and continuous footfall. Many independent cafe outlets fail within first year.
• Commission structure: revenue share of 40–50% to franchisor per some sources—but others say only 4% royalty—clarify contract terms carefully.
• Contract lock-in: short 3-year agreements may restrict flexibility; exit clauses need attention.

💡 Expert Tips Before Investing

• Visit operating outlets yourself to assess real-world sales, service quality, training quality.
• Talk to current and former franchisees, even those who walked out, to understand ground realities.
• Negotiate lease terms: especially for rent escalation and lock-in period.
• Understand revenue share fully: whether 4% royalty or a 50/50 revenue split is applied.
• Keep reserve capital: at least 3–6 months operational buffer before break-even.
• Clarify exit clauses, franchise transfer terms, and support liability in the agreement.

🧾 Franchisee Quick Checklist

• Investment: ₹8–10 L for kiosk; ₹15–25 L for dine-in.
• Space: 100–400 sq.ft in high-traffic area.
• Staff: 2–5 employees depending on size.
• Franchise fee: ₹3–5 L approximately.
• Royalty commission: ~4%; confirm exact percentage.
• Break-even: 12–18 months.
• Profit margins: 20–25%; up to 40–50% in ideal setups.
• Contract tenure: 3–5 years.
• Compliance: FSSAI, trade license, GST, lease agreement.

🎯 Final Verdict

MBA Chai Wala presents one of the lower-cost entry points into India’s branded tea café segment, leveraging a founder’s viral fame, a modular kiosk model, and relatively fast setup. If you’re confident of your site’s visibility, committed to operations, and scrutinize the contract carefully, ROI of 12–18 months is feasible.

That said, the brand has seen mixed franchisee reviews and franchise-model concerns. Food businesses absorb risk easily, and profits hinge heavily on execution. If you’re cautious, start lean, test the model in a kiosk first, and validate operations before scaling up.