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

Launched in Indore in 2016 by Sahil Juneja and Suyash Singh Thakur, Chai Kaapi blends traditional Indian chai with coffee-focused “kaapi” brews, targeting millennials and students. Today it operates over 50 outlets across 16 cities, including expansion into the USA and Dubai.

• A familiar brand name in Indore and Bhopal
• Wide menu of high-margin beverages
• Chefless QSR model for scalability and operational simplicity

💰 Investment Breakdown

Key Financial Estimates

Component	Estimated ₹ lakhs
Franchise Fee	6.0
Security Deposit	2.0
Interior & Fit-out	10.0
Machinery & Equipment	5.0
Initial Inventory & Launch	3.0
Total Investment	≈ 24–30
Space Requirement	600–1,500 sq.ft
Royalty	~5% of net sales
Expected ROI (annual)	~16–42%
Payback Period	~6–11 months
Franchise Tenure	5–7 years, renewable

Chai Kaapi’s total startup cost ranges between ₹20–35 lakh depending on outlet size and location. A typical layout is around 600–1,000 sq.ft, with the brand charging ~₹6 lakh franchise fee, refundable deposit ₹2 lakh, and ~5% ongoing royalty on net sales.

🏗 Franchise Model & Brand Support

Format & Operation

• Target Format: QSR-style café with seating suitable for students and young professionals; stores typically sized between 800–1,500 sq.ft.
• FOFO (Franchise-Owned, Franchise-Operated) model—franchisee owns and runs outlet, brand provides systems and SOPs.

Comprehensive Support

Chai Kaapi’s support structure includes:

• Site evaluation: Footfall analysis, rent benchmarking, demographic mapping
• Store design and interiors: Brand-approved layout and theme
• Training programs: 20+ days of training on operations, staffing, merchandising, and service standards
• Supply chain & staffing: Access to high-margin beverage supply, financing/facilitation of staff
• Marketing & launch: Pre-opening marketing support, local and digital campaigns
• Ongoing support: Technical helpdesk, manual refreshers and field audits

📈 Revenue, Profit & ROI

Profitability Scenario

Chai Kaapi outlets typically report net profit margins between 29–35% on average monthly sales of ₹6 lakh. On better days (₹7.5 lakh sales), net margins can touch 40%.

Monthly Sales	₹6 L	₹7.5 L	₹10.5 L
Net Profit Margin	29%	~35–40%	~40%
Approx Net Profit	₹1.70 L	₹2.37 L	₹3.72 L

Such profitability enables expected ROI as early as 6 months under high-performing outlets; 10–16 months is more realistic for average operations.

✅ Eligibility & Ideal Franchisee

To be considered, you should have:

1. Capital readiness: ₹20–30 lakh plus reserve buffer for 6 months
2. Suitable space: 600–1,500 sq.ft in dense zones (campus, mall, transit hub)
3. Operational mindset: Some experience or willingness to oversee a retail‑F&B operation
4. Staff management capability: Hiring and training 8–10 employees per outlet
5. Legal/compliance setup: PAN, Aadhaar, GST registration, trade and food licenses
6. Long-term outlook: 5‑7 year commitment with renewal expectation

📝 Steps to Apply

1. Inquiry submission
   Fill out the franchise enquiry form on Chai Kaapi’s official or affiliate platforms like NamasteFranchise or Franchise India.
2. Initial screening
   Submit your business profile, investment readiness, and proposed site detail.
3. Site evaluation
   Chai Kaapi’s team visits potential sites to analyze footfall, accessibility, and competition.
4. Franchise agreement & payment
   Sign a 5-year renewable contract. Pay ₹6 lakh fee + ₹2 lakh refundable deposit + GST.
5. Fit‑out & store setup
   Complete interiors, equipment setup, branding, wiring, POS setup within 45–60 days.
6. Training & staff onboarding
   Attend training—internal and external staff get inducted over 2–3 weeks.
7. Soft launch
   Local marketing, hire staff, engage with aggregators, prepare for grand opening.
8. Operations and support
   Use SOPs, inventory management system, coordinate monthly reviews, and refresh training when needed.

⚖️ Pros & Cons Analysis

✅ Advantages

• Globally-expanding, millennial‑friendly brand with presence in India, UAE, and USA.
• High margin drinks with 70% gross and ~30–40% net profitability.
• Strong brand support and streamlined operations.
• ROI within 6–16 months for effective operators.
• Opportunity in rising “third‑wave” chai/coffee retail.

❌ Risks & Limitations

• High capital requirement (~₹24–30 lakh) can be steep for new entrepreneurs.
• Royalty commitment (5%) applies irrespective of profit.
• F&B businesses are risky—Reddit discussions warn of high failure rates without strong execution and cushion capital.
• Location is everything—even strong brands falter in low-footfall areas.
• Contract lock-ins—exit terms, renewal clauses should be reviewed carefully.

💡 Expert Takeaways

• Visit operational stores to observe footfall, pricing, service consistency.
• Speak with existing franchisees about actual margin, support reliability.
• Clarify royalty terms and exit clauses before signing the agreement.
• Negotiate flexible lease terms—rent escalation eats into margins.
• Maintain minimum 6-month operational reserve for contingencies.
• Be clear on staff recruitment and retention plan, as labor attrition is common.

🧾 Franchisee Quick Checklist

• Initial Investment: ₹20–30 lakh
• Space: 600–1,500 sq.ft
• Staff: 8–10 employees
• Franchise Fee: ₹6 lakh + ₹2 lakh deposit
• Royalty: 5% net sales
• Net Margins: ~29–40%
• Payback: 6–16 months typical
• Contract Term: 5 years, renewable
• Requirements: PAN, GST, licenses, favorable location

🎯 Final Verdict

Chai Kaapi offers a structured and profitable franchise opportunity in India’s evolving tea & coffee segment. For entrepreneurs able to secure a high-traffic location and execute key operational systems, the business can deliver net margins of 30–40% and ROI within 6–16 months.

However, F&B franchising comes with execution risk, capital rigidity, and heavy location dependence. Thorough due diligence—legal review, site validation, peer feedback—should be undertaken before committing.