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

Founded in Bengaluru in 2010 by Amuleek Singh Bijral under Mountain Trail Foods, Chai Point has emerged as a premium tea café chain operating in eight cities across India, with focus on retail outlets, corporate vending (“BoxC”), and airport/office delivery models. It has around 120 company-owned and over 25 franchise stores as of early 2025.

💰 Franchise Cost & Investment Overview

✔️ Cost Breakdown Table:

Component	Range (₹ lakh)
Franchise Fee	1.5 – 5
Security Deposit	Approx. 2
Setup / Interiors (incl. POS)	5 – 20
Equipment & Chai Bots	2 – 3
Initial Inventory & Stock	~2
Working Capital (3–6 months)	5 – 7
Total Estimated Investment	25 – 50 lakh
Space Required	600 – 1,000 sq.ft
Royalty / Revenue Share	6% typically
Franchise Term	7 to 10 years, renewable
Target ROI	18–50% (per sources)
Break-even	~1–2 years depending on model

• Most credible sources report a total investment of ₹20–30 lakh, with franchise fee ₹1.5–3 lakh, security deposit ₹2 lakh, setup ₹5–10 lakh, equipment ₹2–3 lakh, stock ₹2 lakh and working capital ₹5 lakh, and royalty of 6% monthly sales. ROI is usually anticipated within 2–3 years, with profit margins around 15–25%.
• FranchiseIndia lists a slightly higher bracket of ₹30–50 lakh, franchise fee ₹5 lakh, 50% projected return, and a payback window of 1–2 years.
• Some platforms like StartupYo and SkillsAndTech confirm ₹40–50 lakh upper range with standard store area of 600–800 sq.ft and 4–5 staff members needed.

Note: One outlier article claims Chai Point doesn’t offer franchises at all—but this appears incorrect based on multiple credible franchise listings.

🏗 Franchise Model & Brand Support

Franchise Format

• FOFO: Franchisee-owned, franchisee-operated retail outlet (franchise pays royalty from sales).
• Store size: Ideally 600–1,000 sq.ft in high-visibility areas like malls, business parks, metro zones or airport lounges.

Brand Support Includes

• Operational Training: Through Mountain Trail Academy (MTA), covering chai preparation, staffing, billing, hygiene standards.
• Design & Fit-out: Guidelines and support for interiors, counters, chai-bot/service kiosks.
• Technology & POS: Tea vending machinery, billing systems, inventory controls.
• Supply Chain: Access to garden-to-glass packaged tea leaves, snacks, and branded raw materials.
• Marketing & Promotions: Brand-level campaigns plus local launch support.
• Field Assistance: Site identification, performance monitoring, refresher training.

📈 Financials: Earnings & ROI

Revenue & Margins

• Reported profit margins range from 15–25%, with revenue-sharing royalty of 6% per month.
• FranchiseInvestments notes margins around 20–30% and expected ROI ~18% over contract term.
• SMERGERS data (FICO investment model) indicates an EBITDA of ~25–26%, with franchisee receiving ~17–19.5% of gross monthly revenue, plus an 18% monthly return on initial investment over 7 years (mainly for investors, not operator-managed).

Payback Timeline

• Conservative ROI targets forecast break-even within 18–24 months in average locations; busy urban outlets may achieve ROI within 12–18 months.
• Some sources still cite 1–2 years payback with 50% anticipated return on investment.

✅ Eligibility & Ideal Franchisee Profile

Prospective franchisees should meet these criteria:

1. Capital availability: ₹25–50 lakh including working capital, with access to site rent and operations buffer.
2. Commercial location: Access to 600–1,000 sq.ft space in malls, IT parks, high-footfall corridors.
3. Operational capacity: Experience in F&B retail helpful but not mandatory; must hire/train at least 4–5 staff and manage operations effectively.
4. Commitment to brand standards: Hygiene, service consistency, adherence to SOPs.
5. Documentation readiness: PAN, GST, identity proof, lease agreements, KYC bank statements etc.
6. Long-term orientation: Franchise term 7–10 years; potential for renewal and expansion.

🛠 Step‑by‑Step Franchise Application Process

1. Make Initial Inquiry
   Visit Chai Point’s official website and submit a franchise inquiry via contact form or email. Alternatively, apply via trusted franchise portals.
2. Screening & Profile Submission
   Share business profile, location details, investment readiness and vision.
3. Site Visit & Due Diligence
   Chai Point representatives evaluate the proposed outlet location based on footfall, accessibility, neighborhood demographics.
4. Franchise Agreement & Fee Payment
   Agree to contract terms (7–10-year term, 6% royalty, renewal clauses), pay franchise fee and refundable security deposit.
5. Store Design & Setup
   Collaborate on interior design, equipment installation, chai-bot kiosks, furniture, POS setup as per brand guidelines.
6. Training & Staffing
   Complete mandatory training at MTA or designated brand facility; train staff in tea preparation and customer service SOPs.
7. Soft Launch & Marketing
   Grand opening with local promotions; receive marketing collateral; integrate with delivery partners if applicable.
8. Ongoing Operations & Support
   Benefit from field visits, performance monitoring, periodic audits, menu guidance, and refresher training.

⚖️ Pros & Cons: What to Consider

✅ Advantages

• Low-to-moderate capital investment vs larger QSR brands.
• Strong brand equity from day one.
• High profit margins (~20–30%) in good locations.
• Full training and operational support.
• Possibility of corporate tie-ups and B2B deliveries (BoxC model).

❌ Caveats

• A pivotal Reddit caution: food/beverage franchises tend to fail without capital backup and operational discipline; franchise fees may not pay off if margins shrink.
• Tea is a commoditized offering—branding must deliver sustained appeal.
• Location and operating cost control (rent, staffing) critically affect ROI.
• Royalty must be paid regardless of sales dips; rigid contract terms may limit flexibility.
• Some outlets reported slower-than-promised returns depending on location saturation.

💡 Expert Tips Before Investing

• Visit existing Chai Point outlets—check consistency, footfall, and service quality.
• Negotiate lease terms and rent escalation—rent is a major operating cost.
• Read the franchise agreement thoroughly—ensure clarity on renewal, exit terms, sales targets, and commission structure.
• Build contingency capital for at least 6–9 months before breakeven.
• Talk to current franchisees about experience with support, supply chain, and margin realities.

🧾 Franchise Checklist at a Glance

• Investment ₹25–50 lakh + working capital
• Space: 600–1,000 sq.ft in high footfall zone
• Franchise fee ₹1.5–5 lakh; security deposit ~₹2L
• Royalty: typically 6% of monthly revenue
• Break-even in 12–24 months
• Staff size: 4–5 to start
• 7–10-year renewable agreement
• Commitment to brand SOP and quality

🎯 Final Verdict

Chai Point presents a balanced franchise opportunity for those looking to enter the organized tea café space with brand power and operational support. With a moderate capital requirement and potential for decent margins, ROI is realistically achievable in 1–2 years in prime locations.

That said, success hinges on location selection, cost discipline, staff training, and understanding contract terms. This model suits disciplined entrepreneurs with retail appetite and F&B interest.