Tea is the most popular beverage in India, which is not surprising given the country’s legendary passion for the beverage. An astounding 837,000 tonnes of tea are consumed in India each year, according to statistics! Tea is the second most popular beverage in the world, after water. India is the world’s second-largest producer of tea, according to the Indian Brand Equity Foundation (IBEF). This article will provide you with the answers of your queries such as “what is cost & investment to open a Chai Sutta Bar franchise in India?” and what the profit margin for this type of business with daily or monthly income.
The Booming Tea Cafe Industry
The tea cafe sector has experienced rapid expansion in recent years, drawing numerous investors. The main cause of this increase is the rise in urban consumers who want to indulge in cups of hot beverages and have more discretionary income. Nearly 88% of Indian families drink tea, according to a poll conducted by the Tea Board of India, which means that roughly 64% of the populace enjoys this popular beverage.
It is evident from these observations that India offers profitable prospects in the tea industry. A franchise with Chai Sutta Bar, one of the top tea café chains in India, is among the most exciting ways to invest in this booming sector.
The Origins of Chai Sutta Bar
Anubhav Dubey and Anand Nayak, two innovative people, established Chai Sutta Bar in Indore MP in 2016. The two had different objectives, even though their parents had standard career goals for them, such becoming chartered accountants, MBA grads, or civil service officers. They chose to start their own business after making several attempts to pass competitive tests.
Frequently, Anubhav and Anand would grab their motorcycles, fill them up with gas, and go around the city looking for ideas for their business. The idea of opening a tea shop was sparked by their study, which showed that there was a strong demand for chai everywhere. With an initial financial investment of INR 3 lakhs, they opened their first store, placing it in close proximity to a girls’ hostel to draw customers.
The Growth of Chai Sutta Bar Outlets
The number of Chai Sutta Bar locations has increased significantly over time. In addition to overseas franchisees in Dubai and Oman, it currently has more than 550 locations in more than 320 Indian towns. Young people spend an average of 600,000 minutes at Chai Sutta Bar locations, making these cafés their preferred hangouts.
Chai Sutta Bar provides franchisees with three different kinds of locations:
• Kiosks: Compact configurations perfect for speedy service.
• Medium: Conventional coffee shops with cozy seating areas.
• Mega: Huge cafes with plenty of seats and menu options that are intended for high foot traffic.
Business Models of Chai Sutta Bar
There are two main business models used by Chai Sutta Bar:
1. Franchise Owned Franchise Operated (FOFO): Under this business model, the franchise operator rents the brand name for a set, non-refundable price for a predetermined amount of time.
2. Company Owned Company Operated (COCO): Chai Sutta Bar owns and runs this kind of business, handling every aspect of it from establishment to management.
The Unique Chai Sutta Bar Menu
Chai Sutta Bar’s pricing strategy is one of its primary differentiators. According to co-founder Anubhav Dubey, they stand apart from rivals thanks to their distinctive service manner and reasonable prices. In contrast to other tea businesses like Chaayos and Chai Point, which target a more affluent clientele, they want to establish a brand for the general public. The Menu of Chai Sutta Bar was devloped to address the basic needs of everybody at affordable prices.
Tea at Chai Sutta Bar starts at an astonishingly modest INR 10 per cup. On the other hand, comparable products from other well-known brands cost between INR 100 and INR 120. The popularity of Chai Sutta Bar has been greatly boosted by this price model.
The tea is served in kulhads, which are tiny clay cups made by about 500 potter families. An astounding 300,000 kulhads are produced every day. From serving only standard kulhad tea, the menu now offers a wide variety of flavors, such as:
Masala Chai, Tulsi Chai, Adrak (ginger) Chai, Kesar (saffron) Chai, Chocolate Chai, and Elaichi (cardamom) Chai
In addition to tea, the café provides a range of appetizers, including spaghetti, burgers, sandwiches, and noodles, all of which increase profit margins. Despite the name, Chai Sutta Bar locations prioritize the health of their patrons and the integrity of their brand by keeping a smoke-free environment.
Why Choose a Chai Sutta Bar Franchise?
There are many benefits to purchasing a Chai Sutta Bar franchise:
- Strong Media Presence: Chai Sutta Bar’s success in growing to a 100 crore business in just six years without outside capital has attracted a lot of media attention.
- Established Brand Recognition: Over the years, the brand has built a dependable clientele.
- Minimal Capital Expenditure (Capex): In comparison to many other company models, the franchise model involves smaller initial investments.
- All-inclusive Supply Chain: Chai Sutta Bar has a productive supply chain that covers sales, logistics, technology, employees, and vendors.
- Marketing and Operational Support: Throughout their contract, franchisees get continuous assistance with marketing and operations.
- High Profitability: Significant earnings are guaranteed by the business model with daily income Rs 1500 to 2500 or more.
- Adaptable Investment Models: A wider geographic reach is made possible by various investment possibilities.
- Minimal Overhead: Profitability is raised by comparatively low operating expenses.
- Greater Return on Investment (ROI): The franchise provides a remarkable 108% ROI on average.
- Growth Potential: The company is built to scale and grow sustainably.
- Reasonably priced infrastructure: Franchise setup doesn’t necessitate costly infrastructure expenditures.
- Cost-Effective Franchise Fee: In comparison to other brands, the initial franchise fee is reasonably affordable.
- Knowledgeable Management Team: A group of experts from a range of disciplines, such as operations, technology, and education, support the franchise.
- Involvement: To set each franchise apart from its rivals, Chai Sutta Bar management is dedicated to encouraging involvement and creating successful business plans.
Chai Sutta Bar Franchise Cost and ROI
While investment amounts can vary based on location, outlet type, and foot traffic, here’s a general breakdown of the costs associated with a Chai Sutta Bar franchise:
- Franchise Cost: INR 6 to 8 lakhs
- Outlet Interiors: INR 5 lakhs
- Royalty Fee: 4%
- Minimum Investment: INR 16 to 18 lakhs
- Machinery & Equipment: INR 3 lakhs
- Minimum Space Requirements: 300 to 400 sq. ft.
- Initial Raw Material Investment: INR 2 lakhs
- Anticipated Profit or Return on Investment: 108%
- Monthly Income approximately 50K to 1 lacs.
- Payback Period: 14 to 18 months
- Franchise Agreement Period: 5 years
Steps to Apply for a Chai Sutta Bar Franchise
If you’re interested in becoming a franchisee, follow these steps:
- Visit the Official Website: Go to www.chaisuttabarindia.com.
- Fill Out the Franchise Form: Locate the franchise application form on the website and fill in the required details.
- Submit the Form: After completing the form, submit it online.
- Confirmation Prompt: You’ll receive a thank you message upon submission. If shortlisted, the Chai Sutta Bar team will reach out to you.
Chai Sutta Bar Franchise Application Procedure
- Provide Location Details: Submit photographs and relevant information about your chosen retail location to the Chai Sutta Bar team.
- Location Survey: The Chai Sutta Bar team will conduct a survey of your location and advise whether it is profitable.
- Approval and Meeting: Once approved, you will meet with the area manager to discuss further steps.
- Business Setup Support: The area manager will assist you in setting up the business and building relationships with local suppliers.
- Outlet Design: You can choose to have the interior designed by the Chai Sutta Bar team or customize it yourself.
- Training: The team will provide training and support throughout the setup process.
- Inauguration: After approximately 45 to 60 days, your Chai Sutta Bar franchise outlet will be ready for inauguration.
Eligibility Criteria for a Chai Sutta Bar Franchise
To become a Chai Sutta Bar franchisee, applicants need to meet certain criteria:
- Adequate Space: You must have sufficient space that meets the franchise’s requirements.
- Training Requirement: You must complete the training program provided by the Chai Sutta Bar team.
- Staffing Needs: At least 2-4 workers will be required to assist in operations.
- Business Acumen: While a degree isn’t mandatory, familiarity with business management and tea production is essential.
- Essential Equipment: You’ll need to acquire furniture and equipment, including a counter desk, billing desk, tables, chairs, and printing machines.
Documents Required for Chai Sutta Bar Franchise Ownership
To successfully establish a Chai Sutta Bar franchise, you’ll need to provide several documents:
- Signage License
- FSSAI License ( food license)
- Trade License
- Business Registration (for sole proprietorship or partnership)
- GST Registration & GSTIN Number
- Shop Agreement
- Registration Papers
- Required Photographs
Conclusion: A Bright Future with Chai Sutta Bar
The rapid expansion of Chai Sutta Bar in India is a testament to its successful business model and the love for tea in the country. With the backing of an experienced team and a commitment to affordability, Chai Sutta Bar offers an incredible opportunity for aspiring entrepreneurs to tap into the booming tea cafe market.
If you’re looking to invest in a franchise that combines passion with profitability, Chai Sutta Bar is the perfect choice for you as lowest franchise cost!
FAQs on Chai Sutta Bar Franchise
What is the minimum investment required for a Chai Sutta Bar franchise?
Chai Sutta bar franchise is the least expensive option. The minimum investment typically ranges from INR 16 to 18 lakhs.
What is the average ROI for Chai Sutta Bar franchisees?
Chai Sutta bar franchisees can expect an impressive average ROI of 108%.
How long does it take to set up a chai sutta bar franchise?
The setup process generally takes around 45 to 60 days.
Is prior experience required to open a franchise?
While previous experience is beneficial, it is not mandatory. A willingness to learn and manage the business is crucial.
What type of support does Chai Sutta Bar provide franchisees?
Chai Sutta Bar offers comprehensive support, including training, marketing, and operational assistance throughout the franchise agreement period.
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