I still remember drinking tea with my friends-that was one of the most wonderful moments that everyone cherishes nowadays, right? We only consumed tea, but for some, it has turned into a successful business. Today, we’re going to talk about one of the most popular tea shops in India, Chai Sutta Bar, which now has 550 outlets across the country.
What’s the secret behind the success of the Chai Sutta Bar franchise? And how can you get your own franchise in 2024?
It’s exciting because I’m about to share some really interesting insights about the Chai Sutta Bar franchise with you. So, shall we begin?
The Beginning of Chai Sutta Bar
Chai Sutta Bar was founded in 2016 in Indore by two ambitious entrepreneurs, Anubhav Dubey and Anand Nayak. While their parents envisioned them becoming CA, MBA, or UPSC graduates, Anubhav and Anand had different plans. After numerous attempts to crack competitive exams, they found themselves drawn toward a different path—entrepreneurship.
Their journey began with long bike rides around the city, filling up with 50 liters of petrol and searching for inspiration. Through their explorations, they discovered the universal love for chai and decided to turn this passion into a career. With an initial investment of INR 30 Lakh, the duo launched their first Chai Sutta Bar outlet in Indore.
To attract customers, they cleverly set up their first outlet outside a girls’ hostel, knowing it would draw a crowd. They also invited friends to hang out at their café, creating the impression of a bustling, successful business.
Chai Sutta Bar Outlets
Over the years, the number of Chai Sutta Bar outlets has skyrocketed, transforming the brand into the ultimate hangout spot for youth. Today, Chai Sutta Bar boasts over 550 outlets across 320 cities in India, with a global presence in Dubai and Oman.
The secret behind this rapid expansion? A keen understanding of youth culture and the strategic placement of outlets. In just seven years, Chai Sutta Bar has become a household name, and now, you too can be part of this success story by exploring the Chai Sutta Bar franchise cost and options.
Chai Sutta Bar offers three types of outlets for franchises:
- Kiosks
- Medium Outlets
- Mega Outlets
Chai Sutta Bar Business Models
Chai Sutta Bar operates two distinct business models, each offering unique opportunities for franchise owners:
- FOFO (Franchise Owned Franchise Operated): In this model, the company leases its brand name to the franchise operator for a specified non-refundable fee, known as the Chai Sutta Bar franchise cost. This allows the operator to run the outlet under the established brand while maintaining ownership.
- COCO (Company Owned Company Operated): Here, the company retains full ownership and operational control of the outlet. Every aspect, from setting up the store to daily operations, is handled by Chai Sutta Bar. This model does not involve franchises.
Chai Sutta Bar Menu
The Chai Sutta Bar menu is a significant factor in its success. Co-founder Anubhav Dubey attributes their differentiation to the affordable price point and unique way of serving tea. Unlike other premium brands like Chaayos or Chai Point, Chai Sutta Bar caters to the masses.
Tea is served in traditional clay cups, known as kulhads, sourced from over 500 potter families who produce around 3 lakh kulhads daily. The menu, which started with regular kulhad tea, has expanded to include flavors like:
- Chocolate Chai
- Adrak Chai
- Kesar Chai
- Masala Chai
- Tulsi Chai
- Elaichi Chai
Alongside tea, Chai Sutta Bar offers a variety of snacks, including sandwiches, noodles, burgers, and pasta, ensuring a better margin for franchise owners. Despite the name, Chai Sutta Bar maintains a smoke-free environment, prioritizing the health of its customers.
Reasons to Choose a Chai Sutta Bar Franchise
- Proven Success: In just six years, Chai Sutta Bar has grown into a 100 crore company without external investment.
- Minimal Capex, Greater Returns: The Chai Sutta Bar franchise cost is reasonable, with high profitability and a robust supply chain.
- Support & Marketing: Chai Sutta Bar offers comprehensive marketing and operational assistance throughout the franchise agreement period.
- Flexibility: Different investment models allow for wider geographical reach.
- Low Overheads & High ROI: With an average ROI of 108%, the Chai Sutta Bar franchise cost is well worth the investment.
Chai Sutta Bar Franchise Cost & ROI
The Chai Sutta Bar franchise cost varies depending on location, outlet type, and footfall. Here’s a breakdown:
- Franchise Cost: INR 6 to 8 Lakh
- Initial Investment: INR 16 to 18 Lakh
- Outlet Interiors: INR 5 Lakh
- Machinery & Equipment: INR 3 Lakh
- Raw Material: INR 2 Lakh
- Royalty Fee: 4%
- Space Requirement: 300 to 400 sq. ft.
- Payback Period: 14 to 18 months
- ROI: 108%
Steps to Apply for a Chai Sutta Bar Franchise
Ready to invest? Follow these steps to apply for a Chai Sutta Bar franchise:
- Visit the official website: www.chaisuttabarindia.com
- Fill out the franchise form with your details.
- If shortlisted, the Chai Sutta Bar team will contact you.
- Provide photographs and necessary details of your retail location.
- The Chai Sutta Bar team will survey the location and advise on profitability.
- Upon approval, meet with the area manager to finalize the agreement.
- Set up your outlet with the support of the Chai Sutta Bar team.
- Receive training and prepare for your grand opening in 45 to 60 days.
Eligibility Criteria for a Chai Sutta Bar Franchise
- Adequate Space: Meet the space requirements set by Chai Sutta Bar.
- Training: Complete the training provided by the Chai Sutta Bar team.
- Staff: Employ 2-4 workers to assist in daily operations.
- Skills: While no degree is required, familiarity with business management and tea-making is essential.
Documents Required for a Chai Sutta Bar Franchise
Here’s what you’ll need:
- Signage License
- FSSAI License
- Trade License
- Business Registration
- GST Registration & GSTIN Number
- Shop Agreement
- Registration Papers
- Required Photographs
Conclusion
Investing in a Chai Sutta Bar franchise is more than just joining a successful brand—it’s about becoming part of a vibrant community that has revolutionized the tea culture in India. With a proven business model, minimal investment, and high returns, this opportunity offers aspiring entrepreneurs a chance to tap into a growing market with the support of an established brand. If you’re passionate about tea and ready to take the plunge into a profitable venture, the Chai Sutta Bar franchise might just be the perfect fit for you.
FAQ
Franchise Cost: INR 6 to 8 Lakh
Initial Investment: INR 16 to 18 Lakh
Outlet Interiors: INR 5 Lakh
Machinery & Equipment: INR 3 Lakh
Raw Material: INR 2 Lakh
Royalty Fee: 4%
Space Requirement: 300 to 400 sq. ft.
Chai Sutta Bar franchises typically earn an average monthly revenue of around ₹5.75 lakhs. After accounting for expenses, the estimated net profit is approximately ₹1.24 lakhs per month, resulting in a net profit margin of about 22%
Chai Sutta Bar’s estimated annual sales are approximately $74.3 million, which translates to around ₹600 crores when converted to Indian Rupees. This figure reflects the brand’s rapid growth and popularity, with over 550 franchise outlets across India, serving more than 4.5 lakh cups of tea daily.
The cost to buy a Chai Point franchise in India ranges from ₹25 lakh to ₹50 lakh, depending on the built-up area and format of the outlet. This investment covers various expenses, including the franchise fee, equipment, and initial setup costs.
Breakdown of Costs:
Total Investment: ₹25 lakh to ₹50 lakh
Area Requirement: 600-800 sq. ft.
Franchise Fee: Specific amounts not detailed, but included in the total investment.
To open a Chai Sutta Bar franchise, a minimum commercial area of 300 to 400 square feet is required. There are different types of franchise models, with kiosk formats needing around 150 square feet, medium outlets requiring approximately 800 square feet, and mega outlets needing about 1200 square feet. The specific area requirement may vary based on the chosen model and location.
