Chai Sutta Bar Franchise in India: Cost & Process [July’24]

Quick fact, the most preferred and popular beverage in India is tea! Words would fall short to stress on how much tea is adored and loved in India, so let’s take a look at stats instead, a whopping 8,37,000 tonnes of tea is consumed in India annually! 

Following water, tea stands as the second most widely consumed beverage all across the world. Whereas, as stated by an IBEF report, India is positioned second in tea production.

Recently, the tea cafe industry has recorded a great increase in sales, attracting more investors. This is due to the increase in urban consumers with high disposable means who have initiated purchasing cups of hot beverages.

According to a survey brought out efficiently by the Tea Board of India, nearly 88% of all Indian families consume tea. Which means almost 64% of the total population of India are fond of consuming tea.

All this data combined, points at one definite fact that tea businesses provide extremely fruitful and great business opportunities in India. So, let’s buckle up and look at how we can be a part of this successful industry by investing in one of the leading tea cafe chains in India, the Chai Sutta Bar!

 

Beginning of Chai Sutta Bar

Chai Sutta Bar was established in Indore by Anubhav Dubey and Anand Nayak in 2016. While their parents aimed towards making their sons CA, MBA, CAT, UPSC etc graduates, they had other plans.

After various attempts, the duo still failed to make a mark in the competitive exams, which led to the beginning of their fruitful entrepreneurship. 

Anubhav and Anand used to hop on their bikes, fill them up with 50 litres of petrol and roam the streets in search of inspiration for their entrepreneurial venture. 

After thorough research, they realised the great demand for chai everywhere and decided to make a career out of it. 

Later, with an initial capital investment of INR 30 L, the duo commenced a tea-cafe chain in Indore.

They employed a variety of tactics to bring in a crowd, like, they established their first outlet outside a girls hostel, because what would draw more boys in other than a crowd of pretty girls.

Another tactic implanted was that the duo urged their friends to come and hangout in their outlet, so as to give the impression to the people that it was doing great.

 

Chai Sutta Bar Outlets

Chai Sutta Bar outlets have recorded a remarkable increase in the number over the years. This is solely due to the fact that Chai Sutta Bar has become the ultimate hangout spot for the youth, who are spending over 6,00,000 minutes in their outlets.

After a puny sum of 7 years, Chai Sutta Bar has over 550 outlets in more than 320 cities. They also acquire a global presence, with franchises in Dubai and Oman. 

Chai Sutta Bar offers 3 types of outlets for franchises, including-

 

  • Kiosks
  • Medium
  • Mega

 

Read More: Vending Machine Price List in India [2024]

 

Chai Sutta Bar Business Models

Chai Sutta Bar offers 2 kinds of business models, which are-

  • FOFO (Franchise Owned Franchise Operated)- The Chai Sutta Bar company rents out only the brand name for a specific non-refundable amount to the franchise operator for an agreed interval of time. The non-refundable amount can also be referred to as the Franchise Fee. 

 

  • COCO (Company Owned Company Operated)- This kind of outlet is both completely owned and operated by the company. Every operation, ranging from setting up the store to running it is carried out efficiently by the company. It is in no condition related to a franchise outlet.

 

 

Chai Sutta Bar Menu

Co-founder, Anubhav claims that their price-point and the way of serving is the key reason for their differentiation. They’ve aimed towards creating a brand for the masses instead of the classes unlike other well-established brands like Chaayos, Chai Point etc. 

They take pride in serving their tea starting at a mere sum of INR 10 per cup, making it affordable for the masses, whereas other well-established brands serve that same amount of tea for a whopping sum of INR 100- INR 120. This huge margin difference has definitely played in the favour of Chai Sutta Bar.

They serve their delicious tea in kulhads, which are small cups made out of clay. These kulhads are sourced at a whopping number of 3 lakh per day from an estimated sum of 500 potter families. 

The menu has grown longer over the years. What started as an outlet serving just regular kulhad tea, has now experienced an expansion, with the addition of other flavours like Chocolate Chai, Adrak Chai, Kesar Chai, Masala Chai, Tulsi Chai, Elaichi Chai etc. 

Keeping tea as the core, the Chai Sutta Bar has also introduced some eatables including sandwiches, noodles, burgers, pastas and many more for better margins. 

Contrary to the name, the bar-like outlets completely prohibit the act of smoking, keeping in focus the health of their consumers as well as the brand. 

 

Reasons to Choose a Chai Sutta Bar Franchise

  • Over the years, Chai Sutta Bar has received positive media coverage due to their success of establishing a 100 crore company within a puny sum of 6 years without any outside investment.

 

  • Chai Sutta Bar has managed to establish a reliable brand.

 

  • Minimal capex and greater returns.

 

  • Chai Sutta Bar operates a thorough supply chain ecosystem which supports personnel, tech, vendors, sales and logistics efficiently.

 

  • Chai Sutta Bar offers complete marketing and operational assistance throughout the agreement period.

 

  • Chai Sutta Bar offers greater profitability.

 

  • Chai Sutta Bar offers different investment models for a better geographical reach.

 

  • Chai Sutta Bar offers low overheads.

 

  • Chai Sutta Bar offers higher ROI.

 

  • Chai Sutta Bar offers growth reassurance.

 

  • Chai Sutta Bar offers affordable infrastructure.

 

  • The franchise cost for a Chai Sutta Bar is extremely reasonable.

 

  • The management team of the Chai Sutta Bar franchise is full of smart and intelligent individuals in a variety of fields like operations, technology and education.

 

  • The Chai Sutta Bar staff adorn their complete focus on engaging leads and coming up with lucrative business plans to distinguish your Chai Sutta Bar franchise outlet from the competitors.

 

Chai Sutta Bar Franchise Cost & ROI

 

While the investments depend greatly upon the location, model type, footfall etc, here’s an estimate of the costing of a Chai Sutta Bar franchise-

A Chai Sutta Bar franchise will require an estimated investment of INR  16 to INR 18 Lakh, while the franchise cost for a Chai Sutta Bar is set at an estimate of INR 6 to INR 8 L for any Indian location.

The area requirements for a Chai Sutta Bar franchise ranges from 300 to 2,000 sq. ft, close to a bus or railway station, shopping high street or educational institutes. 

You can rent a commercial place at affordable rents ranging from INR 20,000 to INR 30,000 in most cities instead of owning your own place.

The royalty fee for a Chai Sutta Bar franchise is set at 4%.

The Chai Sutta Bar franchise has set the ROI on the higher side, averaging 108%.

Given below is an estimated break-up of all the necessary investments for a Chai Sutta Bar franchise.

 

ESSENTIALS  COST & OTHER REQUIREMENTS
Franchise Cost INR 6 L- 8 L
Outlet Interiors INR 5 L
Royalty Fee 4%
Minimum Investment INR 16 L – 18 L
Machinery & Equipment INR 3 L
Minimum Space Requirements 300 – 400 sq. ft.
Raw Material (Initial Investment) INR 2 L
Anticipated Profit OR Return On Investment 108%
Payback Period 14 to 18 Months
Franchise Agreement Period 5 years

 

 

Steps to Apply for a Chai Sutta Bar Franchise

 

STEP 1:  Hop onto the official website of Chai Sutta Bar ( www.chaisuttabarindia.com ).

 

STEP 2: On the official website of Chai Sutta Bar, you will come across a franchise form.

 

STEP 3: Fill the form with the necessary details and submit it.

 

STEP 4: A thank you prompt will be shown on the screen after submission, if you’re shortlisted, the Chai Sutta Bar franchise team will contact you.

 

For further queries, you can contact the Chai Sutta Bar franchise team through the following emails-

 

 

 

Chai Sutta Bar Franchise Application Procedure

 

  1. You will be required to provide photographs and necessary information about the retail location to the Chai Sutta Bar team.

2. A thorough survey of the location will be carried out by the Chai Sutta Bar team and advice will be provided to you about whether or not the location will prove to be profitable.

3. Approval will be given to you by the team, followed by a meeting with the area manager.

4. You along with the corporation will agree if you’re given the approval.

5. You will now be assisted and supported in setting up the business and creating contacts by the area manager at every step.

6. Then the interior will be designed by the Chai Sutta Bar team or you by your own willingness. 

7. An experienced salesman will work with you and training will be provided to you by the team. 

8. After an average sum of 45 to 60 days, your very own Chai Sutta Bar franchise outlet will be ready to be inaugurated. 

 

 

Eligibility Criterion for a Chai Sutta Bar Franchise

 

Chai Sutta Bar is a well established brand with a reliable customer base. It has shown remarkable growth in mere sum of years and has proved to be a fruitful business. Hence, Chai Sutta Bar requires its future owners to tick a few criterions, including-

 

  • Area- Their first requirement is an adequate space to set up shop. There are specific space/area requirements set out by the Chai Sutta Bar team that are required to be fulfilled by franchisees.


  • Training- Thorough training provided by the Chai Sutta Bar team will be required to operate their fruitful franchise model.


  • Staff- Workers will be required to assist you in every operation of the Chai Sutta Bar franchise. The corporation requires you to staff 2-4 workers in your outlet to assist the consumers and greet them appropriately and politely. 


  •  Skill- A degree is not required to own a Chai Sutta Bar franchise but familiarity with the fundamentals of managing a company and the manufacture of tea is necessary. You must adhere to every rule provided by the Chai Sutta Bar team and interact with the consumers positively and efficiently.
  • Furniture- A variety of furniture will be required including counter desk, billing desk, table and chairs, printing machine etc.

 

 

Documents Required to Own a Chai Sutta Bar Franchise

A number of documents or certificates are required to own your very own Chai Sutta Bar franchise, the list is given below-

  • Signage License
  • FSSAI License
  • Trade License 
  • Business Registration (needed for sole partnership or proprietorship)
  • GST Registration & GSTIN Number
  • Shop Agreement
  • Registration Papers
  • Required Photographs

 

 

Afterword

The rapid growth of Chai Sutta Bar in India is proof enough for the success of the company. In a mere sum of 7 years, Chai Sutta Bar has managed to become the ultimate hangout spot for the youth. The tea cafe industry is on a rise in India, and this is the perfect time and the perfect company to enter in and with. So, iron your suits and begin your fruitful entrepreneurial journey with a Chai Sutta Bar franchise now!

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