You may be an aspiring entrepreneur/graduate or hustler looking for a franchise opportunity in India with a minimum investment.
There is no doubt that we are living in a tremendously growing economy, but after reading, covering, and meeting with several franchise owner, here are my key observations on the Tea franchise under 2 lakh in India.
Before reading this, you should understand that we are neither against any franchise or its concepts nor recommending you to buy/sell any franchise business. Through this post, you’ll learn more about the basic principle about the franchises under 2 lakh, and whether these businesses can sustain for long or not.
For the benefit of our readers, we have listed a few key points that will be discussed in this article.
- What’s the basic model for these tea franchises?
- What kind of support you should expect from the franchisor?
- How much profit margin should you expect?
- What should you consider before buying a Tea franchise for 2 lakhs?
- Who should consider buying a Tea franchise under 2 lakh?
- What should be the perfect location for a tea franchise?
- Can you truly compete with the existing tea stalls or ‘tapri’ in your area?
- What should you expect from a Tea franchise that costs only 2 lakh?
Table of Contents
What does Tea franchise under 2 lakh truly means?
Tea and cafe businesses are growing at rapid pace and the entry of several international brands, new-age cafe startups are further boosting the overall demand prospects for the industry.
While you may witness numerous franchises that have established themselves as known brands among consumers, but their high investment requirements certainly eliminate a significant portion of the entrepreneur base.
To mitigate these issues, several brands have now come up with their affordable model that costs nearly 2 lakh and more. In this setup, the franchisee (you) will receive the required license and support to own franchise’s (company) brand name and store in your city.
There could be a chance that the franchisee may also be liable to pay a royalty fee or they may need to purchase the raw material from the brand itself.
To clear further, the initial investment only covers the primary costs, and there are other expenses involved in setting up an outlet, such as interior decor, staff and store-related expenses, furniture, and more.
What’s the support does the Tea franchises provide?
As usual you’ll receive all the necessary training and support program from the franchisor. With the initial investment, you should expect the delivery of franchise license, raw material and a few major equipment that will be utilized on a daily basis.
The initial investment covers the costs mentioned below:
- Franchise and marketing fee
- Initial inventory
- Equipment and necessary machinery, including fruit mixer, gas burner, refrigerator, freezer and more.
Support: The franchisee also receives a few days of training at no cost at one of their existing locations. In case you are willing to invite a trainer to your location, you may need to make arrangements for their accommodation and food.
The franchisor supports its franchisee in putting up their business profile on several media platforms, such as Instagram and Facebook.
How much profit margin is expected from a Tea franchise under 2 lakh?
There isn’t a perfect answer for it. But you should understand that with a mere investment of 2 lakh, you shouldn’t expect a fortune.
For the initial few months, you shouldn’t expect too much from the brand. To get along with the business, you should at least spend some time and if possible do a detailed market survey before putting up an outlet in the town.
It is also true that at time you may need to put in a few extra cash for the general operation. After 6-8 months of operation, you should at least expect a net monthly earning of ₹10,000 to ₹20,000.
Again, this depends on your location. If you were truly fortunate with the brand and location placement, you can possibly earn over ₹30,000 a month.
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What you must consider before buying a Tea franchise of 2 lakh?
This piece of information can be valid for any franchise you are looking for. So, please read this carefully.
Founder’s track record and their image in the market:
Before associating with any brand, you should have detailed knowledge about its founder and their track record in operating the current and prior brands. Any negative news can irrefutably dismantle the growth prospects.
Royalty fee/any hidden charges:
Though, there shouldn’t be any royalty fee imposed on the franchisees, but it is always better to have a clear discussion on royalty fee or any other hidden charges related to the franchise.
Raw material supply chain:
In case you are operating an outlet outside of franchise’s home state, you should inquire about the proper supply channel for the raw material delivery. Any delay in raw material can again hamper your business.
Growth prospects and store’s placement:
You need to have a clear vision of brand’s growth prospects and their target areas for expansion. If the chain is majorly located in a single city or state, it could be certainly difficult for you to operate in a different city or state.
Who should exactly buy a Tea franchise of only 2 lakh?
There isn’t any perfect rule for this. If the brand is great and doing fabulous job in the business, you shouldn’t hold yourself up.
Any passionate ‘teapreneur,’ graduate, side hustler, or anyone qualified (in terms of age and basic financial skills) to set up a business in the country should be perfectly fine to open a tea business in their hometown.
You should also have some financial skills or basic customer-oriented skills to develop your location.
What should be a perfect location for a Tea franchises?
While we could have a full-fledged article on franchise location placement, this short paragraph can actually summarize everything up for a location.
These affordable tea franchises should be located near any education institute like coaching center, school, college, or university. One can also open a Tea outlet on a busy street.
The outlet size should be of at least 100 square feet with a decent space on sideway.
One must avoid opening an outlet in basements or places with low customer footfall.
Can you truly compete with the existing tea stalls or ‘tapri’ in your area?
Though you may not be willing/or have intention to compete with some of existing tea stalls or ‘tapri’, your customers or surroundings may force you to do so.
There is also a high possibility that you may need to compete even harder with them, as ‘tapris’ cater to customers from all segments, while these tea franchises have positioned themselves as perfect locations for only youths.
Wrapping Up – What should you expect from these Tea franchise under 2 lakh in India?
Through this informative piece, we have tried our best to unveil all the necessary details on Tea franchises of 2 lakh or less. We hope you have learnt the foundation and basic principle behind these franchises.
Despite its low investment requirement, one should be aware of competition from local tea shop owners. Having high earning expectations from a single outlet in a few months can be demotivating (as it’s highly impossible to generate a fortune within a month or so).
Also, a potential franchisee should understand that with only 2 lakh as an initial investment, you can’t open a full-fledged tea shop in your neighborhood. It also requires a few extra lakh for the interior decoration, lighting, furniture, and other store-related expenses.
Again, if you don’t own a space, you might need to put in extra capital on renting a shop.
To conclude, if you are seriously willing to setup a Tea outlet in your city, consider performing some market research, tea and its quality analysis (plan a visit to procure the finest raw material), find a suitable location with minimalist decor, and start your own brand.
It may take some time and few extra lakh, but it is guaranteed that even if you serve less customers as compared to the franchises, you can irrefutably generate some decent income.
Also, launching different flavor, putting competitive pricing, and little investment on local/digital marketing can help you boost outlet’s sales.
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