A Complete Guide on how to Start a Chai Sutta Bar Franchise
Learn how to start a chai sutta bar franchise, CSB franchise cost, profit margin, requirements & more
indiagold team
29 Jun 2022
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For Indians, chai is more than a beverage - it's an emotion. It’s what we reach for first thing in the morning, a tonic of sorts to uplift our mood. Studies reveal that the average Indian drinks 2-3 cups of tea a day. No wonder India is called a tea-drinking nation!


One fine day in 2016, Anubhav Dubey and Anand Nayak decided to cash in on this obsession - and opened the 1st outlet of 'Chai Sutta Bar' (CSB) in Indore, Madhya Pradesh. They soon expanded to other parts of India, and even abroad.


Today, there are 150+ outlets of CSB in approximately 70 cities. Before we move on, it’s important to note: despite its name containing the word ‘sutta’ (cigarette), Chai Sutta Bar neither sells cigarettes nor permits smoking on its premises.


Although you can find tea stalls in every corner of the world, Chai Sutta Bar is still growing by leaps and bounds. A major reason for this is that CSBs sell chai in ‘kulhads’ (traditional clay cups). The rich flavour and aroma imparted by kulhads make tea even more enjoyable, thus attracting scores of tea lovers to their stores.


How to Start a Chai Sutta Bar Franchise?

Before you start your own Chai Sutta Bar franchise, it's vital to understand the details of CSB franchise cost, models, required experience, rules and regulations, feasibility and more.


So read on, as we detail all steps & information you need to open a CSB franchise:


Choose a Franchise Model:


Choose from 2 (cutely named!) franchise models: FOFO (Franchise owned Franchise operated) and COCO (Company-owned Company operated). FOFO: CSB charges a fee to rent out its brand name. The company and franchise owner sign an agreement when the brand name is rented. In this case, the franchise investor is the owner and all the expenses are handled by the franchise. COCO: In this, the company itself carries out all major business tasks. The company itself invests the money and the company’s employees also manage the franchise.


Choose an Outlet:


CSB offers 3 types of outlets: Kiosk: This is the smallest type of outlet, and offers a limited menu. The seating area is approximately 300 to 400 sq. ft. Medium: Slightly larger than a kiosk and smaller than a mega, the medium outlet has a small seating area and a slightly larger menu. Mega: The largest outlet type, it offers CSB’s complete menu along with a large seating area for chai lovers.


Experience Required:


CSB prefers franchise owners with experience in the Food and Beverage (F&B) industry, thus ensuring they can handle operations without hassle. Additionally, the more experienced you are, the higher your chances are of earning profit. Experience allows you to build strategies and make a business plan that helps your company grow.


However, you can own a chai sutta bar franchise even if you don't have F&B experience. CSB offers training and support to help you get started. It helps you form a plan, and understand the type of business that will be suitable for you.


Pick the Right Location:


Picking the right area to set up your CSB franchise will be a huge factor in its success. The thumb rule is to pick a location where you can get maximum footfall, as this will help you get more customers, and eventually earn more profits.


CSB prefers outlets to be near crowded markets, colleges, offices, railway/bus stations or malls. The required area ranges from 400 to 2000 sq. ft, depending on the type of outlet you choose.


Determine the Cost of the Franchise


Due to Chai Sutta Bar’s high profit margin (35-40%), an increasing number of people are jumping on to its franchise bandwagon. But before you do the same, know the costs involved:

  • Franchise fee: ₹6 lakh
  • Commercial space: 300-400 sq. feet (minimum)
  • Equipment & machinery: ₹3 lakh
  • Interiors & furniture: ₹5 lakh
  • Raw materials initial investment: ₹2 lakh
  • TOTAL INVESTMENT: ₹16-18 lakh
  • Term of franchise: 5 years

If you find it difficult to meet the CSB franchise cost, you can apply for a loan with reasonable terms.


Points to Remember while Starting a Chai Sutta Bar Franchise:


Keep the following points in mind, as they are integral to running a profitable and smooth business.


  • Hire 4-5 members to run operations smoothly.
  • Consider arranging upfront costs through a loan.
  • Partnerships with online delivery services are important.
  • Prepare a marketing plan to increase profits in real-time.
  • Rent a commercial property if you have a low budget.

Conclusion

When starting a new business, you must prepare a strategy in order to get maximum returns from your investment. As it so happens, a Chai Sutta Bar franchise is one of the most profitable businesses these days. The reason for this, as we discussed in the beginning, is Indians’ ever-growing love for tea!


As CSB continues to expand beyond India, franchise operators will certainly benefit even more from their investment. If you're looking to get started with a CSB franchise and earn sizeable profits, you must be ready with your initial investment.


For a loan to start your Chai Sutta Bar franchise, look no further than indiagold. We offer affordable & risk-free gold loans at your doorstep, without the usual endless procedures & paperwork. So reach out to us today at indiagold.co, and get ready to start earning from your new Chai Sutta Bar franchise!

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