A Complete Guide on How to Start a Chai Sutta Bar
Tea is more than just a beverage in India. It is an emotion, a culture, and a ritual that brings people together. Recognising this, Chai Sutta Bar revolutionised how Indians enjoy tea by blending traditions with modernity. This guide will help you understand how you can open a chai franchise and achieve business success.
What is Chai Sutta Bar?
Chai Sutta Bar is an Indian cafe chain that has redefined the concept of tea shops. It was founded in 2016 by two young entrepreneurs, Anubhav Dubey and Anand Nayak. Their goal was to make tea accessible and enjoyable in a contemporary setting. Starting with its first outlet in Indore, Madhya Pradesh, the brand has rapidly expanded to over 150 locations across 70 cities in India, with international outlets in Oman and Dubai.
In 2024, the Chai Sutta Bar turnover reached Rs. 150 crores. The chain is famous for serving tea in eco-friendly kulhads (earthen cups), emphasising both tradition and sustainability. Despite its name, the establishment does not serve cigarettes or alcohol.
Why Start Chai Sutta Bar Outlets?
You can start a CSB cafe business for the following reasons:
- Reputed Brand Name: Being associated with an already successful and recognised name guarantees customer trust and loyalty.
- Minimal Investment with High Returns: Starting a CSB franchise requires relatively low capital investment, high-profit margins and rapid return on investment.
- Established Supply Chain: The brand provides a reliable network sourcing raw materials, ensuring smooth operations across logistics, sales, and staffing.
- End-to-End Support: Franchisees receive full operational and marketing assistance, making it easier to establish and manage their outlets effectively.
- Profitability Models: Flexible investment models cater to various geographic locations, ensuring franchise owners can adapt to market demands while keeping overhead costs low.
Chai Sutta Bar Business Model for Franchise
The CSB company has different business models for investors. It offers scalability and adaptability based on individual preferences and capabilities:
- Franchise Owned Franchise Operated (FOFO): In this mode, the franchisee manages and operates the outlet independently after paying a one-time franchise fee. The company’s involvement is limited to branding and guidelines.
- Company Owned Company Operated (COCO): Here, the outlet is entirely owned and managed by the company. These outlets serve as benchmarks for franchise quality and branding.
Types of Outlets
There are three types of outlets for the CSB franchise:
- Kiosk: Compact outlets focus on takeaway service with a limited menu.
- Medium: This outlet includes a small seating area with a moderately extensive menu.
- Mega: Offers spacious seating and a full menu for customers to enjoy a dine-in experience.
Understanding the Chai Sutta Bar Franchise Cost
The CSB franchise cost breakdown is:
- Franchise Fee: Rs. 6 to 8 lakhs.
- Total Investment: Rs. 16 to 18 lakhs (including setup, stock, and marketing).
- Royalty Fee: 4% of monthly sales.
The actual investments may vary based on outlet size, location, and other factors.
Requirements to Apply for Chai Sutta Bar Franchise
You have to meet the basic criteria in order to apply for the CSB franchise:
- Area Requirement: The choice of location is critical for success. Ideal spots include college areas, busy marketplaces, and office hubs that attract high foot traffic. The space requirement varies from 400 to 2000 square feet. This depends on the outlet type. A prime location ensures better visibility and profitability.
- Basic Business Skills: While no prior experience in the food industry is preferred, it is not mandatory. The brand provides comprehensive training to franchise owners and their staff to ensure smooth operations. Even without experience, individuals with the right attitude and willingness to learn can successfully run a chai outlet.
- Training: This company ensures franchise owners and their staff are adequately trained to maintain consistency in quality and service. This training includes mastering tea preparation techniques, customer interaction skills, and operation management. Regular workshops and updates are also provided to help franchisees stay aligned with the brand’s evolving standards.
- Staffing: A team of 2 to 4 employees is necessary to assist with daily operations and deliver excellent customer service. These employees play a critical role in enhancing the customer experience by ensuring prompt service and maintaining hygiene standards. Properly training staff not only improves efficiency but also helps in building a loyal customer base.
What is the Profit and Payback Time for the CSB Franchise?
- Profit Margin: The CSB franchise offers an estimated profit margin of 35 to 40%. This is considered highly attractive in the food and beverage sector. This margin is achievable due to low operational costs, affordable pricing, and high customer retention. With consistent footfall and the growing popularity of chai, the franchise ensures a steady stream of revenue for owners.
- Payback Period: On average, franchise owners can expect to recover their initial investment within 1.3 years. This relatively short payback period reflects the brand’s strong demand and sustainable business model. Factors like strategic location, effective marketing, and quality service further enhance the likelihood of achieving a faster return on investment.
How to Apply for a CSB Franchise?
Follow these steps to apply for a CSB franchise:
- Visit the official Chai Sutta Bar website at chaisuttabarindia.com.
- Fill out the franchise application form with the required details.
- Wait for confirmation; shortlisted applicants will be contacted by the franchise team.
- Once approved, you will finalise the agreement and start setting up your outlet.
The application process is straightforward, and the team ensures constant guidance throughout the journey.
Application Procedure to Open a Chai Sutta Bar Cafe
The application process to open a CSB cafe is as follows:
- Submit photos and details of your proposed location.
- The brand surveys the site to assess its potential for success.
- Post-approval, you will meet the area manager to finalise the details.
- You will then collaborate with the team for interior design, training, and setup.
- The outlet typically becomes operational within 45-60 days.
This structured process ensures a seamless setup experience for franchise owners.
Conclusion
Chai Sutta Bar is not just a tea franchise, it is a cultural movement that has redefined how India connects over chai. Its innovative model, eco-friendly practices, and low investment requirements make it a standout opportunity for budding entrepreneurs. For those seeking financial support to start ventures like this, India Gold offers accessible gold-backed loans, enabling businesses to turn their assets into growth opportunities.
