written by | February 16, 2022

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Know About the Cost & Profit of Opening A Chai Kings Franchise

Chai Kings is a Chennai-based tea Franchise Business and is an emerging player in the tea business market. Indians start their morning with a beverage, generally tea or coffee. Thus, a large part of India's beverages and food businesses offer tea. The evergreen tea is the centre of the Chai King’s franchise which serves 15 different tea flavours. Tea in India has grown India with around 460 thousand hectares under cultivation, producing about 1010 mil kgs of blends like Darjeeling and Assam tea leaves. This is followed by Tamil Nadu, which have about 700K hectares and a production of 160 mil kgs of Nilgiri tea. Kerala (with its famous chai kadaas) has 35K hectares of tea cultivation, accounting for 57 mil kgs of Kerala Kadak tea and Karnataka with 2.25K hectares producing around 6.5 mil kgs with its Coorg tea, being the essential tea blends grown in India. Therefore, as per such astounding numbers, starting a Chai Kings franchise has a significant scope of growth and profitability. 

Did you know? India consumed 1.1mil tons of tea in 2020, and with a projected CAGR of 4.2% for 2022-27, the tea consumption is set to hit the 1.40 mil tons of tea consumption.

Why open a Chai Kings Franchise?

  • The tea business in India ranks number one in the consumer market. 
  • Indians consume coffee and tea regularly throughout the day, and about 80% of the local produce is consumed within the country. 
  • The demand for hot tea spikes in winter, but tea is also considered refreshing any time of the day and in any season. 
  • Tea as a business opportunity has been proven by the Chai Kings in the south of India. 
  • With over 40 outlets, the CEO of Chai Kings, Jahabar Sadique, has stated that their franchise operations will soon cover Bangalore, Puducherry, Coimbatore and Hyderabad and expand to 500 stores within the next 5 years. 
  • A large part of the 1mil USD funding by Chennai Angels that was recently raised will be used to strengthen the franchise model, supply-chain management and operational capacity building.’ 

Do you see yourself taking up this profitable opportunity in the chai king’s franchise operations? You will find all the franchise details you need below.

Who owns Chai King?

Chai King was started in 2016 October by two entrepreneurs and Chai Kings owners, namely:

  • Balaji Sadagopan, Co-Founder
  • Jahabar Sadique, CEO and Co-Founder

The enterprising duo’s venture has grown tremendously, and Chennai Angels recently invested USD 1 million in their business which is now available as a franchisee business.

The Chai King story:

  • Chai Kings, founded in 2016 October, was the brainchild of Balaji Sadagopan and Jahabar Sadique. Before growing and setting up their franchisee model, they started with four outlets in Kilpauk, Mount Road, T Nagar, and Anna Nagar. 
  • The chai from the Chai Kings can be enjoyed at their outlets, ordered online, and even offer takeaways in 500ml cardboard flasks. Popular chais are the with/without milk, herbal, ice tea, teas with masala, dum, ginger, Sulaimani, lemon, tulsi, hibiscus, apple, etc. 
  • Chai Kings started as Bon Fresh Foods situated in Medavakkam. Post their first outlet at Kilpauk; they launched two more outlets in barely 15 days. 
  • After quitting their IT jobs, the entrepreneurs wanted to fill the gap of people for a good cup of tea when at work or on the go where people do not have to compromise on hygiene, quality, or freshness. 
  • The Chai King brand uses only fresh ingredients like tea leaves from the Nilgiris, Darjeeling, Assam, etc., tulsi, ginger, cinnamon, etc., which have proven ayurvedic and nutritional properties. 
  • Their service model caters to walk-ins and makes the chai available as a take-away, that too in green cardboard boxes with electric vehicles used for delivery, so the environment does not suffer!

Also Read: How to Start a Wow! Momo Franchise in India?

Business tips for starting a successful Chai Kings Franchise:

The following tips can help you successfully convert ideas into a profitable venture, no matter which franchise, business, or a startup idea you choose.

  • Keep in mind that you leverage your knowledge, background, experience and skills when you start your business venture.
  • Research the idea, demand, market potential, etc. Never be afraid to venture out into something new and fresh. 
  • Plan your budget well and have a creative marketing strategy to ensure your profits increase and the payback period arrives quickly.
  • Check out and calculate your returns on investment and anticipated turnover for each opportunity you choose and have in mind.
  • Several franchise operation ideas like the franchise offers of Chai Sutta Bar, Cafe Coffee Day, etc., are good to compare before you startup.
  • If in doubt, research it and use professional help and mentors whenever and wherever needed.
  • Put your necessary licensing and permits in place and ensure your accounts are properly maintained.
  • Use mechanization and technology to quicken your processes and an app like Khatabook to help you stay abreast of the latest news in businesses.
  • GST registration is mandatory. Make sure your accounting and banking are accurate up to date to save yourself from financial problems later.
  • Learning never stops, and gaining experience is an ongoing process that you can safely do in franchise offers. Engage in online courses, certified training institutes, etc., where you can upskill and add value to your business. 

Chai Kings franchise details:

A franchise operation is considered safe. The entrepreneur invests in a well-known brand with an established market, thereby reducing the risk of failures and with ambitions of earning a sizeable profit as a Return on investment (ROI). You can know the step-by-step guideline for opening a Chai Kings Franchise by directly contacting the business at info@chaikings.com.

Given below are all details you will need to invest in the Chai Kings opportunity. Let’s take a quick look.

Investment: 

Chai Kings franchise operators require a solid financial backup. You need a Chai Kings investment of ₹8 to ₹20 lakh.

Experience:

The person running the business or the entrepreneur will need the following experience. 

  • A few years of experience in the food services industry through the franchise agreement provides support and training.
  • Need to be an experienced company or owner to run the day-to-day business operations efficiently.

Location and area details:

Starting the tea café business, the beverages and food sections need a commercial area with many footfalls. The area required is from 400 to 2,000 sq. ft close to a railway or bus station, educational institution or shopping high street. You need not own the place but can rent commercial space reasonably. The rent depends on the location and you can expect an investment of ₹20 to ₹50 lakhs.

Also Read: How to Start The Naturals Ice Cream Franchise?

What is the Franchise fee of Chai Kings?

For any Indian location, the Chai King Café franchise cost can run to about  ₹15 lakhs. Though the average cost may vary, the anticipated franchise cost can range between ₹15 to 20 lakhs. The cost of franchise operations and details of Chai King's offer is given below:

Particulars

Investment

Commercial space 

400 to 800 sq. ft minimum

Equipment and machinery

₹3 lakhs

Furniture and décor of interiors

₹5 lakhs

Raw materials initial investment

₹2 lakhs

Franchise Fee

Not disclosed except to franchisee and expected to be in the range of ₹5-6 lakh

Total investment

₹15 lakhs

ROI 

108%

Payback period

7 to 10 months

Royalty fee

Generally, 2% of turnover

Term of agreement

Normally for 5 years

Official website

https://chaikings.com/

Contact details

Call for details on 044 4285 7272

Email Address: info@chaikings.com

Headquarters

Bon Fresh Foods,#47, Jamal’s Palazza on Medavakkam High Road, Keel Kattalai of Chennai 600117.

Address for communication

264, Velachery Rd, Jayasamy Nagar, East Tambaram, Tambaram, Chennai, Tamil Nadu 600059

What to expect as a Chai King franchisee?

You can expect all the below and more from the Chai King franchise agreement.

  • A safe and inspiring learning experience from a successful venture.
  • Chai King’s profit margins range from 35% to 40%, or you can easily earn around ₹90K per month.
  • Your working capital can range from ₹1.5 to ₹2 lakhs and is required to pay rent, salaries, running expenses, bills, etc.
  • Raw material/food costs are around 32% to 35% of the turnover. The expected turnover per outlet is in the range of ₹10 to ₹30 lakhs
  • Chai King will supply the important raw materials, equipment, technology and interior layouts. 
  • Workforce requirement is of 3 to 5 persons and needs personal involvement of the franchisee.
  • Tie up with an online delivery partner using emission-free bikes as per Chai King's business model.
  • Chai King will also provide marketing, sales support, the approved Chai King Menu and staff training.
  • The outlet's Chai King layouts and design are provided under the franchise agreement and are required to ensure the same ambience and feel for the customer.

Also Read: Complete Guide To Starting A Barbeque Nation Franchise

Conclusion:

The success story of Chai Kings has moved up through hard work, foresight and excellent profitable franchise operations. The many lessons one needs to and can learn are aplenty. Chai Kings now offer the scope of franchise opportunity, which is a significant advantage for starting a franchise business because of its established brand name. The offer is exciting, profitable and very attractive. The business ideas brought out above should help in every business venture and are garnered from many successful entrepreneurs' experiences. Once you start up, be prepared for the many teething problems of accounting, employee management, GST filing, and more to deal with. 

Do you have issues with payment management and GST? Install the Khatabook app, a friend-in-need and one-stop solution for all issues related to income-tax or GST filing, employee management and more. Try it today!

FAQs

Q: How much is the turnover of a Chai Kings franchisee outlet?

Ans:

The franchise outlets report a turnover of ₹10 to 12 lakh per store. The Chai Kings brand sells an average of 25,000 cups each day, with ginger tea being the most popular item on the menu.

Q: When did Chai Kings start?

Ans:

Chai Kings, founded in 2016 October, was the brainchild of Balaji Sadagopan and Jahabar Sadique. They started with 4 outlets in Kilpauk, Mount Road, T Nagar, and Anna Nagar before growing and setting up their franchisee model.

Q: How many Chai King outlets are there?

Ans:

Chai Kings from Chennai started in Kilpauk and quickly grew to four outlets in Kilpauk, Mount Road, T Nagar, and Anna Nagar before growing and setting up their franchisee model. Their quality is excellent, and their 15 flavours of tea can also be enjoyed with noodles, toast, samosas, buns, sandwiches, puffs, coffee, cookies, etc., at affordable prices. Their growth has encouraged them to offer franchise operations. At present they run 40 outlets and hope to have at least 500 more in the next 5 years

Q: Who are Chai Kings’ investors?

Ans:

Angel Investment Group and Chennai Angels are the main investors in Chai Kings.

Q: How is the fresh Chai delivered to the customer?

Ans:

Chai King uses a disposable flask that can keep your tea hot for 30 to 40 minutes. The flask itself has an Aluminium spout-type bag woven between layers of food-grade LDPE. This core is placed inside a corrugated cardboard box that insulates the flask during its delivery. This delivery method has seen the customer base of Chai Kings improve tremendously.

Q: What is the approximate cost of the Chai King outlet project?

Ans:

The franchise fee is reasonable and does not require a very high investment. However, commercial space and its rent can vary wildly across locations. A great location means maximising the footfalls and profit. Besides, running expenses, working capital requirements, etc., contribute to the overall project cost. Hence, a fair expectation is ₹8 to 15 lakh depending on the city, location, and more.

Q: Does Chai Kings offer franchise opportunities?

Ans:

Yes. The franchisee offer can be referred to on the Chai Kings official website.

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The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.

Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.