written by | March 15, 2022

Establishing a Tea House Franchise in India

Tea House is an emerging company in the food and beverage industry sector. It is one of the largest tea chain franchises in India. Tea house Franchise differs from others by providing unique and authentic ingredients, allowing customers to leave with a happy face. We will learn about costs and profit margin for the tea business. We will also explore the requirements for a tea house franchise. In India, the tea business is profitable and self-rewarding. There is no fixed tea time for anyone to drink tea in India. Therefore, with the increasing demands and the low-cost model, tea shops tend to give a higher profit margin. Depending on your investment capability, you can open a small tea stall or a franchise. The tea house franchise in India is also a popular business. It has high-profit margins and does not require a very high investment.

The minimum cost of opening a tea shop requires around 30 lakhs cash in hand, especially in metropolitan cities. It also depends upon the infrastructure and the rent of the building. Let us learn how to earn profits by investing in the tea house franchise. Opening a tea house is more costly than investing in a tea house. Let us learn the profit margin of the tea business in India to understand it briefly.

Did you know? The Tea House Franchise in India Tea House is one of the largest tea chain franchises in India!

Also Read: Setting Up A Tea House Franchise In India: How to Set Up A Tea House Franchise?

Key Requirements to Set Up a  Tea House Franchise in India

A tea business can be a small stall or even a franchise. It depends upon the amount of investment you are capable of making. A tea stall business needs around ₹ 50,000 for a startup. However, if you are planning to establish your own tea house or a bar, you will require a minimum cost of ₹ 30 lakhs for good infrastructure and rental for the tea house franchise. The tea house franchise is a company that provides good returns with nominal investments. It does not have too many requirements to get started. Some of the key considerations for making investments in a tea house franchise in India include:

Investment costs

A tea house franchise costs around ₹600,000 – 10,00,000. These costs are allocated as follows:

1.     Franchise Fees: ₹ 3.35 lakhs

2.     Shop Cost: ₹ 2-5 lakhs

3.     Products and other costs: ₹ 1-2 lakhs

Thus, the minimum cost required for opening a tea house franchise is approximate. It is important to note that the franchise fees are non- refundable. 

Commercial space

  • You need to have commercial premises of at least 100-150 sq ft to set up a tea house franchise. The ideal space would be 150 sq. ft as it allows for more space and reduces congestion.
  • Setting up a tea house franchise does not require any experience. The tea house franchise welcomes dynamic freshers as well. You do not have to be a seasoned business person to qualify for the same,
  • The brand provides training to the employees of the franchise with training at no extra cost. This training stretches across three days. However, any extra costs especially e.g. a chef’s travelling expenses will have to be borne by the franchise owners. 
  • You need to employ at least two employees. The number can be gradually increased according to the franchise owners' requirements and the outlet's requirements.
  • The service agreement for a tea house franchise is 5 years. You can extend your contract at the end of the term by paying the parent company 10% of the franchise fees.

Profit Margin to Expect After Setting up a Franchise

The cost of a cup of tea varies from ₹3 - ₹ 5 with street vendors and stretches to almost ₹ 90 at high-end restaurants, and hotels. With regards to a franchise, if you sell a cup of tea for ₹10-20, you are bound to enjoy a profit of ₹15. The prices are normally higher in the case of a tea bar where the profit margins are higher than what one earns from selling tea at a street stall. The infrastructure and the environment add to the profitability of a tea house/bar. The profit margin in the tea business varies according to the type of location and staff. It is to provide better maintenance and increase employability. The tea business profit margin depends upon the model you are planning to invest in. A tea stall business does not give high profit since it is unpredictable and does not give high margins. The basic cost is seen to calculate the profit margins. While a high-end model returns a higher profit margin, we also need to add the overhead cost for calculating the net profit.

In a tea bar business model, you can get a higher gross profit margin than a tea stall. This is because we can add various types of drinks and snacks to the menu. The overhead costs are also taken into consideration while calculating the profits. A tea house franchise profit margin for every year is around 40% to 80%. The daily sale for the tea business is around ₹5000 to ₹30,000 per day. Therefore, it is beneficial to invest in a tea house franchise. Let us understand why the tea house franchise in India is the best opportunity in the food and beverage industry sector.

Also Read: Insightful Guide About Franchise Business In India

What Makes the Tea House Franchise One of the Best Opportunities in India?

Tea is one of the most consumed beverages across India. It is already a highly profitable industry in India. The tea house franchise allows running an affordable and easy business. It has good returns on the investment. Tea house aims to reach all tea lovers in India and is committed to collaborating with small businesses to promote them. The tea house menu provides you with various options to choose from. It provides you with different varieties of flavoured tea as well as a variety of shakes and coffees. The wide variety tends to attract a large number of diverse tea lovers. 

Tea house also employs brand ambassadors to promote tea culture and help customers have a premium experience of drinking coolers and shakes. Tea is an indispensable beverage that is consumed throughout the day by almost everyone. This has increased the demand for tea house franchises in urban areas. If you want to start a business, the tea house franchise is a good option. This is because they are committed to collaborating with capable people to expand the tea house chains. The tea house chains are the largest in India. They have the vision to expand the taste of tea and their services to all parts of India. In India, there are tea lovers everywhere, but not everyone can provide the comforting taste of tea. 

Tea house franchises can also collaborate with offices to provide staff with a menu of the tea house franchise, which includes a variety of teas, coolers, and shakes. It also provides them with snacks which makes the productivity of the workers better. They believe in building a strong foundation necessary for building strong franchises. People who have collaborated with tea house franchises have been very satisfied and are gaining good profit margins with a low investment plan.

Conclusion:

The tea business is very profitable in India. Tea house Franchise is one of the most popular tea houses in India. The profit margin of a tea house franchise is around 40%-80%. The tea house provides the customers with various teas, coffees and shakes on their menu. Many teas such as ginger tea and bellam tea, which are beneficial for health, attract many customers. Tea stalls also have a good profit, but it cannot be compared with the profit we earn from being a part of a franchise or a bar. Hoping this can help you understand more about the business of the tea house franchise. Follow Khatabook for the latest updates, news blogs, and articles related to micro, small and medium businesses (MSMEs), business tips, income tax, GST, salary, and accounting.

FAQs

Q: What is the profit of a tea stall business?

Ans:

A tea stall business can be started with an investment of INR 50,000. In this, we can expect 100% profit from the teacup we sell. In this type of business, the overhead cost is low, so the profit depends on the number of customers who drink tea at that stall.

Q: What is Bellam tea?

Ans:

Bellam tea is a tea that uses jaggery as a sweetener instead of using sugar. It is a comforting tea that often reminds people about their grandparents and childhood memories.

Q: What is the area required for the Tea house franchise?

Ans:

A Tea House Franchise requires around 100 sq. ft of space. But the ideal space for opening a tea house would be 150 sq. ft. of space.

Q: Is it profitable to establish a Tea House franchise?

Ans:

Yes. The Tea House franchise is a profitable business in India. The tea house franchise provides one of the best profits in the industry. The daily sales for the tea house franchise are around ₹5000 to ₹30000 in India. The profit margins depend upon your marketing efforts and customer satisfaction.

Q: How does one apply for the Tea House franchise in India?

Ans:

The process to apply for a tea house franchise is very easy. All you need to do is fill out a form on the website of Tea house. You can also contact them with the contact details provided on the website for the tea house.

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