How to start a franchise business in India: a step-by-step guide
By CA Shrenuj Jalan · · 5 min read
From deciding your budget to signing the agreement and opening the outlet — the practical sequence for taking a franchise in India, and the checks worth doing at each stage.
Taking a franchise is a sequence, not a single decision. Working through it in order costs you a few weeks. Skipping steps costs considerably more.
Step 1: Fix your budget honestly
Decide the number you can invest without borrowing against the roof over your head, then hold back roughly six months of running costs on top of it. The figure you shortlist brands against is what remains, not the total.
Step 2: Choose a category before you choose a brand
Food, retail, education, services and wellness behave very differently. Food has high footfall sensitivity and daily wastage. Education has long sales cycles and seasonal admissions. Services can start small but depend on your ability to hire and retain skilled staff. Pick the operating rhythm you can live with for the length of the agreement.
Step 3: Shortlist and compare on the same fields
Compare investment range, franchise fee, royalty, area required, term and payback range across brands — not marketing claims. On this site, every opportunity states those fields in one format so a comparison is possible in minutes rather than weeks.
Step 4: Check the territory
Ask what territory you get and whether it is exclusive. Ask what stops the brand opening a second outlet two kilometres away, or selling the same products online into your area. Get the boundary written into the agreement as a map or a pin code list, not as a city name.
Step 5: Talk to existing franchisees
Ask the franchisor for a list of current franchisees and call several of them yourself — including one who has been operating for more than two years, and, if you can find one, someone who exited. Ask about support after opening, supply reliability, and whether the original numbers held.
Step 6: Do the site work
Rent is the cost that quietly decides profitability. Visit the site on a weekday evening and a weekend. Count footfall yourself. Check parking, visibility from the road, and what the neighbouring shops are. Confirm the landlord will permit the signage, the electrical load and, for food, the exhaust the brand requires.
Step 7: Read the agreement with a professional
Term, renewal, royalty basis, territory, supply obligations, exit and transfer clauses. Never sign a document you have only skimmed, and never accept "this is our standard agreement, nobody changes it" as a reason not to read it.
Step 8: Licences and registrations
Depending on category and state, you will typically need GST registration, a trade licence, a shop and establishment registration, an FSSAI licence for food, and fire clearance for larger premises. Start these early; they are usually the reason an opening slips.
Step 9: Training and pre-opening
Use the training period to learn the reporting systems, not just the product. Hire your team before fit-out finishes so they can train during it.
Step 10: Open, then measure weekly
Track daily sales, cost of goods, labour and rent as a percentage of revenue from the first week. A franchise that is drifting shows it in the ratios long before it shows in the bank balance.