Complete Guide to Start a Tea Franchise in India 2023

By Startup Authority December 2

Who Should Start Tea Franchise?

Tea is one of the best drinks when it comes to the Indian market. Yes, drinking tea too many times a day could be harmful to your health. But, that statement is surely not true when it comes to the Indian people. Tea is not only used to start your day but also to welcome people to India.

Currently, many tea companies have captured a good market area. But, in this article, we will be telling you which is the best tea franchise. Additionally, if you are planning to open up a tea franchise which one should you choose and why in the tea business?

Is Tea Business good for the Future?

The tea sector in Asian countries has gained a lot of popularity ever since its establishment. Drinking tea made the Indians believe that it is a healthy and energy drink. Yes, tea is an energy drink but, when it comes to health it might not. Still, people in the market have become huge consumers of tea and its by-products like sugar and milk powder.

The tea sector in India is forever growing. Any company willing to shift their product to tea must do good research and capture the market. Once the market is captured, then there is no going back for them. Now, we can say that the tea business is one of the most promising businesses in India.

For the past ten years, the consumption of tea in India has risen heavily. In a very recent survey, it has been revealed that nearly 1.10 million tonnes of tea were consumed in India in a year. Now, if you are planning to open up a business in such a high-demanded product then facing loss would be a headache.

How to choose the right tea franchise?

Opting for the right tea franchise is very important. The selection for such should be only done after thorough research. When it comes to the Indian market many tea franchises are doing quite well. Still, you must choose the best out of them as per their requirement and your eligibility.

Here are some simple steps that you can follow to choose the right tea franchise:-

Step 1: Choose as per your budget

Budgeting is the first and foremost important step here. You must know what are your budgets and according to that, you must approach tea franchises.

Step 2: Eligibility Criteria

Every franchise has its eligibility criteria to be fulfilled such as location, the area required, royalty fee, and many more. You must have enough of these criteria before thinking of opening a tea franchise.

Step 3: Define your market

Not all tea franchises in India target all audiences. Some franchise targets the young, some old. You should know your market area well and as per that data choose the one that targets such audiences.

Is Tea Franchise Business profitable in India?

Any tea business around the country has seen rapid growth in their business. Interestingly, the Indian tea industry is one of the most famous industries in the country. Most premium tea that is produced in India is exported to many European countries. As a result, the well-reputed franchise earns a good profit in return.

Similarly, small businesses are also earning a good amount of profit by opening up tea franchises. The profit margins in this industry are very high as one could even expect them to be. Additionally, you do not require high investment in such franchises.

Average Profit Margin in Tea Business

The profit margin in any tea business in India has constantly been high. You require less investment money and earn a good profit in return. Some genuine sources have revealed, tea prices in the country change every week so the profit margin will slightly differ but, they are always profitable.

Mostly, every tea business or franchise in the country will make a 75 to 100% profit. That is only possible when they are offering superior-quality tea leaves. If your tea quality is good then that business can expect a net margin of between 10-20%. So, at the end of the day, you could expect a good return from tea franchises or businesses.

Investment in the tea business

As we mentioned earlier, you do not need any high investment just to start a tea business. Now, if you are willing to take a reputed franchise then that could be expensive. The average investment to open up a tea business is only Rs 50,000 only.

You require a good area to sell your tea. Other than that, you require all the raw materials that are required to make tea. Having all these will lead you to invest in a good tea business.

Tea Franchise vs. Own Tea Shop which is Better?

Any business giving you a good profit margin is always the best. At the end of the day, we will only look at the profit margin. Now, opening up a tea franchise could give you a low income in the end because it is commission based.

But, if you open up your tea business then all the income earned will be your profit. So, starting your tea venture is highly profitable.

Pros and Cons of the Tea Business

Every business in the world has its advantage and disadvantage even if they are highly profitable. In the same way, here are some of the :

Pros of starting a tea business

You have unlimited income potential when you open up a tea business.
There is no limitation to it as you have to pay no one.
There will be low maintenance costs when everything is under control.
The working schedule will be flexible if you are the sole proprietor of a tea business.
You can offer unique and amazing perks and discounts

Cons of the tea business

As you are the sole proprietor there is always a high risk.
Due to fixed and less chance of growth, the employees might not be motivated for work.
Your profit margin could go very low that you have never expected it to be.
Other expenses such as taxes, electricity, rent, and many more will be an overload for a single proprietor.