Over the past decade, you might have observed an increase in the number of outlets of famous brands like KFCs, McDonald’s, etc. Have you wondered why it is so? Because it is a profitable business! This sort of business is called Franchise. Franchising is a popular business model that allows for the expansion and growth of a business. In this article, you will come across the 10 most profitable business franchises in India.
What is a Business Franchise?
Before getting acquainted with the list of profitable franchises in India, let’s look at some basics. A business franchise is a type of contractual relationship. It is a business arrangement between two parties-
- Franchisor– It is the parent company that grants the rights and licenses to the franchisee.
- Franchisee– It is the partnered party that uses the franchisor’s brand name, business model, as well as intellectual property to operate a business.
For this, the franchisee pays a royalty fee to the franchisor in exchange for the right to use the franchisor’s brand, systems, and support. The franchisor provides support, training, and ongoing assistance to the franchisee.
Thus, the franchisee operates the business under the brand name and follows the established systems laid out by the franchisor.
A Brief Overview of Profitable Franchises in India
Here is the list of the 10 most profitable business franchises in India-
|Franchise’s Name||Profits made in India (FY22)||Business Line|
|AMUL||Rs.61,000 crore||Indian Dairy Cooperative|
|Hero MotoCorp||Rs.2,329 crore||Automobile Manufacturer|
|McDonald’s||Rs.1,500 crore||Food & Beverage|
|Haldiram||Rs.694 crore||Sweet, snacks, and restaurants|
|Dr Lal Path Labs||Rs.350 crore||Medical Diagnostics|
|Kalyan Jewellers||Rs.224 crore||Jewellery Retailers|
|Domino’s||Rs.132 crore||Food & Beverage|
|KFC||Undisclosed||Food & Beverage|
|VLCC||Undisclosed||Beauty & Wellness|
Details of Profitable Franchises in India
The acronym AMUL stands for “Anand Milk Union Limited.” Almost every Indian must have seen AMUL Parlour at least once in his/her lifetime. Reason? Because AMUL is one of the greatest business franchises in India. Amul Parlous are the outlets of AMUL in which you can sell the products of AMUL. It earned a humungous profit of Rs.61000 crore in India in the financial year 2022.
The profit margin on Amul products is-
- Pouch Milk– 2.5%
- Ice Cream– 20%
- Milk Products– 10%
- Recipe-based Categories (Ice-cream scoops, baked pizza, sandwiches, etc.)- 50%
Requirements to begin Amul Franchise-
- Area Plan: 100- 300 sq. feet.
- Investment: Rs.5-15 lakhs
- Personal information & verified documents
- Address of the locality
2. Hero MotoCorp
Established as an independent company in 2010, Hero MotoCorp still holds the title of “leading motorcycle manufacturer in India.” It has a strong presence in the Indian market due to its profitable franchises in India.
The margins of profit vary from one region to another. Although the company will provide an average profit of 8%-10% it depends on the models. However, the net profit on spare parts is 20% to 25% on MRP.
- Area: 3000-4000 sq. feet
- Investment cost: Rs.50 lakhs to 1.5 crore
McDonald’s is a global fast-food franchise that has a strong presence throughout the cities and towns of India. Do you know when it was first opened in India? In the year 1996. Since it held a strong foothold in our country. The profit margins depend on the sale of products.
Also, its franchise fee varies on the type of outlet as well as the location. The franchise fee of McDonald’s is approximately Rs.30 Lakhs.
The master franchise rights for McDonald’s in India are held by-
- Hardcastle Restaurants Private Limited (HRPL): In South and West India
- Connaught Plaza Restaurants Private Limited (CPRL): In North and East India
The Indian conglomerate, Patanjali has over 5000 franchises in India. The retailers of the Patanjali franchise state that their daily revenues cross Rs.25000. They earn 15% gross profit margins on all the products of Patanjali.
Requirements to open Patanjali franchise-
- Shop area: 300-2000 sq feet
- Security Deposit: Rs.5 lakhs (refundable)
- Location: Tier I cities with prime locations or main market
It is the world’s no.1 Indian brand in the segments of Indian sweets, snacks, and restaurants. It has over 50 outlets in India. The profit percentage of the Haldiram’s franchise is 14%.
Requirements to open Haldiram’s franchise-
- Franchise fee: 5 lakhs + GST (non-refundable)
- Security deposit: 1 Lakh (refundable)
- Area required: 400-1000 sq ft
- Location: Prime Location in the city
- Franchise tenure: 5 years
- Franchise lock period: 2 years
6. Dr. Lal Path Labs
Pathology is an integral part of the healthcare sector. Dr. Lal Path Labs franchise has the strongest foothold in the pathology franchise in India. It is a well-known name in India’s diagnostic and healthcare services industry. This franchise offers a profit margin of 25-30%.
However, in this category, the requirements are different as compared to others.
The requirements are-
- Experienced and qualified pathology lab technician.
- Qualified lab assistants with prior lab experience.
- Well-versed in medical software.
- Qualified lab technicians
- Cleaning staff
7. Kalyan Jewellers
It has captured the spotlight of premium gold ornaments in India. It is majorly known for handcrafted jewelry of precious metals. It is one of the most profitable franchises in India in the segment of jewelry. The profit margin of this franchise is 12-20%.
You need to fulfill the following requirements to open the franchise of Kalyan Jewellers-
- Area: 2000 to 5000 sq. feet.
- Initial investment: Rs.20-30 crore
- Franchise fee: Rs.30-50 lakhs
- Initial Inventory: Rs.20-30 crore
- Agreement Period: 10 years
What is the first thing that hits your mind whenever you hear the term “Pizza”? Domino’s Pizza! Domino’s is the prime company that spread the so-called “Pizza Wave” in India. It has over 1400 outlets pan India. Its profit margin is 20%. Domino’s delivery service was available even before Swiggy or Zomato.
Its requirements are-
- Area: 350 sq. feet (out of which 150 sq feet is allotted for the kitchen)
- Machinery and Equipment cost: Rs.20 lakh
- Other Expenditure: Rs.10 Lakhs
- Location: Tier 1 or Tier 2 cities
The other expenditure includes the following-
It stands for Kentucky Fried Chicken. As of today, KFC has more than 400 outlets in India. Although it has not disclosed the profits it made in India. But still, it is one of the most anticipated franchises in the segment of food and beverages. Its profit margin is 10% to 20%. But you will gain more profits because of the rising popularity of fried kitchens.
The requirements are-
- Area: 1000-1500 sq feet
- Initial investment: Rs.1-1.5 crores
- Franchise fee: Rs.15 lakh + GST
- Equipment & machinery: 40 lakhs
The acronym VLCC stands for “Vandana Luthra Curls and Curves.” This beauty and wellness products company was founded by Vandana Luthra in 1989. It provides a 14% profit margin. However, the requirements vary on the type of franchise.
The requirements are described in the following table-
|Requirements||VLCC Salon||VLCC Slimming Center||VLCC Slimming, Beauty, & Fitness Center|
|Area||800-1000 Sq. Ft||1100-1250 Sq. Ft||1800-2200 Sq. Ft|
|Franchise fee||Rs.6-8 lakhs||Rs.6-8 lakhs||6-8 lakhs|
|Equipment fee||Rs.5-7 lakhs||Rs.10-11 lakhs||18-20 lakhs|
|Training Cost||Rs.50,000 to 1 lakh||Rs.1 lakh||Rs.1 lakh|
|Total Investment||Rs.28 lakhs||Rs.35 lakhs||Rs.60-62 lakhs|
By now, you must have understood that you need a significant amount of money, an area, and a prime location to open a franchise. Irrespective of the requirements, you can’t deny the fact that it provides immense benefits to both franchisors and franchisees. The profitable business franchises in India allow rapid expansion of the brands. But you need to prepare yourself to undertake the responsibilities and risks of the franchise system. Conduct proper due diligence before entering into a franchise relationship.