Chai Franchise vs Coffee Franchise: Which One Works Better in India?

Tea and coffee franchises both offer promising business opportunities, but which one is better suited for the Indian market in 2025? Let’s compare based on consumer trends, costs, and growth potential.

Market Demand:
India is traditionally a tea-drinking nation. Over 80% of the population consumes chai daily. Coffee consumption is growing, especially in urban areas, but still lags behind tea.

Setup Cost:
Tea franchises like Tea Time or Chai Sutta Bar can start from ₹4–6 lakhs, whereas coffee brands like Barista or Café Coffee Day usually require ₹10–20 lakhs. Tea models are more affordable and easier to scale in Tier 2 & 3 cities.

Profit Margins:
Tea franchises enjoy high margins (30–40%) due to low raw material costs. Coffee brands have higher ASP (average selling price) but also higher input and operational costs.

Target Audience:
Chai outlets attract a wider demographic—from students to daily wage workers. Coffee chains focus more on young professionals and urban consumers.

Verdict:
If you want high volume, low-cost entry, and faster ROI, a chai franchise wins. If you prefer premium branding and café culture, a coffee franchise could work better in metros.

Both are profitable—your location and target audience should guide your choice.