How to Get a Starbucks Franchise in India

Starting a Starbucks franchise in India offers a unique opportunity to be part of a globally recognised brand in the rapidly growing coffee industry. 

However, opening such a franchise requires a clear understanding of the business model, associated costs, and the steps you need to take. This guide will walk you through everything you need to know.

Founded in 1971 in Seattle, USA, Starbucks has become one of the most popular coffeehouse brands worldwide. It’s known for offering premium coffee, unique beverages, and a relaxed café experience. In 2012, Starbucks entered India through a partnership with Tata Global Beverages. Since then, it has grown to become a household name, offering a variety of drinks and food options to cater to Indian tastes.

Starbucks is famous for its range of coffee and non-coffee beverages. Here are some of the most popular items from the menu:

• Espresso – A concentrated coffee served black

• Cappuccino – Espresso with steamed milk and a layer of foam

• Latte – Espresso combined with steamed milk

• Frappuccino – A blended ice drink, often with coffee or cream-based flavour

• Iced Teas – Refreshing chilled teas in various flavours

• Cold Brew – Coffee steeped in cold water for an extended period

• Pastries and Snacks – Muffins, cookies, and sandwiches

• Specialty Drinks – Seasonal offerings, including unique combinations tailored to local preferences

This menu ensures that Starbucks caters to a wide range of customers, from coffee lovers to those who prefer tea or snacks.

Starbucks operates on a combination of company-owned stores and franchise outlets, with the latter being an attractive option for investors. The franchise model is particularly popular as it allows you to leverage Starbucks' established global brand and proven operational systems.

In India, Starbucks operates through a joint venture with Tata Global Beverages. This means that while you can own and operate a franchise, the overall business relationship remains within the framework set by both Starbucks and Tata. 

The business model focuses on providing a consistent customer experience across all outlets, maintaining high standards of quality, and ensuring that all franchisees follow the brand’s operational procedures.

Key aspects of the Starbucks business model include:

• Global Brand Recognition

Starbucks provides franchisees with access to a well-established, highly recognised brand that attracts customers worldwide

• Operational Support

From staff training to marketing resources, Starbucks offers significant support to ensure franchisees can run their stores smoothly

• Exclusive Products

As a franchisee, you’ll only be allowed to sell Starbucks products, ensuring consistency across all stores

• Franchise Agreement

The franchise agreement sets clear expectations and obligations for both parties, including royalty fees and operational standards

A Starbucks franchise offers several benefits that can make it an attractive investment:

• Brand Power

Starbucks is a well-established global brand with a strong presence and loyal customer base

• Training and Support

Franchisees receive comprehensive training, operational support, and marketing assistance from Starbucks

• Growing Coffee Culture in India

India’s coffee culture is expanding, and Starbucks is at the forefront of this growth, offering an exciting opportunity for investment

• High-quality Offerings

Starbucks ensures that all products meet high standards, which helps maintain a loyal customer base

The cost of opening a Starbucks franchise in India can vary depending on the store’s location and size. On average, the initial investment is between ₹80 Lakhs to ₹1.5 Crores. Here’s a breakdown of the costs involved:

• Franchise Fee: ₹25 Lakhs to ₹50 Lakhs

• Royalty Fees: 5% to 8% of total sales

• Initial Investment: ₹80 Lakhs to ₹1.5 Crores, which covers the setup costs, location, equipment, and other expenses.

When it comes to return on investment (ROI), the typical break-even period for Starbucks franchisees in India is between 2 to 3 years, depending on location and business volume. Profits are expected to rise steadily after the initial years.

To apply for a Starbucks franchise, you need to meet certain eligibility criteria:

• Financial Capability

You should have a strong financial background and the capacity to invest the required amount

• Business Experience

Previous experience in the food and beverage industry is preferred, though not mandatory

• Commitment

Starbucks looks for franchisees who are committed to upholding the brand’s high standards and who are willing to manage the operations diligently

• Location

The location you choose should have high foot traffic, such as in shopping malls, business districts, or near universities

The following documents are needed when applying for a Starbucks franchise:

• Identity Proof

A government-issued ID such as PAN card or passport

• Financial Documents

Bank statements, financial records, and proof of income

• Business Experience

Details about any previous business ventures

• Lease or Ownership Documents

Proof of ownership or lease agreement for the proposed franchise location

• Proposal for Location

Market research and an explanation of why the proposed site is suitable for a Starbucks outlet

Ensure that all documents are accurate and properly verified to avoid any delays in processing your application.

The process to apply for a Starbucks franchise in India is straightforward, and here are the key steps:

1. Research and Understand

First, gather information about the Starbucks franchise model, including fees, Starbucks franchise cost, and operations

2. Contact Starbucks

Reach out to Starbucks through their website or Tata Starbucks to obtain the franchise application form

3. Submit Your Application

Fill out the application form and submit it with the required documnts

4. Evaluation and Location Visit

Starbucks will assess your application and may visit the proposed location to evaluate its suitability

5.Sign the Franchise Agreement

If your application is accepted, you’ll sign an agreement that outlines terms, fees, and other obligations

6. Set Up the Store

Starbucks will guide you through the store setup process, from interior design to equipment installation

7. Training and Launch

Once the store is ready, you’ll attend training, and then you can launch the store

Financing your Starbucks franchise can be done in several ways:

• Personal Savings

Using your own savings for the initial investment is the simplest way to fund the franchise

• Investors

If you lack sufficient funds, you can look for private investors or venture capital

• Business Loans

Many financial institutions, including banks and non-banking financial companies (NBFCs), offer business loans specifically designed for franchise businesses. These loans can provide the necessary capital to cover the initial setup costs. 

Business loans for franchisees often come with flexible repayment terms and competitive interest rates, making them an attractive option for new franchise owners.

Carefully review your options to choose the best financing solution for your situation.

The profitability of a Starbucks franchise depends on several factors, such as location, customer traffic, and operational efficiency. On average, a Starbucks franchise in India can expect a profit margin of about 15-20%, after accounting for Starbucks franchise price, including operational costs and royalties. High-traffic locations generally result in better returns, and franchisees can expect to break even within 2 to 3 years.

Opening a Starbucks franchise in India can be an exciting business opportunity, offering the benefits of a well-established brand and a growing coffee culture. However, it requires a significant financial commitment and an understanding of the operational aspects of running a successful Starbucks outlet. If you meet the eligibility criteria and are willing to invest in the franchise, it can lead to a profitable venture.