Tea Day Franchise : Kerala, with its tea-loving population, high literacy, and strong café culture, presents promising opportunities for tea and beverage franchises. Among the rising names in India’s tea café franchise sector is Tea Day—a modern tea-coffee brand that has rapidly expanded across many states with multiple formats, diversified menus, strong brand support, and attractive returns. For entrepreneurs in Kerala considering franchise investment, Tea Day offers several compelling benefits, but also challenges and operational demands that must be understood carefully.
Table of Contents
This Comprehensive guide explores everything you need to know about starting a Tea Day franchise in Kerala: investment and infrastructure requirements, revenue and cost structure, expected profit margins, ROI or break-even period, business and legal obligations, site selection, and success strategies. By the end, you will have a clear, realistic understanding of whether a Tea Day franchise is a good fit in your city or town.
1. Overview of Tea Day Brand
Tea Day launched in India in recent years and has since scaled rapidly. The brand positions itself as a modern tea and coffee café chain offering not just traditional tea, but flavored varieties, milkshakes, snacks, quick bites, and café-style ambience. Its USP (unique selling proposition) includes:
- Affordable pricing / pocket-friendly menu combined with a trendy café experience.
- Broad menu options including teas, coffees, milkshakes, snacks, often customizable to local tastes.
- Multiple formats: small units, kiosks, standard café/outlet models, and café models in commercial or high-footfall areas.
- Brand support in training, interiors, branding, operations, and supplier coordination.
- Promised fast ROI / payback periods in many cases (6-12 months in many outlets under favorable conditions).
These strengths make Tea Day an attractive option, especially in Kerala, where tea is culturally strong, café culture is rising, and consumers are increasingly open to hybrid café + tea + snacks model.
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2. Why Kerala Is a Good Market for Tea Day
Before investing, location selection and regional demand are crucial. Kerala offers several advantages:
- Tea Culture & Demand: Tea is deeply embedded in Kerala’s daily lifestyle: morning tea, evening tea, tea with snacks, etc. This gives a strong baseline demand.
- Tourism: Kerala attracts tourists throughout the year. Tourists often look for cafés, snacks, and tea experiences, especially in tourist towns.
- High Literacy & Cafés Trend: Cities like Kochi, Thiruvananthapuram, Kozhikode, Kannur, Thrissur have educated populations, working professionals, students—groups likely to patronize café style brands.
- Availability of Retail Spaces in Commercial Zones: There are many shopping areas, malls, college campuses, hospitals, and commercial corridors that provide good retail frontage or kiosk possibilities.
- Disposable Income Growth & Eating Out Trends: More households are spending on outside beverages and snacks, café outings, social meetups.
However, Kerala also offers certain challenges:
- Real estate or rent may be higher in tourist or commercial zones.
- Operational costs (staff, utilities) may vary.
- Consumer tastes may lean toward local flavors—menu adaptation is essential.
3. Tea Day Franchise Models & Formats
Tea Day offers several franchise/outlet models. Depending on investment capacity, expected sales volume, and location, you can choose among:
| Model | Typical Size / Space Requirement | Ideal Locations | Key Features |
|---|---|---|---|
| Unit / Small Outlet / Shop | ~100-200 sq. ft | Near bus stops, colleges, hospitals, commercial streets | Lower cost, simpler interiors, quick service, takeaway focused |
| Café Model / Larger Outlet | ~300-500 sq. ft | Shopping malls, busy commercial roads, near offices and high footfall zones | Seating, more elaborate décor, more menu variety, higher customer dwell time |
| Corporate Model / Kiosk in MNCs | Dedicated to workplaces, inside complexes, smaller footprints | Business parks, large offices, corporate campuses | Tailored menu, possibly restricted hours, high volume during breaks |
These formats differ in required investment, potential sales, overhead costs, staffing, and expected returns.
4. Investment & Setup Costs
To begin a Tea Day franchise in Kerala, understanding the initial capital investment, recurring costs, and sunk costs are essential. Below are typical expenditure heads and approximate ranges (figures are indicative and will vary depending on the city, locality, rent, and other factors).
| Expenditure Head | Approximate Range (INR) | Notes / What It Includes |
|---|---|---|
| Franchise Fee / One-Time Joining Fee | ~ ₹ 1,00,000 – ₹ 2,00,000 | Helps secure the brand rights, initial training, signage, initial support |
| Infra / Interior Setup | ~ ₹ 2,00,000 – ₹ 5,00,000 or more | Flooring, lighting, furniture, décor, counters, kitchen setup, display boards |
| Equipment & Kitchen Implements | Part of interior cost or separately ₹ 1,00,000-₹ 2,00,000 | Tea brewers, blenders, freezers, storage, burners, utensils etc. |
| Initial Raw Material & Inventory | ~ ₹ 10,000-₹ 50,000 depending on volume | Tea leaves, milk, snacks, packaging, consumables etc. |
| Licensing, Permits, Legal Costs | Varies, but moderate | Food safety license, local shop license, GST registration, municipal compliances etc. |
| Working Capital (first 3-6 months) | Enough to cover staff salaries, utilities, inventory replenishment, marketing | Essential to have buffer since initial months may have lower sales |
Putting this together, for a small outlet / shop (100-200 sq.ft) format in Kerala, initial investment is likely to fall in the ₹3-7 Lakhs range, depending on location. For larger café formats, mall outlets, or premium areas, the investment could run higher.
5. Expected Revenue, Sales & Profit Margins
Based on Tea Day’s publicly stated performance metrics across India, and similar franchise-reporting platforms, the following ranges are typical:
| Format | Expected Monthly Sales / Revenue | Net Profit Margin (After Costs) | ROI / Break-Even Period |
|---|---|---|---|
| Small outlet / shop (100-200 sq.ft) | ~ ₹2,50,000 – ₹5,00,000 per month in good location | After costs maybe 15-25% depending on cost control, rent, staff etc. | 6-9 months under favorable conditions |
| Café / bigger outlet (300-500 sq.ft) | ~ ₹4,00,000 – ₹6,00,000 per month or higher | Slightly lower margin % due to higher rent and staff costs, but absolute profits higher | 8-11 months or more depending on footfall and overheads |
| Corporate / kiosk in business parks etc. | Daily sales may vary, but consistent volume during office hours can boost revenue | Profits depend on rental cost, hours, staff size; margins still decent if fixed costs controlled | 9-18 months, sometimes longer if location lease/rent is high |
Tea Day also claims very high margins on many menu items (some items margin can be 60-100%), and minimal wastage (less than 1%) in efficient stores. These help boost profitability if operations are managed well.
6. Revenue Sharing, Royalties & Contract Terms
When you join a franchise, understanding how revenue (or profit) is shared, what royalties (if any) apply, and the duration/tenure of the agreement is critical.
Key points from Tea Day’s publicly stated model and franchise-info sources:
- The franchisee generally retains very high percentage of sales revenue. Some sources say ~90-100% of sales, with brand/royalty fees being small (1-10%) depending on model.
- In many Tea Day formats there is no recurring royalty fees or renewal fees overhead (or zero royalty is claimed in some formats), which reduces ongoing burden.
- The franchise agreement duration is often 5 years or more; in many cases, lifetime or long-term agreements are highlighted.
- Tea Day offers shelf of support in site selection, chef training, brand support, which are part of the package.
In sum, the financial burden of recurring royalty of Tea Day seems modest in many cases, making profit retention more favorable for franchisees.
7. Operational Requirements & Infrastructure
To run the business smoothly, there are certain infrastructure and operations you must have in place.
Infrastructure / Physical Requirements
- Retail space of appropriate size, depending on format: 100-200 sq.ft for small shop, 300-500 sq.ft or more for café.
- Basics like plumbing, water supply, drainage, electricity capacity, ventilation.
- Equipment: tea brewers, kettles, storage, refrigeration, utensils, counters, display boards, furniture (for café format), packaging station.
- Signage, POP displays, branding elements.
- Waste management, hygiene tools, cleanliness.
Staffing / Human Resources
- Staff count depends on format. Small outlet may need 2-3 employees; café format more.
- Trained chef / tea maker is provided or training is given by Tea Day in many franchise offers.
- Staff should be trained for consistency, hygiene, customer service, speed.
Operations & Supply Chain
- Raw materials must be consistent quality: tea leaves, milk, flavorings, packaging etc.
- Some supply arranges centralized vendors; franchisee must maintain quality standards.
- Inventory control, purchase planning, wastage reduction are key.
Licensing & Legal Compliance
- Food safety license (FSSAI or equivalent).
- Local shop license, municipal health permit.
- GST registration.
- Fire safety and local safety norms, especially in larger cafés.
8. Selection of Location in Kerala: Key Considerations
Choosing the right location in Kerala will make or break the franchise success.
Important location criteria include:
- Footfall: Areas with high pedestrian traffic—near colleges, hospitals, shopping districts, bus stations.
- Visibility and Accessibility: Corner shops, shops facing main roads, easy access, parking availability, proximity to public transport hubs.
- Rental Cost vs Rent-to-Revenue Ratios: Rent is a major cost. One must ensure that projected revenue supports rent; in small towns the rent may be lower, but footfall and purchasing power also lower.
- Demographics and Customer Profile: Location with student population, office workers, café culture, young crowd tends to perform well. In Kerala, areas near educational institutions, IT parks, tourist zones, residential colonies with young families are good.
- Competition and Saturation: Assess how many tea/coffee shops are nearby, how saturated the market is. Unique menu offerings, ambience, quality, and service matter.
- Operational Support and Utilities: Reliable power supply, water, internet, waste disposal etc., are essential.
9. Support & Training Provided by Tea Day
One of the advantages of joining Tea Day is the support and training ecosystem.
- Franchisees often receive initial training for staff and owners in menu preparation, customer service, hygiene, operations methodology.
- Brand helps with site search / shop search support in many cases.
- Interior design, branding, signage, décor are part of the package or guided by the brand.
- Online systems or POS, billing, inventory management may be part of what franchise provides or enables.
- Marketing and launch support: initial launch promotions, brand identity, social media presence, likely assistance with marketing materials.
10. Revenue & Profit Margin Details
Based on data compiled from multiple Tea Day franchise sources:
- Menu margin: Many menu items have 60-100% margin (markup over cost) depending on how high value or premium the item is.
- Wastage claims are low in efficient stores (less than 1% of menu wastage), which helps improve overall profitability.
- Expected monthly sales vary by outlet type: small outlets might earn ₹2.5-5 lakh per month; café formats higher.
- The cost structure includes rent, staff salaries, raw materials, utilities, packaging, marketing. When all costs managed well, net profits in many cases are healthy.
11. ROI / Break-Even Period & Tenure Expectations
Return on investment (ROI) is a key concern for any franchisee. Tea Day provides projected ROI / break-even periods as follows:
- For small outlets (unit / shop format), the break-even often lies in 6-9 months under favorable conditions (good site, moderate costs, steady footfall).
- For café formats with larger investment and higher fixed costs, break-even may extend to 8-11 months or even up to a year if initial ramp-up is slower.
- Corporate or kiosk in large offices or business parks might have variable ROI depending on hours, demand, lease terms; sometimes longer, maybe 9-18 months.
Tenure: Many franchises come with 5-year terms or more; some models mention lifetime agreements (or long-term agreements) with no renewal fees in certain contexts (though this depends on contract).
12. Challenges & Risks in Tea Day Franchise
Even with strong potential, like all businesses, there are risks and operational challenges to be aware of:
- Rent and Real Estate Costs: Premium locations in Kerala (major cities like Kochi, Thiruvananthapuram, etc.) are expensive. High lease costs can reduce margins.
- Labor & Utility Costs: Salaries, electricity, water, internet, and packaging can eat into profits if not managed efficiently.
- Supply Chain Fluctuations: Cost of raw materials like milk, tea leaves, spices etc. may fluctuate. Quality consistency needs oversight.
- Customer Preferences & Competition: Local taste preferences, competition from local tea shops, street vendors, and café chains. You must ensure quality, hygiene, ambience, and pricing are competitive.
- Regulatory & Licensing Delays: Approval processes, health licenses, local business laws may lead to delays.
- Seasonal Variations: Demand might fluctuate (monsoons, holidays, tourist seasons etc.). Snack & tea demand may drop in certain months.
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Mitigations: choose location wisely; monitor costs; negotiate leases; maintain high quality & hygiene; adapt menu to local tastes; build marketing tie-ups; maintain good customer experience.
13. Tea Day Franchise in Kerala: Specific Local Factors
For Kerala, some specific considerations:
- Monsoon & Climate: Weather impacts footfall—during rainy days, customers may prefer indoor or delivery ordering. Interiors and comfort matter.
- Tourism: Many tea shops near tourist spots may see high business, but seasonality matters.
- Cultural Preferences: Kerala has large vegetarian populations; healthy-tea, herbal teas and lighter snacks might appeal more. Local flavor adaptations (like ginger, cardamom, or coconut-influenced items) may help.
- Regulation & Licensing: Kerala has a strong health regulatory framework; ensure compliance with local municipal & food safety authorities.
- Logistics and Utilities Costs: In rural or semi-urban areas, power cost or water supply may be less stable. Backup power, water filtration may need investment.
14. Steps to Start Tea Day Franchise in Kerala
Here is a suggested step-by-step roadmap for entrepreneurs in Kerala:
- Research Market & Competition
- Survey potential localities: commercial zones, shopping areas, near colleges/hospitals, tourist spots.
- Study existing tea / café players in those areas—their menu, pricing, footfall.
- Decide on Format
- Based on budget, available space, expected customer profile, decide whether to go with small shop, café format, or corporate/kiosk.
- Financial Planning & Budgeting
- Estimate all upfront costs: franchise fee, setup, equipment, licenses.
- Estimate recurring costs: rent, staff, utilities, marketing.
- Ensure you have working capital for at least 3-6 months.
- Select Location / Rent Negotiation
- Secure a lease in a good spot, negotiating rent, lease terms, interior permissions.
- Ensure visibility, accessibility, parking / foot traffic.
- Procure Licenses & Legal Setup
- Register business entity.
- Apply for food safety license, health licenses, municipal permits.
- Ensure compliance with Kerala regulatory norms.
- Finalize Franchise Agreement
- Get all terms in writing: revenue sharing / royalty, contract duration, renewal terms, responsibilities of franchisor, support to be provided.
- Outfitting & Setup
- Interiors, furniture, décor as per brand standards.
- Kitchen setup, equipment procurement.
- Branding, signage, POP materials.
- Staff Hiring and Training
- Hire staff: tea makers, service staff.
- Undergo training provided by the brand on operations, customer service, hygiene.
- Menu Customization & Launch Strategy
- Work with franchise brand to adapt menu to local tastes (if allowed).
- Plan launch promotions—discounts, sampling, posters, digital marketing.
- Operations & Monitoring
- Monitor daily sales, costs, customer feedback.
- Maintain quality and consistency.
- Adjust staffing, inventory orders, menu offerings based on data.
- Marketing & Customer Engagement
- Local marketing: social media, local ads, collaborating with colleges, offices.
- Maintain visibility online (Google Maps, local directories).
- Customer loyalty programs, periodic offers.
15. Case Example / Hypothetical Financial Projection for a Tea Day Outlet in Kerala
Here’s a hypothetical projection for an outlet in a mid-sized city in Kerala (say Kozhikode, Thrissur, or similar). Figures are illustrative but grounded in publicly reported Tea Day numbers plus local adjustments.
| Metric | Assumption | Estimated Value (Monthly) |
|---|---|---|
| Footfall (Customers per day) | 80-120 customers (peak + off-peak) | ~2,400-3,600 customers per month |
| Average Basket Value | ₹75-₹100 per customer | Approx ₹1,80,000-₹3,60,000 gross sales |
| Cost of Goods Sold (COGS) & Raw Materials | ~30-40% of sales | ₹54,000-₹1,44,000 |
| Staff & Labor Costs | Depending on staff size (2-4 people) | ₹20,000-₹60,000 |
| Rent / Lease & Utilities | Varies by location, moderate in medium city | ₹20,000-₹50,000 |
| Marketing & Miscellaneous | Local ads, packaging, social media etc. | ₹5,000-₹15,000 |
| Net Margin After Costs | Could be ~20-25% if well managed | ₹36,000-₹90,000 (or more) |
| Breakeven (Months) | With initial investment ₹4-6 Lakhs | ~6-9 months assuming steady sales |
This projection assumes attendance, customer behavior, cost controls, and local expenses in a mid-urban Kerala location. In higher rent areas, or smaller footfall, margins may compress.
16. Conclusion
Tea Day franchise in Kerala presents a strong opportunity for entrepreneurs who wish to invest in a growing tea and café market with relatively low investment and high growth potential. The brand’s well-defined formats, strong menu, good brand support, and assertive ROI predictions make it a business worth considering.
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However, success will depend greatly on location, cost control, managing operations, and adapting to local tastes and preferences. With the right planning, investment, and effort, a Tea Day outlet in Kerala can become profitable within 6-12 months and yield steady profits thereafter.
If you are in Kerala and have the capital, determination, and willingness to operate in the hospitality/food space, evaluating Tea Day franchise with full due diligence could make for a very promising venture.
Disclaimer : The information provided is for educational purposes only. Investment costs, revenue, and ROI figures are indicative and may vary by location and market conditions. Please conduct independent research and professional consultation before making any financial decisions.
