Written By: Gouri Ghosh

More NRIs are investing in India in the year 2026. India's franchise industry is growing annually at 25-30%. If you want a steady income and long-term growth, owning a business often gives you more control than investing in real estate or stocks. This is why many NRIs now choose franchise businesses in India.

Starting a business from scratch can be very risky when you are abroad. You need local knowledge, day-to-day involvement, and time for testing an idea. Franchises bring this risk lower for you. They give you a proven business model, a trusted brand, clear operating systems, and ongoing support. Therefore, the franchise vs. startup investment in India for NRIs clearly favors franchises for faster stability.

This guide will help you to make a correct decision. You will learn about the best franchise business in India for NRI, the cost of franchise investment in India for NRI, and how much return one can realistically expect. We also explain the legal requirements regarding NRIs opening up a franchise in India and show you ways to manage the business from abroad. If you're planning to explore franchise opportunities in India for NRIs in 2026, this guide gives you clarity and confidence.

Indian Franchise Market Overview 

Why Franchise Investment Is Ideal for NRI Investors

Effective Business Model with the Least Risk of Failure  

• You're not investing in an idea; you're not buying a startup.
• Your risk decreases compared to launching a new startup business
• You will get visibility into costs, returns, and timelines 
• This makes franchises one of the best  business opportunities in the whole of India for NRIs
• It is good if you want predictability rather than trying new things
•  

Brand Recognition Within The Indian Market

• Brand Trust is a significant aspect in India, particularly for start-ups.
• Famous brands attract consumers faster
• You'll spend less in terms of initial marketing.
• Customers are more confident when purchasing from well-known brands
• This increases your chances of running a profitable franchise business in India for NRIs
• Strong brands help stabilize revenue early

More Effective Delegation and Remote Control

• It will not affect you to operate a business when you are staying in another country.
• Franchises: SOPs and training procedures available
• You can engage professional local managers
• There are regular reports that assist you in monitoring performance from a distance.
• Suited perfectly for franchises in India for NRIs in the year 2026
• Enables you to remain in control without having to be constantly involved

Faster Break-Even Compared to Independent Businesses

• Timing is important when you invest in a franchise.
• A franchise will break even much quicker than an independently owned business
• Well-established franchises pay back investments between 12 and 36 months
• Faster break-even means quicker cash flow

Semi-passive Income Possibilities for NRIs

• Franchises would be a good option for NRIs who prefer to earn money without being under constant observation.
• Particularly well-suited for the educational, healthcare, and service sectors
• Reduced daily operational engagement after stabilization
• Income generation with structured oversight
• Facilitates wealth generation for the long term in India
• Suitably aligned with the financial intentions of foreign investors

Franchise Expo 2025 Investment Opportunity Snapshot

Most Profitable Franchise Businesses in India for NRIs

As an NRI, if you want to invest in India, it is advisable to concentrate on some business segments that provide proven returns rather than going for some random brands. Some business segments perform extremely well. Here’s a classification regarding the best franchise business in India for NRIs in different sectors:

1. Food & Beverage franchise

Includes: food restaurants, coffee shops, cloud kitchens

• Market size: ₹2.5 lakh crore in 2025
• Organized Chains: 50%+ of F&B Sales
• Expansion in Tier 2 and Tier 3 cities: 30 to 40% of new stores

Why Food Franchises Are Ideal for NRIs:

• Food is a necessity that is always in demand. With the ever-increasing urban population of India going out to dine or ordering in food,
• Your business caters to regular and frequent visitors, who provide you with a direct flow of money
• Recognized brands make marketing easier for you
• Franchisors provide SOPs, supply chains, and training, making remote management possible
• Faster break-even (usually 18–36 months) compared to independent restaurants

2. Education & Training Franchises

Contains: Preschools, coaching centers, skill development institutes

• Size of Indian Education Industry: ₹10 lakh crore
• ROI:25–40%
• Break-even: 18–24 months

Why Education Franchises Are Great for NRIs:

• It is a recession-proof industry. Parents and students continue spending, ensuring predictable revenue.
• This makes cash flow predictable because a certain amount will come in
• Operations can be delegated to trained staff
• Works well with semi-passive management from abroad
• High Growth Potential in Major and Tier 2 Cities

Bottom Line: If you want investments with steady and lasting returns without needing everyday monitoring, then education franchises are the ideal ones for you.

3. Healthcare & Wellness Franchises

Contains: Diagnostic centers, clinics, fitness centers, wellness studios

• Sector growth rate: 15- 18%
• Market size: USD 50 billion by 2025

Why Healthcare & Wellness Franchises is the greatest choice for NRIs:

• Individuals always make investments in health and wellness, making this a recession-proof industry.
• Processes and SOPs make remote management feasible
• Growing awareness of fitness and diagnostics drives demand
• Ideal for semi-passive ownership and long-term wealth

4. Retail and Lifestyle Franchises

Includes: Clothing, electronics, consumer retail goods; Excludes

• Indian retail industry: USD 1.1 trillion by 2027
• ROI: 18–22%
• Break-even: 18–30 months

Why Retail Franchises Work for NRIs:

• The retailing business can perform very well in crowded locations such as malls, business centers, and high streets.
• Known brands can draw in customers faster than lesser-known ones
• Inventory and sales processes are structured, making management simpler
• Capacity for scalability across several outlets
• Strong revenue growth with proper location selection

6. Real Estate & Property Service Franchises

Includes: Property brokerage and consulting; property management

Setup cost: ₹5-20 lakh

Why Real Estate Franchises Are Ideal for NRIs

• You earn through commission, without buying or holding property.
• The local workforce manages the day-to-day tasks; as a result, the remote operations are simple.
• Operational activities remain simplified with low overhead and high margins.
• The demand in metro and tier-2 cities remains high.
• Semi-passive income is well-suited for another country.

Bottom line:

 Real estate franchises suit NRIs who want steady income, low risk, and minimal involvement in India’s growing property market.

Investment Cost & Expected Returns

Franchise Investment Cost in India for NRIs

Typical investment ranges:

• ₹10–25 lakh: Education, Service, Retail
• ₹25-50 lakh: Mid-sized Food, Wellness, and Retail
• ₹50 lakh - 1cr+: Large QSR, Premium franchises

Cost Components Include:

• Franchise fee
• setup & interiors
• Equipment & Inventory
• Working Capital

Average ROI by Sector:

• Food & Beverage: 15-25%
• Education: 20-35%
• Healthcare: 18-25%
• Services: 20 -35%

Typical Break-Even Period: 

• 12-18 months (Education & Services) 
• 18–36 months (food & retail)

Typical Franchise Investment & Returns by Sector

Legal & RBI Rules For NRIs in 2026

If you’re an NRI who wants to invest in a franchise business in India, you have to know that the normative legal procedures are imperative. The following points provide the information in simple terms:

1. FEMA Regulations

• Investment opportunities for most of the franchises in India are offered by the FEMA (Foreign Exchange Management Act).
• Most foreign investments take place through the automatic route;  there is no requirement for prior RBI approval for conventional franchise sectors.
• Few restricted industries require an RBI approval, which is not common in franchises.

2. RBI Automatic Route vs Approval Route

• Automatic Route: All major sectors such as food, education, retail, and healthcare belong to this category. Any activity is allowed.
• Approval Route: In an approval route, RBI approval is to be obtained only in restricted or sensitive sectors. This occurs rarely in franchises.

3. Ownership Structure Choices for NRIs

• You can choose the ownership model that fits your investment style:
• Individual proprietorship (simplest, for single-owner setups)
• LLP (Limited Liability Partnership) – low compliance, flexible
• Private Limited Company – ideal for larger investments or scaling multiple outlets

4. Can NRIs Own 100% of a Franchise Business?

• Ensure that you comply with FEMA regulations in reporting your investment.

5. Repatriation

• You can repatriate profits back to your NRI bank account abroad.
• Taxes must be paid in India first (income tax, GST if applicable).
• Follow RBI norms for remitting money abroad safely.

Taxes and Repatriation of Profits for NRIs in 2026

If you are invested in a franchise business in India, you should be aware of taxes and repatriation rates. Here is the short version of what you need to understand:

1. Income Tax

• Your franchise profits in India are taxable. So ensure that you file your ITR every year."
• TAX, which depends on your business type:   Proprietorship, LLP, or Pvt Ltd.

2. GST (Goods & Services Tax)

• GST is applicable if the turnover is above Rs. 20 lakhs in metro areas or Rs. 10 lakhs in non-metro
• Filing on time keeps you legal and avoids penalties.

3. TDS (Tax Deducted at Source)

• Some payments like royalties or franchise fees may have tax deducted before you get it.
• Keep proper records so you can claim credit in India or your home country.

4. DTAA (Double Taxation Avoidance Agreement

• You can avoid double taxation if a DTAA exists between India and your residency country.
• Submit your documents properly to qualify for benefits.

5. Profit Repatriation

• You can transfer your profits abroad using NRO or NRE accounts.
• NRO account repatriation limit: USD 1 million per financial year, after paying taxes.

Financing Options for NRI

• Self-funding through NRE/NRO accounts
• Invest in a franchise directly with your NRE/NRO earnings.
• You have full control over your investment without formalities regarding interest or loans.
• Works best for small to medium-sized franchises.

Loans from Indian banks (selective eligibility)

• Some Indian banks offer loans to NRI investors who own franchises.
• You may be required to present a local co-signer or collateral to get approval.
• This helps you leverage capital for bigger franchise opportunities.

External Commercial Borrowings (ECB)

• Take foreign currency loans for large-scale investments or expansion.
• ECB provides low interest rates as compared to regular loans.
• Make sure that the deal meets the criteria of the regulations of the RBI and receives proper approvals.
• The foreign company can partner with a resident Indian.

Partner with a local trusted partner for operations and compliance.

• Banks prefer a local partner for loan approvals.
• Assists in managing the business from abroad where you will be residing.

Hybrid funding structures

• Combine self-funding, bank loans, and local partners to reduce risk.
• Allows investment in numerous franchise units without over-obligating funds.
• Allows flexibility to grow the business while remaining semi-passive.

How NRIs Can Start a Franchise in India: A Step-by-Step Guide?

Shortlist the Right Franchise

• Think about what best suits your budget, goals, and lifestyle.
• Go for a brand that's already proven and reliable, rather than starting from scratch.

Check ROI, demand, and location

• Ask yourself if the franchise will yield good returns with time.
• Look at the demand from your locality, competitors, and foot traffic before you make any kind of investment.

Perform legal and financial checks

• Ensure follow-through of FEMA and RBI instructions.
• Double-check all the costs and financial documents so that there are no surprises.

Review the franchise agreement

• Go through all the fees, responsibilities, and exit options carefully.
• It would be good to take the services of a lawyer who understands NRI investments.

Register your business

• Decide on Establishment as Proprietorship, LLP, or Private Limited Company.
• Also, remember the registration under GST and other licenses necessary within India.

Hire local managers or partners

• You can’t be everywhere, so it’s necessary to trust local workers or a partner.
• Create a simple reporting system to enable you to monitor your business from outside your country.

Run, track, and build

• Begin operations and monitor sales, costs, and consumer feedback.
• Once this is accomplished, it is time to consider expansion to new locations.

If you need further help  contact franchisebazar.

Risks to invest in a franchise  & How NRIs Can Minimize Them

Common Risks :

• Over-promised profits – Some franchisors may claim high returns that aren’t guaranteed.
• Inappropriate location – An area of low foot traffic can be damaging to sales, even for an established brand.
• Limited control from outside the country - It would be difficult to manage the team from outsite of the country. 
• Legal loopholes – Contracts may favor the franchisor or limit your rights.
• Exit challenges - It may be difficult to sell or transfer the franchise.
• High Initial Investments – High investments could pose a risk if the franchise takes a long time to realize its breakeven point.
• Competition Risk - There is a potential for revenue generated by local competition if there is a significant number of businesses within the local market.

How NRIs Can Minimize Risks:

• Proper due diligence:  checking out the franchisor's history, finances, and demand in the market.
• Hire a legal expert: Get your franchise agreement vetted by someone who is familiar with NRI rules.
• Remote monitoring of operations: Use reports, dashboards, and KPIs abroad.
• Visit occasionally: If possible, visit your outlets to see operations firsthand.
• Clear exit clauses: Understand how to sell or transfer the franchise, if required.
• Choose the right location: with the franchisor, select high-footfall areas.
• Train local managers: Employ experienced staff and offer training on clear lines.
• Start small: Start with a single outlet as a test before expanding.
• Watch the competition: keep an eye on local market trends and adjust as necessary.
• Build a financial buffer - Keep extra cash to deal with unexpected challenges.

Conclusion

Franchise business investment in India could be an excellent idea for NRIs. This is due to the fact that franchises have business models and brands, which, as compared to an uncharted business, have less risk and faster returns on investment in India.

Choosing the right industry, whether it is food and beverages, education, healthcare, retail businesses, or service franchises, can help you have regular incomes, semi-passive management, and growth.

If you’re ready to check out the best franchise business opportunity in India, start with narrowing down your choices and consulting an expert. The current Indian market and franchise industry are ideal for NRIs to invest in 2026 and on into the future.

Disclaimer: The brands mentioned in this blog are the recommendations provided by the author. FranchiseBAZAR does not claim to work with these brands / represent them / or are associated with them in any manner. Investors and prospective franchisees are to do their own due diligence before investing in any franchise business at their own risk and discretion. FranchiseBAZAR or its Directors disclaim any liability or risks arising out of any transactions that may take place due to the information provided in this blog.