Written By: Gouri Ghosh The market of the fast-food industry in India is approximately 2 billion. Due to the increase in fast food, the market will grow very quickly. The QSR sector is also growing with it. It is another fast-growing sector in India. Due to the increase of urbanisation and the change in the food habits of people, this sector is gaining popularity day by day.

Due to a high demand for fast food, many people are now searching for a fast food franchise in India, but within a limited budget.

In this blog, you would be able to get information on how to get information on the best fast food franchise under 20 lakhs, the categories from which you can choose, investment, profit, and how to choose the best food franchise within your budget.  

Why Invest in Fast Food Franchises Under ₹20 Lakhs Is a Smart Investment?

Starting a restaurant from scratch involves a lot of risks, and it is not an affordable option either. This is why you, like many others, are looking for a food franchise, specifically a fast food one.

When you start a business under 20 lakh, it will help you to enjoy the business with low risk, and you can start with a low budget franchise.

Here are the benefits you will get:  

• Lower cost: When you start any restaurant or fast food franchise from zero, you need more money to invest, but if you invest in a franchise brand, you can start with a low budget.
• Proven business: You don’t have to take any risk because it already has a proven model.
• High demand: People are always looking for fast delivery, so you get customers very quickly.
• Flexible format: You can operate from a kiosk or a cloud kitchen to minimize costs.

You can operate your business from a cloud kitchen at your cost

Fast break-even point: You will get return within 9-18 months.

Key advantages:

• High repeat business: If people like your food, they are likely to return.
• Deliverability: You can also increase your earnings by going online through Zomato and Swiggy.
• Works well in smaller cities: You can operate in Tier 2 and Tier 3 cities with equal success.

If you are investing for the first time then these options are best for you.

Different Types of Fast Food Opportunities

Momo-Based Franchises

In the fast-food segment momo is very popular and the first ROI based franchise option for investors. The young generation loves this food as evening snacks so you can easily invest in this affordable franchise .

Momo Nation Café

This is one of the most popular options if you are looking for the best fast food franchises under 20 lakhs. It provides flexibility, along with the best options for the location.

This business model performs exceptionally well in areas where students come in large numbers, such as college areas.

• Investment: ten to fifteen Lakhs
• Category: Momos, Indo Chinese
• USP: Repeat Consumption and Youth Segment
• Ideal Location: Near Colleges, Food Courts
• Model: Kiosk/Cloud Kitchen/Dine-in
• Space: 100-300 sq feet
• Note: Entry model costs range from ₹6-12 Lakhs depending on the model

Wow! Momo (Kiosk Model)

Wow! Momo is a well-known brand in the QSR space of India. If brand is one of your major requirements, then this is a good option of a fast food franchise under 20 Lakhs.

Kiosk model is a better option for a fast food franchise under 20 Lakhs as it would be easier to operate a compact model. 

• Investment: ₹10-18 Lakhs
• Category: Momos & Quick Bites
• Model: Kiosk
• Space: 80-150 sq feet
• USP: Brand Recall & High Daily Sales Potential

House of Momo

House of Momo is a brand with a focus on efficient operations, and it has a central kitchen model, which is helpful.

So, if you are looking for a food franchise with a structured model, House of Momo is a good choice.

• Investment: ₹20 lakhs
• Category: Momos and fast food
• Model: QSR/Kiosk
• Require area: 140-310 sq ft
• USP: Central kitchen model, low wastage
• ROI: 15-18 months

Ajay’s Cafe

Ajay’s Cafe is suitable if you are looking for a low-budget food franchise.

Ajay’s Cafe is one of the most affordable options in the low-budget fast food franchise market.

• Investment: ₹5-9 lakhs
• Category: Momos and snacks
• Model: Kiosk/small outlet
• USP: Low budget, low investment, and easy operations

Zorko

Zorko is a contemporary brand focused on the cloud kitchen segment. This is suitable for people who want to invest in the delivery-based business model.

This is an excellent option for people who want to invest in the urban segment.

• Investment: ₹7-15 lakhs
• Category: Momos and fast food
• Model: Cloud kitchen/kiosk
• USP:  small space requirement

Rolls Franchises

This option is appropriate for a busy street and a metro region. This is also suitable for the evening segment.

Rolfi

Rolfi is an excellent option for people who want to invest in a menu with high profitability.

This is an excellent option for people who want to invest in high-footfall locations such as markets and offices.

This is also considered to be one of the most practical fast food franchises under 20 lakhs options due to the small space requirement.

• Investment: ₹8-12 lakhs
• Category: Rolls, kebabs, wraps
• Model: QSR
• USP: Small space requirement and high profitability
• Format: Ideal for high footfall areas

Burger and Budget Fast Food Chains

Burger and Fast food brands are always in demand. These brands target the masses and need high volume sales.

One Bite

One Bite is all about offering products at low costs, and this is the major reason for having a huge crowd visiting their stores on a daily basis.

If you are looking for a high-volume best fast food franchise, then this is a good option for you.

• Investment: ₹5-15 Lakhs
• Category: Burgers and quick fast food
• Model: Kiosk/QSR Model
• USP: Low pricing strategy to achieve high footfalls

Mr. Sandwich

Mr. Sandwich is a café outlet offering a variety of dishes on their menu. This is a good option for urban areas and young customers.

This is a slightly premium option for the franchise under 20 lakhs in the India segment.

• Investment: Around twenty Lakhs
• Category: Fast food café (sandwiches, fries, quick food)
• Model: Café Model

Tea & Fast Food Hybrid Models

The tea model with snacks has been found to be profitable due to the high repeat orders generated by the model.

Chai Garam

If you are looking to generate sales every day of the year, Chai Garam is one of the best options. The reason behind this is the high repeat rate of tea consumption in the country. This makes it one of the most stable fast food options with low budgets.

• Investment: ₹8-12 lakhs
• Category: Tea , Snacks & Quick Bites
• Model: Kiosk/ QSR
• USP: High frequency of consumption & high margins

 Category-Wise Investment 

Profit Analysis

While you plan to invest in the fast food business, if you are planning to invest less than 20 lakhs, you need to analyze the profit each category makes. This will help you choose the right food business based on your needs.

Momo-Based Franchises

• High demand: You will get high demand for the product, especially from young consumers.
• Repeat orders: People will order frequently if they like the taste.
• Faster break-even: You can break even on your investment in 9-12 months if you choose the right location.

Rolls-Franchises

• Good timing: You will get higher sales in the evening or late night.
• High demand: The business will be good, especially in the business area or offices.

Burger and Budget Fast Food Chains

• Volume-based: Your profits will be based on the number of orders you make on a daily basis.
• Pricing: You will need to keep the price low to make higher sales.
• Location plays an important part: You will need to choose the right location to make higher profits.

Tea & Fast Food Hybrid Models

• High Repeat Customers: People consume tea at least twice a day.
• Predictable Income: You can count on daily sales.
• Higher Margins: Beverage products tend to have higher profit potential than food products.

Pros and Cons of Low-Budget Fast Food Franchises

In order to make a practical decision regarding fast food franchises that require investments of less than 20 lakhs, it is important to know the pros and cons of such a decision.

Pros

• Low Investment: You don’t have to invest a huge amount of money to start your own business.
• Faster Start: You can start your own fast food outlet much faster than a restaurant.
• More Demand: You will always have customers who are willing to eat fast food.
• More Repeat Business: Once people start liking your food, they will come back for more.
• Easy Operations: You don’t need a complicated kitchen or a large staff.
• Franchise Support: You get a lot of support from the brand in terms of food, operations, and more.
• Delivery Business: You also have the option of increasing your sales through food delivery apps like Zomato and Swiggy.
• More Scalability: You have the option of expanding your business by opening more outlets in the future.

Cons

• High competition: You will face a high level of competition for popular food products like momos and burgers.
• Dependency on the location: Success of your business will depend on the footfall of the area.
• Difficulty in differentiation: You will find it difficult to differentiate your products when they are more or less the same as others.
• Pricing: You need to maintain a low price for your products to compete with others.
• Royalty: You have to pay a certain amount of money to the brand for running your business.

Common Tips for Choosing the Valuable Franchise

This will directly impact your success. Instead of rushing into things, it’s always practical to check everything properly before investing in a fast food business.

• Check existing franchises: First and foremost, it’s always important to check if the franchise is doing well at existing locations.
• Talk to existing owners: You should also talk to existing owners of the fast food franchises. This will give you an idea of the challenges and profits associated with the business.
• Check footfall: You should also check the footfall of customers visiting the existing fast food franchises. This will give you an idea of the demand for the food being served by the fast food franchises under 20 lakhs.
• Understand the cost: You should also understand the cost of investing in fast food franchises. This will give you an idea of the hidden costs associated with the business.

Common Mistakes investors should Avoid

There are certain mistakes that investors make while choosing a low-budget fast food franchise, and these need to be avoided to ensure good profit for the investors.

• No demand check: Investors should not choose a franchise without checking the demand for the product in the area.
• No check on competitors: Investors should not overlook competitors while choosing a franchise.
• No high expectations of earnings: Investors should not expect high earnings from the beginning.
• No working capital: Investors should keep money for day-to-day expenses.

If investors avoid these mistakes, they can run their fast food franchise in India effectively.

Conclusion

Opening a fast food franchise under 20 lakhs is one of the best options to enter the food business currently. As the need for quick and easy food is increasing day by day, opening a fast food franchise in India is a good option.

Rather than starting a business from scratch, a low-budget fast food franchise provides you with an already successful business plan and faster business establishment. Options like momos, rolls, burgers, and tea-based businesses are already successful and profitable.

It is not the brand name but the management of the business and the customers that make a business successful.

FAQs

1. What is the average return on investment time for a fast food franchise?

 Generally, all food franchise businesses are able to achieve their return on investment within a time period of 9-18 months.

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.