Written By: Resham Daswani

Franchising opportunities in India's food and drink (F&B) industry are more vibrant than ever. It used to be that you could dominate a market with just one product, one brand persona, and one customer promise—the single-brand expansion model. Businesses like Wow! Momo and Faasos (Rebel Foods) are changing the game by launching sub-brands to appeal to specific demographics, diversify their customer bases, and protect themselves from market fluctuations. The sub-brand franchise concept is becoming increasingly popular among both major and medium-sized franchisors. Investors can take advantage of new ideas backed by a well-established parent firm, rather than purchasing shares in a crowded brand.

So why are India's food and drink behemoths branching out into sub-brands? Before putting their money into this new franchise fad, what should investors keep an eye out for? Let's dissect it.

How Sub-Brand Franchises Grew Popularity

A sub-brand franchise, in its most basic definition, is a subsidiary that maintains some affiliation with the parent company while maintaining its own unique identity. Similar to a sibling brand, it may share assets, supply chains, and even shop locations; nevertheless, it aims to attract a slightly different demographic.

Yum! Brands, a global leader in the fast food industry, has demonstrated the value of diversifying revenue streams through its operation of KFC, Taco Bell, and Pizza Hut. The Indian market continues to catch up, but with a unique twist: rather than launching new brands as independent entities, many sub-brands are emerging within established mother companies.

• Wow! Momo expanded its reach beyond momos—it started My goodness! China can benefit from pan-Asian food.
• Behrouz Biryani, Oven Story Pizza, and Sweet Truth are just a few of the over forty-five cloud kitchen sub-brands operated by Rebel Foods, Faasos's parent company.
• New brand extensions are allowing the well-known tea company Chaayos to try its hand in the snack food industry.

In short, the sub-brand strategy allows franchisors to take advantage of economies of scale by sharing resources like kitchens, vendors, and delivery infrastructure while yet allowing their individual brands to serve distinct demographics. Because your franchise outlet isn't dependent on a single product trend, investors can rest easy.

Wow!Momo’s Case Study Success Using Sub-Brand Franchise Model

Though it started off as an eccentric idea for street-style momos, Momo soon realised that if it focused on just one product, its growth would stall. Presenting... Wow! China, its offshoot brand that caters to fast-casual Chinese cuisine—a popular choice among city dwellers in India.

• Community Kitchens: A Large My goodness! Momo stores also serve as Wow! Kitchens in China.
• Menu Distinction: Momos Appeal to a Youthful Crowd Seeking Snacks, whereas Wow! Delivery orders and family restaurants are China's sweet spot.
• Investors can enjoy higher average ticket sizes and stable operational expenses with this dual-brand strategy, according to the franchise pitch.
• Wow! Momo is trying out new dessert sub-brands and menus that emphasise health and wellness. Its growth strategy has shifted from being linear to portfolio-driven, more in accordance with a venture capital model.

Thus, investors should be impressed. The momo franchise is now a wager on a brand environment with several revenue streams, rather than just momos.

Rebel Foods & Fasoos Successeful Sub-brand Franchise Model

When it comes to sub-brand franchises, Rebel Foods (Faasos) is already the master. Rebel manages over 45 brands across multiple categories, all through a cloud kitchen style.

• Souvenirs (wraps and rolls)
• Biryani by Behrouz (high-quality biryani)
• Artisan pizzas from Oven Story Pizza
• Desserts (Sweet Truth)
• Oriental flavour profile (Chinese food)

Despite their separate identities in the marketplace, these brands actually work together in the kitchen, on the staff, and in the infrastructure. What this implies for franchise partners is:

• A single investment yields numerous streams of income
• With dynamic brand rotation, Rebel can swap out a sub-brand without rearranging the kitchen if one of them fails to meet expectations.
• We can launch new brands in weeks, not years, because to our high scalability.
• Additionally, Rebel Foods has begun franchising on a global scale, sending its sub-brands with an Indian background to Europe and the Middle East.

Lesson for investors: Faasos' strategy demonstrates that sub-brand franchising remains viable even in a down economy. The portfolio remains profitable regardless of the decline of any one culinary trend.

Reasons Why the Sub-Brand Franchise Model Is Important For Investors

You get a defined concept with traditional franchises. Nevertheless, sub-brand franchisees provide:

• Investments for the Future: Customer preferences change rapidly. The creation of sub-brands allows franchisors to change menus without completely reworking the system.
• Revenue Multiplier: Investors diversify their portfolios by focussing on a variety of products rather than just one (e.g., ice cream, desserts, smoothies).
• Pooled Assets and Liabilities: The parent company has already optimised the infrastructure, including the supply chain, marketing, and technology. Investing does not necessitate starting from zero.
• The Possibility of a Greater Return on Investment: By offering a wide variety of snacks, dinners, desserts, and drinks, sub-brand shops increase unit economics by driving up average order values.
• Appealing to Investors Who Are Putting Money in for the Second Time

Thus, opportunities under sub-brands tend to attract franchise owners who are looking to diversify their holdings.

Investor Checklist to Avoid Pitfalls While Investing In A Sub-Brand Franchise Model

The sub-brand business may appear profitable, but it isn't risk-free.

• Diluting the Brand: If not promoted properly, having too many sub-brands under one umbrella could be confusing to consumers.
• Difficulty with Operations: It needs solid infrastructure and training to run many menus. Services can suffer from ineffective implementation.
• The Future of the Parent Brand is Crucial: There may be a lot of ongoing adjusting for franchisees if the franchisor is really experimental.
• Industry Oversaturation: There has been a recent uptick in the number of sub-brands offering competing cuisines in urban metros.

Therefore, investors should always consider if the parent firm can support many sub-brands in the long run in terms of bandwidth, resources, and clarity.

Is Sub-brand Franchise Model Only For F&B Franchising?

Absolutely Not! Although it is most common in the food and beverage industry, sub-brand franchising is expanding into other markets as well:

• Technological advancements in education have led to the formation of new companies specialising in areas such as coding, language learning, and test preparation.
• Clothing retailers such as Reliance Trends are developing their own in-house labels to cater to the budget and luxury markets in distinct ways.
• Health and Fitness: Joining full-service gyms with boutique yoga and pilates sub-brands is becoming more common in the fitness industry.

This points to the sub-brand franchise model as the new growth architecture for franchising in India, rather than a transitory trend.

Before Investing In A Sub-Brand Franchise Model in India, investor should:

• Achievements of the Parent Brand: To what extent has the franchisor been able to expand its flagship brand?
• Differentiation of Sub-Brands: Is there anything really special about the sub-brand, or is it only a menu revamp?
• Overlapping Operations: Is the sub-brand able to keep expenses down by sharing adequate infrastructure with the parent?
• Assistance with Franchising: There needs to be parity for sub-brands in terms of training, marketing, and supply chain assistance.
• Decision-Making on Leaving: Is there a backup sub-brand in the ecosystem that you can try if the first one doesn't work?

Looking Ahead: Sub-Brands and the Future of Franchising in India

It is evident from companies like Wow! Momo and Rebel Foods that the sub-brand strategy will only gain momentum in the years beyond 2025.

• Cities in Tiers 2 and 3: Franchisors will likely launch regional thalis, millet-based menus, or affordable delivery-first brands that cater to local tastes.
• Global Markets: Behrouz Biryani and similar Indian sub-brands are seeing increasing demand in the Middle East, which is opening doors for international franchise potential.
• Technologically Enabled Sub-Brands: With the help of AI-driven menus and dynamic kitchen setups, franchisors will be able to switch brands more quickly, which will keep investors flexible.
• Investors can own more than just a restaurant with a sub-brand franchise; they can own a piece of a multi-brand growth ecosystem that adds value.

Is a Sub-Brand Franchise Right for You?

Yes, in a nutshell, provided you make a smart decision.

Sub-brand franchises combine the trust of established players with the freshness of new concepts. Through expanding their product line and making the most of their current infrastructure, they reduce investment risk. Mammoths are amazed! The success of Momo and Faasos in semi-urban markets and beyond demonstrates the universal applicability of this strategy.

Yet, doing one's homework is essential. Try to find a franchisor that has a well-defined strategy, a roadmap for the brand, and a solid system to back its franchisees up. One of the best methods to get into the franchise market in India in 2025, if executed properly, would be to invest in a sub-brand franchise.

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.