How to Buy a Franchise Business: A Step-by-Step Guide for Aspiring Entrepreneurs in India

Are you an industry leader or professional dreaming of owning a franchise business in India but unsure where to start? With thousands searching every month for the best franchise business opportunities under 10 lakhs, 20 lakhs, or even 50 lakhs, the Indian franchise market is booming. From cloud kitchens and preschools to fitness centres and beauty salons, a well-chosen franchise business offers proven systems, brand power, and faster returns compared to starting alone. 

In the recent dreamBIG podcast presented by deAsra Foundation, business growth strategist Mr Aniket More explained why thousands of nano-entrepreneurs are now scaling through franchising instead of opening new branches. This practical guide walks you through every stage of buying a franchise business in India – from research to your grand opening day.

Step 1: Decide if Buying a Franchise Business is Right for You

Before diving into lists of the best franchise business options, ask yourself honest questions. Do you want to follow a proven system rather than invent everything from scratch? Are you comfortable paying initial fees and ongoing royalties for brand support?

Mr Aniket More says, “Stop thinking ‘How do I grow my business?’ Start thinking ‘How do I make my franchisees successful?’” The same mindset applies when you become a franchisee: success comes faster when you trust the franchisor’s system instead of trying to reinvent it.

Step 2: Set Your Budget and Preferred Industry

A franchise business in India can cost anywhere between ₹5 lakh and ₹5 crore depending on the brand and format. Popular categories showing strong demand in 2025 include education, health & wellness, food & beverage, and retail.

Make a clear budget that covers:

• Franchise fee
• Interior and setup cost
• Working capital for the first 6–9 months
• Royalty and marketing fees

Many people search for the best franchise business under 10 lakhs, but remember: lower investment often means smaller territories or slower growth. Choose an amount you can fund without stress.

Step 3: Research and Shortlist the Best Franchise Business Opportunities

This is the most crucial step. Never sign anything before thorough research.

Start by attending franchise expos, browsing portals, and reading the deAsra dreamBIG podcast episode on Franchise for Business Growth. You will discover real insights from successful Indian franchisors.

Look for these green flags when evaluating any franchise business:

• At least 3–5 years of profitable operations
• Multiple company-owned outlets that are running well
• Existing franchisees who are happy and earning
• Complete training and ongoing support
• Transparent earnings data

Step 4: Reach Out and Attend Discovery Meetings

Once you shortlist 3–5 brands, fill out their enquiry forms. Reputed companies will invite you for a “Discovery Day” or one-on-one meeting.

Ask direct questions:

• What is the real breakeven timeline?
• How much do top-performing outlets earn?
• What support do you give in site selection and staff hiring?

Mr Aniket More emphasises, “Training is everything. Without training, no franchisee outlet can carry the brand effectively.” Make sure the franchisor invests heavily in your initial training – anything less than 15–30 days of hands-on training is a red flag.

Step 5: Study the Franchise Disclosure Document (FDD) Carefully

In India, every genuine franchise business must provide a Franchise Disclosure Document (FDD) or similar legal document at least 15–30 days before you pay any money.

The FDD contains:

• Franchisor’s background and litigation history
• Total investment table
• Initial fee and ongoing royalty structure
• Territory protection details
• Renewal, transfer, and exit terms

Hire a franchise-specialised lawyer (cost ₹25,000–₹50,000) to review it. Many first-time buyers skip this step and regret it later.

For a clear beginner explanation of what a franchise business in India actually means, read this helpful article: What is a Franchise Business?

Step 6: Speak to Existing Franchisees (Validation Calls)

This is your reality check. The franchisor will give you contact details of current franchisees. Call at least 7–10 of them, including some who joined in the last 12 months.

Ask:

• Did the actual cost match the estimate?
• Is the support as promised?
• Are you happy with the earnings?
• Would you buy this franchise business again?

If most answers are positive, you have probably found one of the best franchise business options for you.

Step 7: Secure Financing

Popular funding options in India:

• Bank loans under Mudra or CGTMSE schemes
• Franchise-specific NBFC loans (Bajaj Finance, Tata Capital, etc.)
• Personal savings or family funding
• Some franchisors tie up with banks for easier approval

Keep your credit score above 750 and prepare a solid project report.

Step 8: Finalise Location and Sign the Agreement

Once financing is ready, the franchisor helps you select and approve the site. Only after site approval do you sign the final franchise agreement and pay the franchise fee.

Tip: Negotiate for a larger exclusive territory if you are investing above ₹50 lakh.

Step 9: Undergo Training and Set Up Your Outlet

Top brands provide 2–6 weeks of classroom + on-site training. Use this period to hire and train your team exactly as per the brand’s SOPs.

Follow the franchisor’s layout plan strictly – even small changes can hurt customer experience.

Step 10: Grand Opening and Ongoing Operations

Most brands handle your grand opening marketing. Follow their launch checklist to the letter.

Remember Mr Aniket More’s advice: “When franchisees succeed, the brand becomes a trusted name, and growth follows naturally.” Stay in regular touch with your franchisor’s support team, attend all refresher trainings, and focus on delivering a consistent customer experience.

Conclusion

Buying a successful franchise business in India is one of the smartest paths to entrepreneurship in 2025. By following this step-by-step process – thorough research, FDD scrutiny, franchisee validation, and disciplined execution – you dramatically increase your chances of owning a profitable outlet within the first year. 

The best franchise business is not always the cheapest or the most famous; it is the one that matches your budget, values, and work style while offering genuine support. Start your journey today with proper homework, and you could soon be running a thriving branded outlet under a proven system.

FAQs

1. How much money do I really need to buy a franchise business in India?

Total investment for the most popular franchise business in India ranges from ₹8 lakh to ₹80 lakh, depending on the brand and city. This includes franchise fee (₹2–15 lakh), interior cost, equipment, and 6–9 months working capital. Always keep 20–25% extra as a buffer for unexpected delays.

2. Which is the best franchise business under 20 lakhs right now?

Education (preschools & tuition centres), cloud kitchens, and pharmacy retail chains are currently among the best franchise business options under 20 lakhs with strong demand and quick breakeven (9–18 months). Choose brands that already have 20+ running outlets.

3. Is it compulsory to hire a lawyer before signing the franchise agreement?

Yes. Spending ₹25,000–50,000 on a franchise lawyer can save you crores later. They spot unfair clauses on territory, renewal fees, or forced purchases that many first-time buyers miss.

4. Can I buy a franchise business if I have no prior industry experience?

Absolutely. In fact, most franchisors prefer passionate newcomers who will follow their system exactly, rather than experienced owners who want to “do things their way”. Strong training programmes make experience less important.

5. How long does the entire process take from enquiry to opening?

For a well-prepared buyer, the complete journey – research, FDD review, financing, site selection, training, and setup – usually takes 4–8 months. Rushing any step increases the risk of costly mistakes. Patience pays off in franchising.