Kadhi Patta Plans Franchise Expansion in Eastern India

Kadhi Patta has prioritised eastern India in its franchise expansion plans. The brand aims to grow its network across Bihar, Jharkhand, Odisha, Chhattisgarh and West Bengal. Its proposal covers smaller and medium-sized cities as well as Kolkata. For prospective franchise partners considering the Indian market, the key feature is the choice of two operating models, each involving a different role for the investor.

Focus on Building a Network in Eastern India

The brand plans to establish a substantial regional network before expanding into other parts of India. The strategy includes tier-two and tier-three cities — India's smaller urban markets. Rather than simply increasing its presence in a single major city, the proposal envisages expansion through partnerships across several states.

However, targeting these states is not the same as opening outlets there. The announcement signals an intention to expand, rather than confirmation that trading has begun in every target city. Prospective partners should ask the brand separately about opportunities in their chosen city, site approval and proposed timelines.

When assessing this regional expansion plan, the operating model offered at a particular location matters more than the list of target cities. That model will determine the investor's responsibilities and involvement in day-to-day trading.

Two Models with Different Operating Responsibilities

Kadhi Patta's expansion strategy includes both a franchise-owned, company-operated model and a franchise-owned, franchise-operated model. Under the first option, the investor owns the outlet while the company runs it. Under the second, the franchise partner both invests in and takes responsibility for operating the outlet.

This distinction is more than a matter of terminology. When assessing a proposal, prospective partners should check who is contractually responsible for recruitment, purchasing, daily expenses, sales reporting and local decision-making. Company operation should not be taken to mean that the investor has no remaining financial or oversight responsibilities.

Similarly, investors considering the franchise-operated option should assess their own availability and management capabilities. Rather than comparing the two models as though their terms were identical, it would be more useful to obtain separate written proposals.

Investment of Around INR 10 Million for the Company-Operated Model

The brand's presentation puts investment in the company-operated model at approximately INR 10 million (one crore rupees). This includes around INR 8.5 million for setting up the outlet, INR 800,000 in franchise fees and INR 500,000 for initial stock. These figures should be treated as estimates supplied in the presentation, not as a final, all-inclusive cost.

Before proceeding with an investment, prospective partners should request a written breakdown of each item. In particular, they should establish which expenses are included in the proposed amount and which will be payable separately. They should also ask specific questions about working capital, premises-related liabilities and expenses after opening.

This investment breakdown relates to the company-operated model. It should not automatically be assumed to apply to the franchise-operated option. Anyone considering the latter will need a separate financial proposal and a breakdown of responsibilities.

How to Assess Revenue-Sharing and Payback Claims

The proposal outlines a 15 per cent revenue share for property owners. It also states an investment payback period of approximately 18 months. These are claims made in the presentation, not guaranteed business outcomes. A share of revenue is also not the same as a share of net profit.

Property owners should check the contract to establish the revenue basis used to calculate their share, when payments will be made and how sales can be verified. To assess the estimated payback period, it is important to understand the assumptions about sales, costs and the initial operating period.

Practical takeaway: Prospective partners considering Kadhi Patta's offer should first confirm availability in their chosen city and the operating model on offer. They should then obtain written details of costs, revenue sharing and payback calculations before making a decision.