India Restaurant Franchise Operations Checklist

An operations checklist for franchising a restaurant brand in India: FSSAI licence per outlet, FoSTaC supervisors, local permits, GST, SOPs, training and audits.

India has no franchise law. There is no disclosure statute like the US Franchise Rule and no franchise relationship act like those in several Canadian provinces. The relationship between a brand and its franchisees is governed by the franchise agreement, read under general law: the Indian Contract Act, trade mark law for the brand, tax law, and the food safety and local licensing rules that apply to every restaurant whether franchised or not.

That puts a lot of weight on two things: a well-drafted agreement, which is a job for a lawyer, and an operations system that makes every outlet compliant and consistent, which is the subject of this guide. We have written it from the franchisor's side, but a franchisee taking on an outlet can use the same list to check what they are signing up for.

Rules in India change often and differ between states and cities. Treat this as a checklist of what to ask about, and confirm the current position with the issuing authority, your CA and your lawyer before relying on any of it.

Every outlet is its own food business

The single most common mistake in Indian restaurant franchising is treating compliance as something the brand holds centrally. It is not. Each outlet is a separate food business premises, and most of the licences below attach to the premises and the operator running it, which in a franchise is usually the franchisee.

A practical rule: if a food safety officer, fire officer or municipal inspector walks into the outlet, every document they ask for should be in that outlet, in the franchisee's name or the operating entity's name, with that outlet's address on it.

FSSAI licence or registration, per outlet

Every food business needs FSSAI registration or a licence, applied for on FoSCoS. FSSAI's FAQs state that a business operating across states needs separate licences or registrations for each unit, depending on that unit's capacity or turnover, and that some multi-state operators also need a Central Licence for the registered or head office.

The tier for each outlet depends on its turnover and type. Under the revised turnover thresholds that apply from 1 April 2026, registration covers businesses with annual turnover up to ₹1.5 crore, a State Licence covers those above that and up to ₹50 crore, and a Central Licence applies above ₹50 crore, with other Central Licence criteria that may apply regardless of turnover. Check FoSCoS for the current rules for your category rather than relying on a summary, including ours.

Things that catch franchise systems out:

An outlet that opened on a registration grows past the threshold and nobody upgrades it. Busy delivery outlets cross ₹1.5 crore faster than owners expect.
A franchisee changes the operating company (a new partnership, a new private limited) and the licence stays in the old entity's name.
A cloud kitchen running two or three of your brands from one premises has one licence but menus and listings for all of them. Make sure the licence covers what is actually being prepared there.
The licence number is missing from bills or aggregator listings. FSSAI requires the licence or registration number on receipts and invoices.

Our FSSAI compliance checklist covers the ongoing obligations once the licence is in hand, and FSSAI inspection preparation covers what an officer will ask for on the day.

A FoSTaC-trained Food Safety Supervisor at each outlet

The licensing conditions in Schedule 4 require licensed food businesses to have at least one trained and certified Food Safety Supervisor for every 25 food handlers, or part of that number, at each premises. Certification comes through FSSAI's FoSTaC programme, and for restaurants the relevant stream is Catering. FSSAI has also issued orders advising all food businesses to nominate trained supervisors, so even a registration-only outlet should have one; check the current requirement for your category.

For a franchise system, this means the supervisor sits in the outlet, not in your head office. A certified area manager who visits monthly does not cover a kitchen they are not in. We would ask each franchisee to certify at least one person more than the minimum, because supervisors resign, and the outlet is out of compliance from the day they leave until a replacement is certified.

The supervisor is also the natural owner of the quarterly in-house training that inspectors ask about. The FoSTaC guide explains the ratio, the courses and the training records in more detail.

Local licences and permits

Beyond FSSAI, an outlet usually needs several state and municipal permissions. Names, thresholds and issuing bodies vary by state and city, so treat these as categories to confirm locally:

Trade licence (sometimes called a health trade licence) from the municipal corporation or local body.
Registration under the state's Shops and Establishments Act, or the equivalent intimation under the state's current rules. Some states have simplified this; check whether the outlet needs registration, renewal or neither.
Fire safety NOC from the state fire service, depending on the building, floor area, seating and the state's rules. Restaurants in malls and multi-storey buildings almost always come under fire service scrutiny, and LPG storage, kitchen exhaust and exits are what fire officers look at.
In some cities, an eating house licence from the police.
Signage or advertisement permission from the local body for the fascia board.
Liquor licence from the state excise department, if the outlet serves alcohol. This is a separate and often slow process.
Environmental consent from the state pollution control board, where the state requires it for restaurants of that size.
Weights and measures (legal metrology) compliance for any scales used to sell by weight.

Build a permit register for each outlet with the permit, number, issuing authority, holder's name, expiry or renewal date and where the original is kept. Review it at every field audit. Expired trade licences and fire NOCs are the ones we see slip most often, because they renew on their own cycle and nobody owns the date.

GST

GST needs a little planning in a franchise system, and both sides should take advice from a CA. A few operational points are worth knowing.

GST registration is state-wise. A franchisee operating outlets in two states needs a registration in each, and so may the franchisor if it supplies goods or services from more than one state.

Most standalone restaurants charge GST at 5% on restaurant service without input tax credit. Restaurants in certain hotels are taxed differently, and the rules changed in September 2025, so check which applies.

Franchise fees and royalties are generally treated as a taxable service at 18%. For a franchisee on the 5% no-credit restaurant rate, the GST on royalties is usually a real cost rather than a credit, which matters when you model outlet profitability. Supplies of raw materials, sauces or packaging from the franchisor or a central kitchen will carry their own GST rates depending on the item.

Sort out invoicing early: who invoices whom for royalty, marketing fund contributions and supplies, how often, and how reconciliations happen. Monthly royalty calculated on gross sales reported from the POS is common, and it is far easier when the POS is standardised across outlets.

SOP readiness before opening

A franchised outlet is only as consistent as the SOPs it opens with. Before handing over, the franchisee should have, and understand:

Recipe and portioning standards for every menu item, with photos of the finished plate.
Receiving standards: what to check at the back door, which suppliers are approved, temperatures for chilled and frozen deliveries.
Storage rules: FIFO, labelling, date marking, raw below cooked, veg and non-veg separation where the brand requires it.
Cooking, cooling, reheating and hot holding temperatures, written in °C.
Cleaning schedules by frequency, including the exhaust, grease traps and the Schedule 4 items like pest control and water testing.
Opening, mid-shift and closing checklists.
Allergen and dietary information for every item, including Jain or no-onion-garlic variants if you offer them.
Packaging and dispatch standards for delivery orders.
What to do when things go wrong: a guest illness complaint, a failed temperature, a pest sighting, a supplier recall.

The SOPs should be in the languages your kitchen teams actually read. An English-only manual in a kitchen that works in Hindi, Tamil or Bengali will be followed loosely at best. The franchise operations manual template covers how to structure the manual itself.

Training

Training is usually split three ways. The franchisee and their outlet manager train at a company outlet or training centre before opening, typically for a few weeks. Your opening team supports the outlet on site through launch. After that, ongoing training is the franchisee's job, using your materials, with refreshers when menus or SOPs change.

Keep proof of training for each person: the module, date, trainer and a signature or sign-off. Attrition in Indian restaurant kitchens is high, and a new cook who joined last Tuesday is the one most likely to make a mistake. Make induction short, practical and done before the first shift on the line.

Audits

Plan the audit rhythm before the first outlet opens, not after the tenth.

Daily: opening and closing checklists, temperature logs and key cleaning tasks, completed by the outlet team with photo proof for the items that matter.
Monthly: a self-audit by the outlet manager against the full brand standard, scored the way an FSO would score the FSSAI items.
Monthly to quarterly: a field audit by your area manager, more often for new outlets and those with recent problems.
Once or twice a year: an independent food safety audit, by an FSSAI-recognised auditing agency or another qualified third party.

Read the results together. An outlet that scores itself near perfect while the field audit finds repeat problems needs a closer look at how its self-audits are being done. Our comparison of self-audits, field audits and mystery shoppers goes into the trade-offs.

Every finding should end in a corrective action with an owner, a due date and proof that it was done. Without that, an audit is just a report that gets filed.

A short pre-opening checklist

FSSAI licence or registration issued for this outlet, in the operating entity's name, correct tier
Licence number on bills, menus where required, and aggregator listings
Food Safety Display Board up
At least one FoSTaC-certified Food Safety Supervisor on site, more if the handler count needs it
Trade licence, Shops and Establishments registration (or intimation), fire NOC and any city-specific permits obtained or applied for as the rules allow
GST registration for the state, invoicing set up for royalty and supplies
Approved suppliers onboarded, first deliveries checked against spec
SOPs, recipe cards and checklists issued in the team's language
Training completed and recorded for the manager and every kitchen staff member
Pest control contract and water testing arranged
Permit register created with renewal dates
First field audit date booked