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Complete Guide to Starting a
Franchise Business in Nepal

From company registration and legal agreements to tax compliance—we help you launch your franchise securely and profitably.

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Why Invest in a Franchise in Nepal?

Franchise businesses have a 45% higher success rate than independent startups in the Nepali market.

Established Brand Recognition

Leverage recognized names to build customer trust faster without spending years on branding.

Proven Business Model

Access tested operational systems, supply chains, and marketing strategies that reduce failure risk.

Reduced Investment Risk

Statistical data shows franchises are safer investments for first-time entrepreneurs.

Easier Bank Financing

Banks in Nepal prefer lending to established franchise brands due to their reliability and track record.

Training & Support

Get comprehensive training on operations, inventory management, and marketing from the franchisor.

Higher Profit Margins

Benefit from economies of scale and bulk purchasing power for better margins.

Common Franchise Models in Nepal

Franchise Type Description Investment Level Best For
Product Distribution Distribute branded products (e.g., Beverages, FMCG) in a specific area. Medium Experienced Retailers
Business Format Complete package including systems, training, and brand (e.g., KFC, Schools). Medium-High New Entrepreneurs
Single-Unit Operate one location only. Standard for coffee shops and boutiques. Varies Individual Owners
Master Franchise Operate as the “Head Office” for Nepal, recruiting sub-franchisees. Very High Large Investors

Franchise Registration Process in Nepal

Follow these 4 legal steps to secure your ownership.

1

Company Registration

Register your firm with the OCR (Office of Company Registrar) and get your certificate.

2

Tax Registration

Obtain PAN/VAT from the Inland Revenue Department (IRD) for tax compliance.

3

Industry Licensing

Secure specific operating licenses from the Department of Industry or local Ward.

4

Franchise Agreement

Sign the binding legal contract detailing royalties, rights, and territory.

💡 Legal Note: Both the franchisor (brand owner) and franchisee (you) must have legally registered entities in Nepal to sign a valid, enforceable agreement.

Franchise Startup Checklist

Documents Required

✓
OCR Company Registration Certificate
✓
PAN/VAT Certificate Copy
✓
Citizenship Copies of Owners
✓
Trademark Usage Rights (IP)
✓
Commercial Lease Agreement

Financial Preparation

✓
Initial Franchise Fee (One-time)
✓
Setup Costs (Interior & Stock)
✓
Monthly Royalty Fee (Usually 5-10%)
✓
Marketing Fund Contribution
✓
6 Months Working Capital Reserve

Success Stories

Examples of successful franchise models in Nepal.

International Food Chains

Brands like KFC and Pizza Hut have successfully adapted menus to local tastes while maintaining global standards, dominating the Kathmandu fast-food sector.

Education Consultancies

Many education firms have scaled from single offices to nationwide networks using a franchise model to ensure consistent counseling quality across cities.

Domestic Retail Brands

Local clothing and retail brands are increasingly using franchising to expand into tier-2 cities like Pokhara, Chitwan, and Butwal with minimal capital risk.

Frequently Asked Questions

What is the typical investment for a franchise in Nepal?
Investment varies widely by industry. Small tea/coffee kiosks might cost 5-10 Lakhs, while full-service restaurants, schools, or retail outlets can range from 50 Lakhs to several Crores. We help you assess your budget before committing.
Can foreign franchise brands register in Nepal?
Yes. Foreign brands can enter Nepal via the Foreign Direct Investment (FDI) route. They must register with the Department of Industry and bring in the minimum required capital (currently NPR 2 Crore per investor). BizSewa specializes in FDI facilitation.
What is a “Royalty Fee” and how is it paid?
A Royalty Fee is a monthly or yearly payment made to the franchisor for using their brand and ongoing support. It is usually calculated as a percentage (e.g., 5-8%) of your gross sales. This must be clearly defined in your agreement.
Do I need prior business experience?
Not always. One of the main benefits of a franchise is that the franchisor provides training on operations, marketing, and management. However, having basic management skills is beneficial.
How long does the registration process take?
Company registration takes about 5-7 days. However, finalizing the franchise agreement, getting FDI approval (for foreign brands), and industry licenses can take 2-6 weeks depending on the complexity.
What happens if I want to terminate the agreement?
Termination clauses are critical. Usually, you must give a notice period (e.g., 3-6 months) and may have to pay a penalty. You will also lose the right to use the brand name immediately. Always have a lawyer review the exit clause before signing.

Ready to Start Your Franchise?

Our experts will handle your legal registration, agreement drafting, and tax setup.

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