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How to Start a Canteen Business in India?



In this Blog, we shall discuss how to start and manage a canteen business in India. We will give you all the information related to the Canteen Business in India, what is main equipment required, what are the licenses required to start a business and what are some important factors which individuals need to keep in mind. We all know that the demand for canteen business is very high nowadays. Also, a canteen is required in every office school, college, office, hostel, hospital, Railway station and Airport. For starting a canteen business in India, one needs to be aware of the relevant documents and important licenses which are must be needed to run a canteen business without any legal issues. Firstly, the owner should have to understand the customer demand before starting a business. Secondly, take a price factor into consideration for instance if the price at the college canteen is pocket friendly for students so, this will automatically lead to increase their demand.

Some important steps follow to Start a Canteen business 

  • Make a budget and capital requirement plan - Budget is one of the most important factors while planning for a canteen business or any other food business. It may differ according to the location and demand of the customers, different areas have different tastes in food so, it should be according to the customer's wants. If the canteen is in the college and school then students have different demands and their budget may increase as compared to the offices and other canteen locations.
  • Make a proper canteen business plan - A proper business plan before starting a canteen is important to understand the market and its demand. Also, try to take well-attested feedback from the customers such as what will be the food menu of the canteen and how it meets the customer choice. The food menu should be the best. After that, decide on the location which has to be customer oriented and find it according to the requirement in the area such as in schools and colleges. Furthermore, it required a permanent cooking and storage facility. This will be helpful for business growth at a starting stage. Hence, make sure to plan it prior to starting a business. 
  • What are the licenses and permits required to start a canteen business? - Before starting a business, please make sure that the licenses and permits are required to start a canteen business as FSSAI is the compulsory license for a food catering business. Also, GST Number is required for starting a food business such as shops and establishments sewage, water fitting, fire arrangements, etc.
  • Marketing and advertisement - It is very difficult at an early stage to grow a new startup business. In that case, we can distribute our leaflets along with the newspapers of the local area, and give advertisements on social media platforms such as Instagram and Facebook. This will help in promoting our business. Also, we can create our own website.
  • Prepare the layout of the Kitchen and Equipment - In the case of the food business, the kitchen layout is important, it requires at least 100 sq. ft of space. Proper equipment should be there in the kitchen such as oven, burners, stoves, fryer, storage cabinet, sinks, coffee/beverages station, chimney, etc. canteen business needs more staff because of the efficient and hygienic food so they have to work according to the demand of the customers in the area. For food serving in the canteen more than 25 people are required to manage the kitchen, takeaway as well as online orders.
  • Accepting different payment methods - Nowadays, most people do not prefer to take cash with them because there are numerous alternatives available for the same. Online payment methods such as Paytm, Google Pay, phone pay, etc. The owner should have made a UPI account so that it will be easy for the customer as well as the owner to accept the payment. Hence, availability is extremely important.

Important licenses required for a canteen business 

  1. FSSAI Registration and License - “FSSAI’’ is one of the most important licenses for starting a food business for food quality checks in India. The food safety and Standards Authority of India is responsible for regulating and supervising food in India. In addition to this, while applying for the food license applicant must carefully consider the type of license according to their need. Types of FSSAI Registration:- 
    • Basic FSSAI Registration - Basic FSSAI registration is required when you station your business with a 12 lac turnover. Then basic FSSAI is required to start a canteen business. Please make sure the budget is well in advance.
    • FSSAI State License - FSSAI state license is required when you start your business with more than 12 lac and up to 20 crores.
    • FSSAI Central License -  This license is for all those businesses that crossed a turnover of more than 20 crores.
  2. GST Registration - Goods and services tax (GST) registration is mandatory for all those who want to start their new business start-up. If the organization carries on business without registering under GST, it is an offense and heavy penalties will be levied on the person.
  3. Shop and Establishments Act registration- Every state in India has enacted the Shops and Establishments Act. This Act is executed to regulate the conditions of work, provide for statutory obligations of the employers and administer the rights of employees in the unorganized sector and other establishments in their jurisdiction. Furthermore, applicants must fully adhere to the legal requirement to ensure continuity as well as the smooth running of their business.
  4. Fire NOC (No Objection Certificate) - It is mandatory to obtain a fire NOC certificate from the fire department to ensure adherence to the relevant state authority’s guidelines. It is the certificate issued by the Fire Department of the respective state after examining and checking the building's fire assistance and the machinery installed for fire safety.

Documents required for FSSAI registration to start a canteen business in India

  • Signed and completed Form- A (In case of FSSAI Basic registration) and Form- B (In case of FSSAI state and central) 
  • Photo Identity of the owner-approved signatory of the endeavor, For instance, PAN card, or Aadhar card self-attested. 
  • Proof of possession of premises (Rental Agreement/ Utility Bill) 
  • Partnership/certificate of Incorporation/ Articles of Association/ Memorandum of Association. 
  • List of food products manufacturers or processed or stored. 
  • Food safety management system plan. 
  • NOC from the manufacturer, if the applicant is starting a business of repacking and relabeling.

GST (Goods and Services Tax) rates are applicable for Canteen businesses in India 

  • 5% GST will be applicable on food services that are provided by the restaurants.
  • 5% GST will be applicable on food/ drinks (non-alcoholic) served at the canteen at schools, hostel, colleges, etc. 

Is Canteen Business Profitable in India?

In India, the canteen business is one of the most profitable businesses for entrepreneurs. Also, it is beneficial as compared to other businesses in India. The price of the meal in the canteen is cheaper than the restaurants and other food stalls if the cost of the food is low then the demand will automatically rise by which you can earn more and more profit. Hence, it leads to high demand in the market.

Advantages of Canteen Business 

  • Freshly Prepared Food - In the canteen business, food is freshly prepared because they have a limited targeted audience as well as limited opening hours. As restaurants, they do not prepare all-time meals, they just focus on the one-time meal. 
  • Less Food Wastage - Canteen chefs prepare food according to their daily demands, they do not make food in bulk quantity in restaurants. Canteen chefs worldwide have to estimate the number of food resources in a given day. Hence food wastage is limited in the canteens. 
  • Availability of Food - The canteen serves a variety of fresh and packaged food such as sandwiches, burgers, etc. Also, they serve meals at lunch. They do not need to make a long menu just like restaurants,  they serve limited items. 
  • Cheap & Easy Maintenance of Records - They maintain all the records in a systematic way such as food orders list and payments etc.


In this blog, we have discussed how to start a canteen business and what are some important steps that one needs to follow while planning for the canteen business in India. Canteen business is not an easy process, the applicant needs to manage the financial requirements, find out the location, hire staff, and apply for the license and permits. corpseed will help you in getting the FSSAI License and GST(Goods and services) furthermore, this article will provide you with some insights into operating the canteen business in India

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not corpseed, and have not been evaluated by corpseed for accuracy, completeness, or changes in the law.


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I'm Aastha, a fresh graduate and I worked with many news agencies and startup. I'm passionate about writing blogs and news stories. Now, I'm working as a content writer at Corpseed ITES Private Limited.

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