Fast food outlets at railway stations? Haldiram, WoW Momos & more —snack giants expect strong ROI, better growth

You might soon be able to grab your favourite bites from that one fast-food giant—right at your local railway station!Leading global and Indian restaurant and food chains have began approaching Indian Railways to seek clarity over the rules for setting up premium food and beverage outlets at railway stations. The fast food chains believe that sales potential at railway stations could outstrip that of airports, according to officials and industry executives. Last month, according to ET, government announced that established brands such as McDonald’s, KFC, Haldiram’s, Wow Momo and Baskin Robbins would be permitted to open outlets at railway stations. Officials said the first of these premium outlets are expected to become operational in 2026. “We want to bring the passenger experience at railway stations at par with airports,” a senior railway official told ET. He said the Catering Policy 2017 of the national transporter was amended last month to allow premium brand catering outlets at stations.‘Strong ROI’ While airports may deliver higher average order values, railway stations offer unmatched scale, said Sagar Daryani, president of the National Restaurants Association of India (NRAI). “With the right model, railway outlets can generate very strong returns on investment, driven by volume-led sales, faster TAT (turnaround time) and hopefully lower entry costs,” he said, as cited by ET. The government has announced that restaurant chains will be allotted five-year licences through e-auctions at more than 7,000 railway stations. Brands will be allowed to operate either company-owned or franchise stores. “Premium food outlets will have to maintain significantly improved quality of food and service while also paying a fixed licence fee for occupying space in stations,” the railway official said. Zonal railways will also be allowed to frame “special conditions” to ensure the feasibility of these restaurants while balancing passenger interests. According to a recent study by retail group IRHPL, beverages dominate food and beverage sales at airports, with soft drinks, coffee, juices and alcohol accounting for about 70% of airport F&B revenue. Executives said companies are expecting similar demand patterns to emerge at railway stations. “This policy unlocks massive potential for the industry, and we definitely see many upsides to opening restaurants at railway stations,” a spokesperson for Haldiram’s said. “There are small details that need to be ironed out, and we are working with the government to do this…if done right, this is going to be the next big QSR business opportunity as people of all ages and SEC (social-economic) groups travel via trains.”‘Major growth engine’ Daryani, who is also cofounder of Wow! Momo, said organised food brands could increasingly look at railways as a growth platform. “As operational frameworks mature, railways will become a major growth engine for organised food brands,” he said. The addition of premium food outlets is expected to support Indian Railways’ efforts to raise non-fare revenue, which currently contributes about 3% of its total income. A Niti Aayog assessment has highlighted significant untapped potential, noting that non-fare revenue accounts for around 30% of railway income in developed countries. Indian Railways reported non-fare revenue of Rs 588.07 crore in FY24, which increased to Rs 686.9 crore in FY25.