I tried setting up local choco server but it requires license to setup
and which is not feasible for us to tell the customers to setup their
own server by buying choco license.
Why not? Choco paid has features to support local software mirrors and making package building easier. Purchasing also helps the company making this tool continue to exist.
Replace the following line
linux /centos7-install/vmlinuz initrd=initrd.img stage2=/centos7-install/squashfs.img
linux /centos7-install/vmlinuz inst.repo=<source>
where <source> can be http://host/path with a complete copy of the directories and files on the full installation DVD. Optionally, you can extract files from "boot" ...