Updated October 8, 2019.

If you are considering a Nestlé Toll House Café by Chip franchise, don’t get blindsided by these 32 important franchise fees (from the initial franchise fee, to the royalty fee, to 30 other fees found in Items 5 and 6 of Nestlé Toll House Café by Chip’s 2019 FDD).

1.  Initial Franchise Fee:  $18,750 to $37,500

• When you sign a Franchise Agreement, you must pay Nestlé Toll House Café by Chip a nonrefundable initial franchise fee of $37,500 ($18,750 for a non-traditional venue).

• If you sign an Addendum to Franchise Agreement (Satellite), you must pay Nestlé Toll House Café by Chip a satellite fee of $7,500.

• If you are entering into a Development Agreement, the initial franchise fee for the first Café you develop will be $37,500 and the initial franchise fee for each additional Café you develop will be $18,750.

• In certain circumstances, Nestlé Toll House Café by Chip may discount the initial franchise fee for existing franchisees who wish to open additional Cafes but are not under a Development Agreement, for military veterans, or for franchisees who purchase multiple franchises.

2.  Development Fee:  $37,500 for the first Franchise Agreement, plus $18,750 for each additional Franchise Agreement contemplated under the Development Agreement

• When you sign a Development Agreement, you must pay Nestlé Toll House Café by Chip a nonrefundable development fee equal to the sum of $37,500 for the first Franchise Agreement plus $18,750 for each additional Franchise Agreement contemplated under the Development Agreement.

• As Franchise Agreements are signed under the Development Agreement, Nestlé Toll House Café by Chip will issue to you credits that are designed to fully satisfy the initial franchise fees due under those Franchise Agreements.

• For the first Franchise Agreement signed, you will receive a credit equal to $37,500. For the second and each additional Franchise Agreement signed, you will receive a credit equal to $18,750.

3.  Initial Training Fee:  $1,500 per person for initial training of additional personnel

• Nestlé Toll House Café by Chip does not charge a training fee for the initial training of your Operating Principal and General Manager (or 1 other additional personnel).

• At your request, and if space is available, Nestlé Toll House Café by Chip will provide initial training to additional members of your personnel, and it may charge a fee for that initial training. Nestlé Toll House Café by Chip currently charges $1,500 per person for initial training of additional personnel.

4.  Site Evaluation Fee:  $500 per visit

• If Nestlé Toll House Café by Chip determines that on-site evaluations are necessary, or you reasonably request additional on-site evaluations, you must pay Nestlé Toll House Café by Chip a fee for the evaluation and must reimburse it for all of its reasonable expenses (such as the cost of travel, lodging, meals, and wages) incurred performing the evaluation.

• Nestlé Toll House Café by Chip’s current site evaluation fee is $500 per visit, plus expenses, which must be paid within 15 days after it bills you.

5.  Royalty Fee:  6% of Gross Sales

• Due Date:  Weekly on Wednesday.

• Amounts due will be withdrawn by EFT from your designated bank account

6.  Marketing Fund:  currently, 1.5% of Gross Sales. Maximum of 2.5% of Gross Sales.

• Due Date:  Weekly on Wednesday.

• Nestlé Toll House Café by Chip has the right to require you to contribute up to a maximum of 2.5% of Gross Sales. Amounts due will be withdrawn by EFT from your designated bank account.

7.  Local Advertising:  currently, 0% of Gross Sales. Maximum of 3% of Gross Sales.

• Due Date:  As incurred by you.

• Nestlé Toll House Café by Chip does not currently impose a local advertising obligation. It has the right to require you to spend up to 3% of Gross Sales on local advertising.

• Your contributions to an Advertising Cooperative are credited against your local advertising obligation.

8.  Cooperative Advertising:  currently, 0% of Gross Sales. Maximum of 1% of Gross Sales.

• Due Date:  As determined by Cooperative.

• No Cooperatives have been established as of the date of the 2018 Disclosure Document.

• Cooperatives will be comprised of all franchised and company-owned Cafes located in designated geographic areas. Each Café will have 1 vote in the cooperative.

• Nestlé Toll House Café by Chip may allocate your Cooperative contribution to the Fund.

9.  Opening Advertising:  minimum of $5,000

• Due Date:  Before enrolling in initial training.

• You must deposit with Nestlé Toll House Café by Chip, or a marketing firm it designates, a minimum of $5,000 to be used by Nestlé Toll House Café by Chip’s designated marketing firm to conduct an initial local advertising and promotional program to publicize the opening of your Café.

10.  Advertising and Promotional Materials:  varies, depending on your advertising needs

• Due Date:  When billed.

11.  Intranet Access Fee:  currently, $410 per year

• Due Date:  Weekly on Wednesday.

• Amounts due will be withdrawn by EFT from your designated bank account.

12.  Interest:  18% or highest rate allowed by applicable law

• Due Date:  On demand.

• Interest may be charged on all overdue amounts.

13.  Initial Training of Additional or Replacement and Successor Personnel:  $1,500 per person

• Due Date:  Before training.

• No charge for initial training of initial General Manager and Operating Principal.

14.  Additional Assistance:  if you request additional assistance, you must pay the current per diem charge for Nestlé Toll House Café by Chip’s employees used to provide the assistance and its associated costs. Current per diem is $500.

• Due Date:  When billed.

• Nestlé Toll House Café by Chip provides opening assistance without additional charge. Any additional assistance you requested is billed at the current per diem rate.

15.  Transfer Fee:  $18,750 ($37,500 if the transfer occurs during the first year of the Franchise Agreement), plus Nestlé Toll House Café by Chip’s reasonable costs and expenses associated with the transfer, including training costs, legal and accounting fees and costs, and referral fees paid to franchise brokers

• Due Date:  Before transfer.

• Only Nestlé Toll House Café by Chip’s costs and expenses are charged if you transfer your rights to an entity controlled by you.

• The transfer fee is the same under both the Franchise Agreement and the Development Agreement.

16.  Resale Referral Fee:  greater of $5,000 or 10% of the sales price

• Due Date:  Closing of sale.

• Due only if a person Nestlé Toll House Café by Chip refers to you buys your franchised business or an ownership interest in you or in the Franchise Agreement. This fee is in addition to the transfer fee.

17.  Public Offering:  $10,000 or any greater amount necessary to reimburse Nestlé Toll House Café by Chip for its reasonable costs and expenses in reviewing the proposed securities offering

• Due Date:  When billed.

• This covers Nestlé Toll House Café by Chip’s cost to review the proposed offering of your securities. The offering fee is the same under both the Franchise Agreement and the Development Agreement.

18.  Renewal Fee:  25% of then-current initial franchise fee

• Due Date:  On signing renewal Franchise Agreement.

• You must give Nestlé Toll House Café by Chip at least 6 months’ notice; remodel to current standards; sign then-current Agreement.

19.  Additional or Remedial Training:  Nestlé Toll House Café by Chip’s cost in providing the training

• Due Date:  Before additional training.

• Nestlé Toll House Café by Chip may charge a fee for additional or remedial training. Cost will vary based on the staff, location, and type of training being offered.

20.  Annual and Other Mandatory Meetings:  the registration fee for the annual or other mandatory meetings. You must pay this fee even if your Operating Principal fails to attend any mandatory meeting.

• Due Date:  At the time you register for the meeting or, if you fail to register, when Nestlé Toll House Café by Chip invoices you.

• Your Operating Principal must attend each annual or other meeting Nestlé Toll House Café by Chip designates as mandatory. The registration fee may be withdrawn by EFT from your designated bank account.

21.  Support Fee:  $100 per week

• Due Date:  Weekly.

• If you fail to have a replacement General Manager trained or certified as meeting Nestlé Toll House Café by Chip’s standards after a General Manager leaves, Nestlé Toll House Café by Chip may charge you this fee until your replacement manager is trained or certified, as applicable.

22.  Corrective Action or Reinspection Fee:  $500 per visit, plus expenses

• Due Date:  On demand.

• If you fail to correct any noted deficiencies, or provide evidence of such correction, within a reasonable time as Nestlé Toll House Café by Chip determines, it may correct such deficiencies or reinspect the Café or both.

23.  Site Evaluation:  $500 per visit, plus expenses

• Due Date:  15 days after billing.

24.  Inspection and Testing:  cost of inspection or testing

• Due Date:  When billed.

• Nestlé Toll House Café by Chip may require you to pay it or an independent laboratory for the cost of inspection or testing if you purchase or lease items used in the Café from sources it has not previously approved.

25.  Indemnification:  varies according to loss

• Due Date:  On demand.

• You must indemnify Nestlé Toll House Café by Chip when certain of your actions result in loss to it under the Agreements.

26.  Audit Fee:  cost of audit

• Due Date:  When billed.

• Payable only if Nestlé Toll House Café by Chip finds, after an audit, that you have understated any amount you owe to it by more than 2%.

27.  Late Payment or Reporting Fee:  $50 per day you are late

• Due Date:  Daily.

• If you fail to pay royalties when due or fail to submit royalty reports weekly as required, Nestlé Toll House Café by Chip may charge you $50 per day until the payment or report is received.

28.  Extension Fee:  $5,000

• Due Date:  With your request.

• If you request an extension of the development period to meet your development obligations, you must pay an extension fee.

29.  Manual Replacement Fee:  $1,000

• Due Date:  When billed.

• If you request additional or replacement copies of the Manual.

30.  Satellite Fee:  $7,500

• Due Date:  On signing Addendum to Franchise Agreement (Satellite).

• If you elect to operate a Satellite in conjunction with your Café.

31.  Satellite Transfer Fee:  50% of then-current satellite fee

• Due Date:  Before transfer.

• Payable on transfer of the Franchise Agreement if you have a Satellite.

32.  Management Fee:  up to 8% of the costs and expenses of the build-out of the Cafe

• Due Date:  When billed.

• Payable if Nestlé Toll House Café by Chip manages the design, construction, installation, furnishing, and/or equipping of the Café.