In this FDD Talk post, you’ll learn the following:

• Section I – Background information on the Nestlé Toll House Café by Chip franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Nestlé Toll House Café by Chip franchise, based on Item 7 of the company’s 2018 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Nestlé Toll House Café by Chip franchise, based on Items 5 and 6 of the company’s 2018 FDD

• Section IV – Number of franchised and company-owned Nestlé Toll House Café by Chip outlets at the start of the year and the end of the year for 2015, 2016, and 2017, based on Item 20 of the company’s 2018 FDD

• Section V – Presentation and analysis of Nestlé Toll House Café by Chip’s financial performance representations, based on Item 19 of the company’s 2018 FDD, including information on the:

• fiscal year 2017 average, median, high, and low gross sales for the 37 franchised in-line Cafés, 23 franchised street/lifestyle Cafés, and 20 franchised kiosk Cafés in the United States operating for at least 12 months as of the end of fiscal year 2017

Section I – Background Information

12 Things You Need to Know About the Nestlé Toll House Café by Chip Franchise

Continued Global Expansion in 2017 and Plans for More Growth in 2018

1.  In early 2018, Nestlé Toll House Café by Chip announced that it had completed another year of rapid growth across North America, as well as overseas. By the end of 2017, the chain opened 21 new cafés in established and new markets in the United States, as well as 11 new cafés throughout the Middle East in Saudi Arabia, Iraq, Kuwait, and Lebanon.

2.  Rudy Frederico, vice president of franchise development for Crest Foods, Inc., the franchisor of Nestlé Toll House Café by Chip, said, “Thanks to our outstanding franchise partners here in the U.S. and in our international markets, we continued our strong growth pace over the past year. We’ve also been successful in attracting outstanding new franchisees, which sets us up nicely for another excellent year in 2018.”

3.  Nestlé Toll House Café by Chip said that more innovation and expansion was planned for 2018. At the time of the announcement, the brand projected to open 16 more cafés in the Middle East. Nestlé Toll House Café also planned to open its first location in Quebec, Canada in May. Overall, the company plans to open up to 35 additional locations system-wide by the end of 2018.

4.  Ziad Dalal, founder and president of Crest Foods Inc., said, “It’s an exciting time to be a part of the Nestlé Toll House Café by Chip family. Growth is strong, consumer demand is high and our franchise partners are prospering. I’m proud of the progress we made in 2017 and I see nothing but continued growth and success in the year ahead.”

Signs New Deal for Quebec Expansion

5.  Nestlé Toll House Café by Chip is continuing its growth in North America with its latest franchise development deal to expand in a new region of Canada. In early February 2018, Nestlé Toll House Café by Chip announced that the company had signed a franchise development deal with Carole Carrier to open an initial three cafés in Quebec.

6.  Carrier is the co-founder and co-owner of the Groupe Mirault, a family business that she has been expanding for more than 30 years. With the recent acquisition of a 60,000-square-foot commercial building, Carrier is introducing a new project for an indoor children’s amusement center that requires a food court. This is what led her to contact Nestlé Toll House Café by Chip to establish its first franchise in Quebec. At the time of the announcement, the first café was scheduled to open on May 24, 2018 in an indoor amusement park in Val-d’Or.

7.  Rudy Frederico, vice president of franchise development for Crest Foods, Inc., said, “We have made a concerted effort to expand our bakery café concept throughout Canada, and thanks to outstanding franchisee partners like Carole, our vision is quickly coming to life. I have great confidence in Carole and we look forward to working with her to introduce the people of Quebec to our amazing bakery café concept.”

Serving Limited-Time Fall Flavors

8.  To kick off the fall 2018 season, Nestlé Toll House Café by Chip launched several limited-time menu items featuring one of the most popular fall flavors, Pumpkin Spice. From September 4 to November 4, Nestlé Toll House Café by Chip locations across North America offered the brand’s popular Pumpkin Spice Lattes and freshly-baked Pumpkin Spice Cookies.

9.  Ziad Dalal, founder and president of Crest Foods, Inc., the franchisor of Nestlé Toll House Café by Chip, said, “There’s no doubt that we’re best known for our Nestlé Toll House chocolate chip cookies and specialty Nescafé Milano coffees; but pumpkin season gives us the chance to create some distinctive fall specialties that everyone loves. Few seasonal treats are as delightful as our Pumpkin Spice Lattes, unless, of course, you consider our scrumptious Pumpkin Spice Cookies.”

Company History

10.  Nestlé Toll House Café by Chip was founded in 2000 by Ziad Dalal and his business partner Doyle Liesenfelt. The brand’s concept is part bakery and part coffee shop that sells items based on the original chocolate chip cookie by Nestlé Toll House. Most of the shops also sell ice cream, specialty coffee, pastries, and crepes. Dalal came up with the idea to open a bakery café using the best brand name he could get. He immediately thought of Nestlé Toll House and fortunately Nestlé agreed to license the brand.

11.  Dalal immediately started franchising the Nestlé Toll House Café by Chip concept. Today, the franchise continues to grow in the United States, Canada, and the Middle East. According to Dalal, there is a lot of interest in the Nestlé Toll House Café by Chip franchise because people recognize and already like the Nestlé Toll House brand.

Entrepreneur’s Franchise 500

12.  Nestlé Toll House Café by Chip did not rank on Entrepreneur’s 2018 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of Nestlé Toll House Café by Chip franchise costs, based on Item 7 of the company’s 2018 FDD.

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

• Please click here for detailed information on Nestlé Toll House Café by Chip’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2018 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2015

• Outlets at the Start of the Year:  88
• Outlets at the End of the Year:  103
• Net Change:  +15

2016

• Outlets at the Start of the Year:  103
• Outlets at the End of the Year:  102
• Net Change:  -1

2017

• Outlets at the Start of the Year:  102
• Outlets at the End of the Year:  104
• Net Change:  +2

Company-Owned

2015

• Outlets at the Start of the Year:  5
• Outlets at the End of the Year:  2
• Net Change:  -3

2016

• Outlets at the Start of the Year:  2
• Outlets at the End of the Year:  1
• Net Change:  -1

2017

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  1
• Net Change:  0

Section V – Financial Performance Representations (Item 19, 2018 FDD) and Analysis

• The following table lists by Café type the average unit volume (AUV) for annual Gross Sales, the median Gross Sales, and the high and low Gross Sales during fiscal year 2017 of all franchised Cafés in the United States operating for at least 12 months as of the end of fiscal year 2017.

• As of the end of fiscal year 2017, there were 80 franchised Cafés operating for at least 12 months, of which 37 were in-line Cafés, 23 were street/lifestyle Cafés, and 20 were kiosk Cafés.

• The amounts in the table are based on information reported to Nestlé Toll House Café by Chip by franchisees in their weekly royalty reports.

• Nestlé Toll House Café by Chip has not audited, reviewed, or verified this information.

• If a franchisee failed to submit a weekly royalty report, the prior week’s figures were used to estimate the current week’s sales totals.

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