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Nestle® Toll House® Café Franchise Cost & Fees

Date of Incorporation: 2000
Franchising Since: 2000
Headquarters: Richardson, Texas

Business Description: Crest Foods, Inc. is the franchisor. The franchises offered are for the establishment and operation of quick service bakery cafes.

Franchise Offer: The franchisor franchises the right to establish and operate a Cafe that is typically located in an enclosed shopping mall, outlet center, lifestyle center or strip shopping center under the Marks and the System under the terms of the Franchise Agreement.

Financial Assistance: The franchisor does not offer, either directly or indirectly, any financing arrangements to franchisees. The franchisor does not guarantee franchisees’ notes, leases or other obligations.

Training and Assistance: The franchisee’s Operating Principal and General Manager must attend and complete, to the franchisor’s satisfaction, the initial training program. The franchisor will conduct this training at the franchisor’s corporate headquarters and/or a Cafe operated by the franchisor or a franchisee in Dallas, Texas, or at another location the franchisor designates. The initial training program will generally last 11 days. The Operating Principal, General Manager and other personnel must attend the additional training programs and seminars the franchisor offers if required to do so. The Operating Principal must attend the franchisor’s annual meeting and any other meetings we determine to be mandatory. For the opening of the Cafe, the franchisor will provide franchisees with 1 of its trained representatives. The trained representative will provide on-site pre-opening and opening training, supervision, and assistance to franchisees for up to 7 days. If franchisees reasonably request or as the franchisor deems appropriate, it will, when its personnel is available, provide franchisees with additional trained representatives who will provide on-site remedial training to franchisees’ Cafe personnel.

Territory: Franchisees will not receive an exclusive territory. Franchisees may face competition from other franchisees, from outlets that the franchisor owns, or from other channels of distribution or competitive brands that the franchisor controls. Under the Franchise Agreement, the franchisor will designate a geographic area known as the Assigned Area at the time the Café location is accepted. The Assigned Area will generally consist of the contiguous property controlled by the landlord in which the Cafe is located, such as the shopping mall, airport terminal, university campus, hospital, outlet center, lifestyle center, strip shopping center, office/business park or transportation center. In certain circumstances the Assigned Area will be limited to the specific physical space occupied by the Cafe.

Term of Agreement and Renewal: The length of the initial franchise term is 10 years from the date the Café opens unless terminated earlier. If the Café will be operated at a non-traditional venue, the term will be co-terminus with the franchisee’s lease, up to 10 years. The Franchise Agreement may be renewed at the franchisee’s option for two additional 5-year terms. If the Café will be operated at a non-traditional venue, the renewal terms will match those in the lease, up to a total of 10 years.

Obligations and Restrictions: When franchisees sign the Agreements, they must designate and retain at all times an individual to serve as the “Operating Principal” under the Agreements. If franchisees are an individual, they must be the Operating Principal. If franchisees are an entity, the Operating Principal must be one of the Controlling Principals and must hold an ownership interest in the franchise or any entity that directly or indirectly controls the franchise. Except as may be provided in the Agreements, the Operating Principal’s interest in the franchise must remain free of any pledge, lien, encumbrance, voting agreement, proxy, or purchase right or option. Franchisees must comply with all of the franchisor’s standards and specifications relating to the purchase of all food, food products and beverage items, ingredients, supplies, materials, fixtures, furnishings, equipment (including point of sale systems, credit/debit card processing systems, computer and other technology systems), utensils and other kitchen items and products used or sold at the Cafe.

Estimated Number of Units: 155

Investment Tables:
Initial Investment for an In-Line Unit
Name of Fee Low High
Initial franchise fee $15,000 $30,000
Build out $40,000 $210,000
Architectural Engineering $3,000 $11,000
Project Manager Fees $3,000 $6,000
Legal Fees $1,500 $3,000
Lease Payments and Other Rental Expenses $2,500 $12,000
Equipment and Furniture $30,000 $95,000
Signage $13,000 $20,000
Initial Inventory $4,000 $9,000
Electronic Point of Sale System, Monitoring Software and Required Hardware $2,300 $4,600
Phone and Internet Service $350 $500
Travel, Lodging and Meals for Initial Training $1,900 $2,700
Business Supplies (stationery, business cards, brochures, presentation folders, paper and other materials) $1,000 $1,500
Business Licenses, Permits, etc. (for first year) $250 $1,500
Insurance Deposits and Premiums (for first year) $1,500 $3,500
Opening Advertising $5,000 $5,000
Additional Funds $30,000 $60,000
Estimated Total $154,300 $475,300
Initial Investment for a Kiosk
Name of Fee Low High
Initial franchise fee $15,000 $30,000
Kiosk Manufacture and Installation $40,000 $77,000
Leasehold Improvements $10,000 $20,000
Project Manager Fees $3,000 $6,000
Legal Fees $1,500 $3,000
Lease Payments and Other Rental Expenses $2,500 $10,000
Equipment $35,000 $71,700
Signage $13,000 $20,000
Initial Inventory $4,000 $6,000
Electronic Point of Sale System, Monitoring Software and Required Hardware $2,300 $4,600
Phone and Internet Service $100 $500
Travel, Lodging and Meals for Initial Training $1,900 $2,700
Business Supplies (stationery, business cards, brochures, presentation folders, paper and other materials) $1,000 $1,500
Business Licenses, Permits, etc. (for first year) $250 $1,500
Insurance Deposits and Premiums (for first year) $1,500 $3,500
Opening Advertising $5,000 $5,000
Additional Funds $20,000 $40,000
Estimated Total $151,750 $299,400
Other Fees
Type of Fee Amount
Royalty Fee 6% of Gross Sales.
Marketing Fund Currently 1.5% of Gross Sales. Maximum of 2% of Gross Sales.
Local Advertising Currently 0% of Gross Sales. Maximum of 1% of Gross Sales.
Cooperative Advertising Currently 0% of Gross Sales. Maximum of 1% of Gross Sales.
Advertising & Promotional Materials Varies, depending on your advertising needs.
Intranet Access Fee Currently $360 per year.
Interest 18% or highest rate allowed by applicable law.
Initial Training of additional or replacement and successor personnel $1,500 per person.
Additional Assistance If franchisee requests additional assistance, they must pay the current per diem charge for the employees used to provide the assistance and our associated costs. Current per diem $500
Transfer Fee $15,000 ($30,000 if the transfer occurs during the first year of the Franchise Agreement) plus reasonable costs and expenses associated with the transfer, including training costs, legal and accounting fees and costs, and referral fees paid to franchise brokers.
Public Offering 10,000 or any greater amount necessary to reimburse the franchisor for their reasonable costs and expenses in reviewing the proposed securities offering.
Renewal Fee 25% of then current initial franchise fee.
Additional or Remedial Training The franchisor's cost in providing the training.
Annual and Other Mandatory Meetings The registration fee for the annual or other mandatory meetings. The franchisee must pay this fee even if the Operating Principal fails to attend any mandatory meeting.
Support Fee $100 per week.
Site Evaluation $500 per visit, plus expenses.
Inspection and Testing Cost of inspection or testing.
Indemnification Varies according to loss.
Audit Fee Cost of audit.
Late Payment or Reporting Fee $50 per day.
Extension Fee $5,000
Manual Replacement Fee $1,000
Satellite Fee $5,000
Satellite Transfer Fee 50% of then-current satellite fee.
Management Fee Up to 8% of the costs and expenses of the build out of the Café.

The above information has been taken from the FDD of Nestle® Toll House® Café. Year of FDD: 2016

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