NESTLE TOLL HOUSE CAFÉ BY CHIP Franchise Complaints
The Nestle Toll House Cafe franchise company is NOT owned by corporate giant Nestle.
That’s the first thing you should know.
It’s owned by a Richardson, TX-based Crest Foods, Inc. which was a single-unit Mrs. Fields franchisee.
The second thing you should know is that, according to the Coleman Report, the Nestle Toll House Cafe franchise has one of the worst SBA franchise loan default rates in the country.
With a loan default rate of 30%, the Nestle Toll House Cafe by Chip franchise earns a spot on the UnhappyFranchisee.Com Worst Franchises by SBA Loan Default Rate list.
The third thing you should know is that American taxpayers may be partially footing the bill for these failed cookie franchises, since our tax dollars pay back the banks for SBA-guaranteed loans.
Are you familiar with the Nestle Toll House Cafe by Chip franchise? Please share a comment – positive or negative – below.
Things look even worse when one digs into the Nestle Toll House Cafe by Chip Franchise Disclosure Document (FDD).
According to the 2014 Nestle Toll House Café FDD:
The total number of Nestle franchises open between 2011 – 2013: 120
% of Nestle Toll House franchises closed, reacquired, not renewed: 30% (36 total)
% of Nestle Toll House franchises closed, reacquired, not renewed, or transferred to new owners: 39% (54)
Number of Nestle Toll House franchises sold but not opened: 32
ALSO READ:
FRANCHISE DISCUSSIONS by Company
Nestle Toll House Cafe Franchise Disclosure Document (FDD) 2014
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This is not a joke. As a franchise owner, everything looks good in person but in the background the business model is more than inadequate. I am taking the time to write this so you can ask these questions before you buy a franchise.
Product
Your product cost is more than consumers pay. I’m assuming the franchise takes a very large cut and they do not care if you go bankrupt. It’s very clear when you call to ask for assistance, that their goal is not even to make money from royalty. Im assuming it’s from the cost of opening a store. They have lots of fees. Even your processing rate is very high for a franchise. Most franchises pay between 1-2% and you will be paying 3-4% per transaction. A big advertisement of theirs is the cost of nestle pure life water. Don’t be fooled. They charge double the price you can buy it for at a grocery store. You cannot negotiate with the distributor yourself.
Coffee
They require you to use their designated coffee machine. The coffee cups don’t fit in the machine. The machine only makes half a cup. They want you to make two half cups and pore into 1 big cup. It’s also a very slow machine so again two regular coffee’s will take 4minutes to pore. Latte’s take longer. Go into any nestle toll house cafe and you will see a machine that looks like it belongs in a bank for customers to self serve. The franchise says they can’t do anything about it and they lock you into a contract.
Staff
The poor business model is confusing to teach and train and staff are nonexistent. You WILL be running the store yourself with no help. Their Texas corporate store has the same issue so do not think it’s your fault. Again! Their corporate store has the same problems and they do not care to make anything changes.
Closing
Like this article said, stores constantly close down. The company went from 200 to 100 stores and although the ceo would constantly emphasize growth in any quote you read online, they do not have growth. They have a decline.
Don’t take my word for it. Call store owners. Ask questions. Sit in a cafe on a Saturday, and I hope I saved you a 10 year contract and a lot of money. I want to say more but I wouldn’t want to hint at who I am, in case the franchisor reads this.
I can absolutely attest to the truth in the above comments. This is a horrible company for franchise owners with no assistance whatsoever provided to franchisees.
They will mislead you by telling you how great a location is and will tell you that paying $6,200 a month rent is the going rate in a crappy location/city. I wish we would have done more research instead of listening to a company who we thought had our best interest in mind. They make everything sound so wonderful when they are pitching the franchise to you. We lost over $125k, never made one dime, and ended up having to close the store, only to be sued by them for hundreds of thousands of dollars for breach of contract.
Please do your research and DO NOT get a Nestle franchise. It will be the most costly, stressful decision of your life. I can assure you, you will regret it.
A company doesn’t go from 200 to 88 franchises because they are doing something right. The numbers speak for themselves. Don’t believe their lies like we did.