You don’t need statistics to know that Americans love their coffee. Just go to your local coffee shop and the line alone will tell you that. Add delectable treats to the mix from one of the country’s most recognizable names in desserts and you’ve got a great recipe for a successful franchise business.
We recently sat down and talked to the CEO of Nestlé Toll House Café by Chip Ziad Dalal about the success of the
business and how others can get in on the action.
Dalal describes Nestlé Toll House Café as a part bakery and part coffee shop based on America’s favorite chocolate
chip cookies from Toll House. Many cafés also feature ice cream, specialty coffees, pastries and crepes.
The cafés have been in operation since 2000 when the first one opened and the chain now boasts 125 in operation, 30 more under construction and another 30 in various stages of development in North America and the Middle East, which the company started penetrating in 2010. It aims to continue expanding in both North America and the Middle East in the near future.
The cafés have proven popular due to the public’s love of coffee and cookies coupled with the warm atmosphere and the stellar reputation of Nestlé Toll House, Dalal explains. “People want quality and people want something fresh,” the CEO says. “Everything we have is baked on premise so you have the aroma, the freshness and the quality.” Getting Started Dalal had a vision to open a chain of bakery cafés using the best brand name he could get and he had Nestlé Toll House in mind right from the start. Fortunately, Nestlé agreed to license the brand to Dalal’s team and threw the entire weight of the brand behind the endeavor. The company has had Shawnon Bellah on board for the past six years as senior vice-president of global operations and Ted Milburn as vice-president of franchise
development. Dalal says both of them have helped take the franchise to the next level. “We approached Nestlé, we licensed the brand from them and we did a lot of research and development with the first café, and then we enhanced it for the second café, and so on, until we perfected it,” Dalal notes. He adds that while the company is dedicated to growing, it is adopting a slow and steady growth model so that it associates itself with only the very best franchise partners. For Dalal, the very best franchise partners are ones who believe in the brand and who are able to deliver the level of service and satisfaction to customers that the Nestlé Toll House brand is known for. “Franchise partners should want to wow the customer and be service oriented,” he says. “Training people about the logistics of running a cafe and bakery is relatively easy,” the CEO points out, “but they have to bring the right attitude and enthusiasm
to the table.” The Franchising Process Nestlé Toll House Café receives a lot of interest from potential franchisees who know and like the brand. They’ll make an inquiry and fill out an application, generally starting at the cafe’s website
(nestlecafefranchise.com). Then starts a three-phase pre-qualification process that includes a phone interview
to determine if the candidate passes basic financial qualifications and seems engaged with the brand. If the potential
franchisee passes this phone interview, step two is to have a senior member of the company contact them and have them fill out a questionnaire. They later send them a franchising business partner (FBP) summary and another questionnaire to make sure they’ve reviewed the FBP and understand it. The potential franchise partner is then invited to participate in a phone call with senior members of the company so they can get a feel for if the person is the right fit for the company. If the senior members of the company get a good feeling from this process, thepotential franchise partner is invited to its headquarters in Dallas for a full discovery day. During this discovery day, they will
get a chance to talk to all the people in the various departments who will be helping them get set up, tour a few different Nestlé Toll House Cafés near the headquarters to see various ways of setting one up and
sample the products they’ll be selling. “We also interview them and we have different departments and different senior members from our company interview them to make sure it’s a discovery day both ways,” Dalal says, “them discovering us and us discovering them.”
After the discovery day, the potential franchise partner goes home — with some cookies in hand — and considers
if they still want to be a franchisee. The senior members of the company also meet as a committee to discuss the potential franchisee.
Not all discovery days end with potential franchisees being awarded a franchise. Sometimes one party will find that it’s not a good fit and will exit the process, but it’s always done gracefully so all parties part amicably.
For those who are the right fit, the process moves onto awarding them the franchise and all the paperwork that entails. The real estate department works with the new franchise partner to scout a great location and then the company works with them to secure that location. From the real estate department, the new franchisee is handed to the construction and development department, which helps the new franchisee with designing and constructing the new café, if necessary.
The new franchise partner can expect a lot of support from Nestlé Toll House Cafe, including training at the headquarterspre and post-opening support, marketing and public relations. While the franchise is getting up and running, the company offers daily support which tapers off to as-needed support when the new franchise
partner gets the hang of running the café. The company also conducts regular visits to ensure everything is running
as smoothly as possible and between visits communicates with the franchisee regularly.
“It’s constant support,” Dalal says. “We never stop supporting and serving our franchise partners.” “And the company learns just as much from its franchisee partners,” he notes. “They are regularly coming up with new
ideas for the company to try.” Currently, the company still awards single unit franchises, but is focusing efforts
on finding franchise partners who are interested in and capable of opening and running multiple cafes.
For a franchisee partner who craves the sweet taste of success, Nestlé Toll House Cafés may just be a delicious choice.For more information: