New amenities for both the store and kiosk, along with new menu items, have transformed the concept into more than just a place for treats.
Nestl?© Toll House is about as iconic as it gets in the world of cookies. Since 1990, the brand has been leveraged outside of home kitchens and into the restaurant space through Nestl?© Toll House Caf?© by Chip.
The restaurant chain, however, is not part of Nestl?©, the Swiss-based global conglomerate behind everything from Butterfinger candy bars to Lean Cuisine frozen meals and Purina pet food. Instead, the chain is owned by Ziad Dalal, a former real estate developer turned restaurateur who in the 1980s owned a successful chain of smoothie shops. After selling that chain, he approached Nestl?© about starting a restaurant concept based around the company's famous chocolate chip cookies. Those negotiations closed successfully, and in 1990 the first Nestl?© Toll House Caf?© by Chip opened its doors. Today, the chain has more than 100 stores, bringing Nestl?© treats to malls and kiosks literally around the world, and all the while maintaining a close working relationship with the company that gave the chain its name.
"We actually have exclusive rights to the Nestl?© and Toll House names in our branding," says Shawnon Bellah, Nestl?© Caf?©'s senior vice president of global operations. "There's a great relationship between us, Nestl?© USA, Nestl?© Canada and Nestl?© Global to ensure we're aligned with the brands. We take part in all Nestl?© brands in our four walls."
With this natural and easy connection to the world of sweets and treats, it's notable that Nestl?© Caf?©'s latest move includes some savory components that allow the chain to offer full meals, along with a redesigned front of the house.
New Flavors, New Look
According to Bellah, the inspiration for this change came from Nestl?© Caf?©'s move into the Middle East. After opening stores there in 2010, the chain's leaders noticed the region's diners preferred to linger and have a small snack, like a sandwich, along with their treat. Bellah and the chain's other leaders realized that adopting this approach would be a growth opportunity for Nestl?© Caf?© worldwide.
The first part of this change, says Bellah, was upgrading the restaurants' environment. Customers must feel comfortable in a space before they'll linger. This wasn't a simple change. Nestl?© Caf?© has two basic types of stores: The regular strip-mall style, a full-sized unit where the chain controls the entire space; and the mall-style kiosk, where design opportunities are more limited.
At the full-size units, one of the first changes was seating. The chain replaced many of the old, hard chairs with soft new seating, including couches and club chairs situated around coffee tables. These stores will also offer customers free Wi-Fi access and now serve coffee in ceramic mugs, all of which can encourage a diner to linger, and maybe even get another cookie.
The new color palette for these stores includes lots of warm tones, including browns and tans. The new wall murals feature images of coffee beans, old coffee containers and cookies coming out of the oven. All of the units feature an aged, distressed look, which helps build a warm, almost nostalgic atmosphere.
While implementing some of these changes is not possible at kiosk locations, Nestl?© Caf?© continues to take steps to improve the atmosphere at these locations too. The chain, for instance, hopes to contract with mall owners to take over roughly 200 square feet of space at kiosk sites, and in some cases Nestl?© Caf?© has even agreed to handle cleaning this area. In this space the chain will set up comfortable chairs and couches for diners, as well as tables branded with the same nostalgic images that adorn the walls of full-size locations.
The kiosk refresh isn't limited to a couple of new tables and chairs, though. The kiosks' redesigned outer shells encourage people to linger. The back and sides of its newest kiosk locations now offer counter seating with bar-style chairs. Each of these spaces includes a hook for purses and shopping bags and an outlet for people to charge their phones or laptops. Nestl?© Caf?© will retrofit its existing kiosks to include these features, Bellah notes.
Along with this upgraded look is an updated menu. The chain has rolled out a lunch part featuring crepes and sandwiches on both sides of the sweet/savory divide. These include a cheese crepe (targeting the kid's grilled cheese set); a bruschetta crepe with spinach, tomato and pesto; and sandwiches featuring chicken, spinach and tomatoes; and more. These items can be purchased individually or in combo meals, each of which includes a sandwich or crepe, a drink and a cookie.
Crepes and sandwiches aren't the only changes Nestl?© Caf?©'s menu has undergone in recent months. In April the chain launched a revamped smoothie program. Previously, Nestl?© Caf?© sold smoothies with all sorts of add-ons and powders, but the company never gained traction with this offering. It's new smoothie program goes back to basics. "Our customers want real fruit, and they want something that tastes good. They're not necessarily looking to add protein powder and that kind of ingredient. That's not who we are," Bellah says.
Together, the new look and offerings encourage diners to actually spend time at Nestl?© Caf?© locations rather than just grabbing a cookie and heading out. "Customers are welcome to stay and relax," says Bellah. "We want them to have more than dessert. We want them to have a crepe and maybe a cup of coffee."
Apparently, that's exactly what customers are doing. Stores that offer these new menu items have seen their average check increase by roughly $2.
Menu Expansion Principles
With three new menu categories coming online in recent months, it's clear that Nestl?© Caf?© is willing to move outside of its comfort zone. That doesn't mean the chain is being careless in its pursuit of new revenue, though.
When Nestl?© Caf?© considers expanding the menu, says Bellah, it only looks at offerings that staff can execute with, at most, a limited investment in new equipment. Not only does new equipment add to build-out costs, Bellah notes, it also takes up valuable space, which is of particular concern in the concept's kiosk units. The addition of crepes, for example, only added between $4,000 and $5,000 to the cost of a unit, and the chain has been able to use most of this equipment for multiple menu items (more on this later).
During the planning stage, Nestl?© Caf?© works with vendors to fine-tune and pare down menu offerings. Bellah and her team also set benchmarks surrounding sales, equipment costs and return on investment that they use to measure the success of new items.
At this point, Nestl?© Caf?© tests the offerings in a handful of stores for three to four months. While some items like crepes and sandwiches succeed, others never make it out of this testing phase. "We've had some attempts that just didn't work," Bellah says. "Maybe it was the equipment or the space to bring the additional product in, or maybe the sales didn't react the way we thought they would."
Nestl?© Caf?© integrates the test items that do make the final cut into its menu and adjusts the equipment lineup, if necessary.
In the full-size stores, most of the action takes place in the front of the house. Customers who enter the service area face a bakery display case showcasing cookies, brownies and other treats behind curved glass. The six-foot-by-four-foot case holds these items at ambient temperature. Next to the display case, a refrigerated grab-and-go display case holds Nestl?©-brand chocolate milk, bottled water and energy drinks.
Behind the counter, the lineup now starts with a double crepe plate, which allows staff to avoid service delays by cooking two crepes at a time. Next to the crepe plate sits a 72-inch cold table with wells and a food shield. Here, the chain holds produce and meat for crepes and sandwiches alike. Under the wells, extra prepped ingredients are refrigerated and ready to go when needed.
Beyond the cold table are two dipping cabinets capable of holding 24 different ice cream flavors in total, followed by a small station for dry ice cream toppings, like sprinkles and chocolate chips. The area behind the counter also holds a countertop waffle cone maker; a countertop panini press; a small microwave for heating and melting some glossy icings; and a food warmer for melting chocolate.
This space also includes a number of different pieces for beverage service, including an ice machine, a soda dispenser, an Icee machine and a bubbler for lemonade, iced tea and even iced lattes. Also up front is an automatic soluble coffee machine that makes brew-style and specialty coffee drinks. The machine, Bellah points out, can recognize different cup sizes, allowing staff to operate it with the push of just one button.
Along the back wall are the pieces that make up the heart of Nestl?© Caf?©. In a row are a full-sized cooling rack with casters, a full-sized upright oven and a single-door upright freezer where preportioned dough for cookies and brownies sits ready to cook.
This preportioned, frozen dough reveals an important factor in the chain's operation. Instead of having each individual location portion and mix ingredients for more than a dozen different cookies and brownies each day, Nestl?© Caf?© has its dough made and portioned at professional kitchens, which then ship the items to stores across the United States and around the world. This, says Bellah, is key to ensuring high quality and consistency.
As a result, Nestl?© Caf?©s feature a relatively simple back of the house. Equipment includes a walk-in freezer, typically eight-by-eight or eight-by-six feet, that stores frozen cookies and brownies as well as meats for crepes and sandwiches; a reach-in refrigerator that holds milk and some chocolate toppings; dry storage shelving; a food-prep sink to clean produce used in crepes and sandwiches; and a three-compartment sink for washing utensils and full-sized sheet pans.
Kiosks feature a similar but scaled-down lineup. Cold tables for sandwich and panini ingredients measure 48 inches instead of 72, while ice cream dipping cabinets hold 16 flavors, not 24. The baking lineup is smaller too. The oven is shrunk to accommodate half-sized sheet pans; the freezer for holding dough is smaller; and the rolling rack for cooling cookies goes from full-size to an undercounter version. The smaller sheet pans also mean the dishwashing sink can be smaller, saving valuable space.
For kiosk storage, Bellah says, Nestl?© Caf?© rents about 200 square feet of space at the mall where the kiosk is located. As a rule, this space must be within a five-minute walk of the kiosk itself.
New Partners, Big Growth
A new look, new menu items and a new equipment lineup aren't the only changes at Nestl?© Caf?©. The chain is in the midst of a period of truly impressive growth. Last year, the chain signed about 40 new franchise agreements. The chain is continuing its growth in 2014, and projects a jump from about 125 stores now to 145 stores by the end of the year.
Nestl?© Caf?©, notes Bellah, is priming the pump for this growth. Just a few months ago, it signed a deal with mall operator Ralph's Properties to open 18 stores at its locations. As part of the deal, Ralph's will pay for 75 percent of the initial store buildout. Nestl?© Caf?© is marketing these locations to current franchisees and new potential partners.
Whoever the chain ends up working with will get the benefit of the chain's expanded menu as well as the good feelings associated with an internationally known brand that stirs feelings of respect and nostalgia
"[The phrase] 'where everything's as warm as America's favorite cookie' is something we use internally. It's how we build our caf?©s, with the atmosphere, the warm tones, the greetings from our staff," says Bellah. "'Favorite cookie' is the trust factor that people have in us."
- President/CEO: Ziad Dalal
- Senior Vice President, Global Operations: Shawnon Bellah
- Foodservice Equipment Dealers: Structural Concepts and AceMart
Facts of Note
- Headquarters: Richardson, Texas
- Number of Units: 6 company owned; 119 franchised
- Projected Growth: 145 caf?©s by end of 2014
- Hours of Operation: 10 a.m. to 9:30 p.m. Monday through Saturday; 12 p.m. to 6 p.m. Sunday
- Average Unit Size: 600 to 800 sq. ft.
- Total Equipment Cost: approximately $60,000
- Franchise Fee: $30,000
- Key Expansion Markets: Dallas, Houston, Philadelphia and California
- Number of Staff per Store: 3 full-time; 8 to 12 part-time