The Demise Of Nestlé Toll House Cafés

If you find yourself craving chocolate chip cookies while doing your grocery shopping, you, like many Americans, probably reach for a package of Nestlé Toll House's famous make-and-break cookie dough. After all, the iconic Nestlé treat isn't just delicious, it's the reason we even have the decadent dessert in the first place. As New England Today reports, the company is actually credited with the crucial component of the recipe used to bake up the first-ever batch of chocolate chip cookies in the 1930s.

So, considering the brand's popularity and historical significance, when Nestlé Toll House decided to open its very own cafés across the nation in the early 2000s, it seemed like it would be a very profitable move (per Nestlé Toll House Café by Chip). Aside from many Americans already trusting its brand, the Nestlé Toll House Cafés by Chip were bakeries and coffee shops wrapped into one restaurant. So their menus had more to offer consumers than just Toll House's iconic cookies. However, despite the company's customer loyalty and its cafés' range of coffee, baked goods, and even lunches, Nestlé was not able to salvage its line of restaurants. Here's what happened to the most beloved U.S. cookie brand's most unsuccessful business venture.

When they first set up shop in 2000, Nestlé Toll House Cafés by Chip initially proved to be very successful. By 2008, QSR Magazine reported the company had opened its 100th franchise. In 2014, FranchiseWire interviewed the company's CEO about its ongoing growth and popularity. However, Restaurant Business states that the cafés' revenue sharply decreased in the last few years. Eat This, Not That explains that because a lot of the café locations were situated in malls, their failing financial status coincided with the decrease in mall shoppers. And when 2021 rolled around, Nestlé Toll House Cafés' total sales had fallen by a quarter, per Restaurant Business. 

Aside from its revenue problems, the brand was also dealing with legal issues. As reported by Eat This, Not That, Nestlé was in a court battle with the company that licensed it, Crest Foods, for five years. In the end, the licensing agreement between the cookie company and Crest was terminated.

While Nestlé has faced and overcome business complications before, like when its ready-to-bake cookies were recalled, between its financial and legal issues, Nestlé Toll House Cafés proved to be unsalvageable. Restaurant Business reports that Nestlé has officially sold the cafés to Fat Brands, which has decided to scrap the franchise entirely. All traces of the cafés will be replaced by a different chain owned by Fat Brands, another mall-centric franchise known as Great American Cookies.