Nestle’s Café by Chip franchise to enter P.R. market
When yogurt meets coffee and cake, you get a crowd or the latest franchise concept to hit the island.
Nestle Toll House Café by Chip, a popular stateside franchise of cafes serving coffee and sweets, is being introduced in Puerto Rico by the holders of the Red Mango franchise in a deal where both brands could, in some cases, be sharing the same store location. Each store is expected to generate between 10 to 15 jobs.
“It’s a win-win situation,” said Mario Alverio-Dominguez, CEO of Good for You, Inc., holder of the Red Mango master franchise in Puerto Rico.
For entrepreneurs interested in the co-branding concept, the two-for-one franchise means a higher investment, which Alverio put at between 20 to 25 percent above the cost of a regular Red Mango franchise, which runs between $275,000 and $325,000.
The investment in a Nestle Toll House Café by Chip franchise is between $180,000 and $200,000, he said.
Under the agreement with Crest Foods, which is the Toll House Café by Chip franchisor, Good For You committed to opening 10 units on the island within the next five years. Some of the locations will be co-branded with Red Mango while the rest will be stand-alone and kiosk locations.
Red Mango, a popular chain built around menus featuring yogurt, smoothies and healthy foods under 500 calories, has enjoyed strong growth since its introduction in Puerto Rico three years ago with 12 stores opening to date in San Juan, Ponce, and Mayaguez. Of these, Good For You operates four, while the rest are in hands of private franchisees.
Alverio explained that in stores where Red Mango shares the location with Toll House, each brand will have its own separate space to preserve its own unique identity.
Both are strong brands and, he said, “each can help the other.”
While Red Mango appeals to consumers looking for light nutritious meals featuring fresh and natural ingredients, Nestle Toll House entices consumers who favor occasional indulgences of cakes and cookies. One store can provide two different food options at “an affordable price,” the key element that, according to Alverio, has helped grow the Red Mango brand in spite of the island’s recession.
The idea of creating a collaboration between both these brands first came up last year when Nestle approached Red Mango about the possibility of co-branding. The concept was tried out in five stores in Dallas and New York and proved very successful, Alverio said.
Already there is one co-branded store in Puerto Rico and it’s located at Plaza Carolina. Alverio is confident that the concept will have a good acceptance among consumers and that next year could see the opening of between five to seven stores that are either co-branded or carry the name of either brands.