Tous Les Jours Franchise Has a Low Failure Rate & High AUV (2024)
Tous Les Jours franchise is a South Korean-style bakery owned by CJ Foodville. Although it is a South Korean-style bakery store, its name is inspired by French, meaning “every day.” This French-Asian-Fusion bakery franchise has attracted millions of customers worldwide, with more than 1631 stores operated globally.
Tous Les Jours was first established in Guri, South Korea in 1997. It immediately began mass production and distribution after two months and started franchising one year later. In 2004 and 2005, Tous Les Jours opened its first store in the United States and China, respectively. Since then, it has expanded to multiple countries, including Vietnam, Malaysia, and Cambodia.
Tous Les Jours Franchise in the Food and Beverage Industry
The food and beverage industry is a significant contributor to regional economies and to the U.S. economy. It is a stable industry in terms of employment and labor income due to the consistent demand for food. The food and beverage sector accounts for about 5% of gross domestic product (GDP), 10% of total U.S. employment, and 10% of U.S. consumers’ disposable personal income (DPI). It has total sales of $1.4 trillion, of which $164 billion in value-added is generated by the food and beverage industry alone.
Food and beverage franchises are often the first things people correlate within the franchise industry. Food & Beverage is certainly one of the most popular areas of franchising. Although food franchising is often associated with fast food, the industry also includes fast-casual, coffee, and pizza. Of the food and beverage concepts we have reviewed, total investment amounts can start as low as $3,000 for smaller kiosk concepts all the way up to $6,732,615 for a full-service restaurant.
Tous Les Jours Franchise Cost
The total investment necessary to begin the operation of a Tous Les Jours franchise business ranges from $718,230 to $938,894, which includes the initial franchise fee of $40,000 that must be paid to the franchisor. Additionally, potential franchisees have the opportunity to become area developers, where the initial amount of investment of a Tous Les Jours is the same as individual franchisees, while the total estimation will vary based on the number of restaurants to be developed so that there is no minimum number of outlets required to be opened under a development agreement.
Once the operations begin, franchisees are expected to pay the company a royalty fee of 5% on gross sales and a marketing fee of 2% on gross sales.
How Much Do Tous Les Jours Franchise Owners Make?
Tous Les Jours does not provide comprehensive financial performance of its franchisees, we obtained an estimation of its global sales of $696,794,944 and a total of 1,631 units globally from Franchise Times. Thus, the average sales per franchised location are $427,219 globally. The average sales of the top 10 stores in 2022 was $3,583,556. And the U.S. locations had average yearly sales of $ 1.7 million in 2022!
| Initial Investment (midpoint) | %Profit margin of average franchise sales | Estimated profits | Time to recoup investment |
|---|---|---|---|
| $720,562 | 15% | $225,000 | 6 years |
| $720,562 | 20% | $300,000 | 3.5 years |
| $720,562 | 25% | $375,000 | 2.5 years |
Based on the average sales provided by Tous Les Jours franchise locations, at a 20% profit margin, it will take around 3.5 years to recoup your investment, including 1.5 years to reach the breaking point of starting the operation and generating significant income. This is a relatively short payback period compared to other franchises in a similar industry. You may not get a 20% profit margin which would elongate getting a return on your investment.
Tous Les Jours Franchise: Is the Profit Worth the Franchise Cost?
Based on our evaluation, the resale price for a single Tous Les Jours is 4 times the estimated profits. If you own a single unit of Tous Les Jours and a profit margin of 20%, the unit could sell for $1,200,000, which represents a nice gain on the midpoint investment of $720,562. Additionally, Tous Les Jours franchise owners who operate a multi-unit system can sell the system at 5-7 times the estimated profits. So, if you had 5 Tous Les Jours franchises, this would be $1,500,000+ per store, which is an even better gain!
| State | Year | Outlets at Start of Year | Outlets Opened | Terminations | Non-Renewals | Reacquired by Franchisor | Ceased Operations – Other Reasons | Outlets at the end of the Year |
|---|---|---|---|---|---|---|---|---|
| Totals | 2020 | 58 | 4 | 0 | 0 | 0 | 0 | 62 |
| 2021 | 62 | 10 | 0 | 0 | 0 | 1 | 71 | |
| 2022 | 71 | 14 | 1 | 0 | 0 | 0 | 84 |
We can see that Tous Les Jours is robustly growing across three years, with only one franchised location ceasing operations in 2021. Every year, there were a steady number of new franchisees joining the business, even during the COVID-19 pandemic, proving it a viable business model. In 2022, 41 franchisees signed the contract and there were 26 projected franchise locations.
Conclusion
Tous Les Jours positions itself in the bakery industry, with a special “French-Asian-Inspired” style. Although it opened its first store in 2004 in the United States, there are currently 93 stores and is waiting for more prospective franchisees. The failure rate is promising and the short payback period makes this an attractive option for prospective restaurant franchisees. However, future franchisees should look for current franchisees for more financial information because the FDD does not disclose any numbers regarding the performance of current franchisees.
