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Tous Les Jours Low Failure Rate Cannot Justify Long Payback Period (2022)

Written by: Qingyi (Shirley) Cao
Last Updated by Rocio Somoza: November 10, 2022
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Tous Les Jours is a South Korean style bakery franchise 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 1600 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.  

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How is Tous Les Jours Positioned in the Food & 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

What is the Tous Les Jours Franchise Cost?

The total investment necessary to begin the operation of a Tous Les Jours franchise business ranges from $609,980 to $831,144, which includes $32,000 to $32,500 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?

Although 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.  

Initial Investment (midpoint)%Profit margin of average franchise salesEstimated profitsTime to recoup investment
$720,56215%$64,08212 years
$720,56220%$85,4439.5 years
$720,56225%$106,8048.2 years

Based on the average sales provided by Tous Les Jours franchise locations, at a 20% profit margin, it will take around 9.5 years to recoup your investment, including 1.5 years to reach the breaking point of starting the operation and generating significant income. This is relatively a long payback period compared to other franchisees in a similar industry. You may not get a 20% profit margin which would elongate getting a return on your investment.

Is the Tous Les Jours Franchise 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 would sell for $341,772, which is half of the midpoint investment of $720,562. Additionally, Tous Les Jours franchise owners who operate a multi-unit system can sell the system at 7 times the estimated profits. So, if you had 5 Tous Les Jours franchises, this would be $598,101 per store, which is still lower than the initial midpoint investment per store.

StateYearOutlets at Start of YearOutlets OpenedTerminationsNon-RenewalsReacquired by FranchisorCeased Operations – Other ReasonsOutlets at the end of the Year
Totals2019499000058
2020584000062
20216210000171

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, 18 franchisees signed the contract and there were 32 projected franchise locations. 

tous les jours franchise

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 70 stores, and is waiting for more prospective franchisees. Although the failure rate is promising, the long payback period has made it less attractive to potential clients. 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.

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