Tom n Toms Coffee Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$370,400 - $487,300
Franchise Fee
$15,000
Total US Locations
12
Business Summary
Tom N Toms Coffee operates specialty coffeehouses that prepare and sell premium coffee products along with complementary food and beverages. Franchisees establish and run these coffeehouses in approved locations such as strip shopping centers, malls, or free-standing units. The brand offers both single-unit franchises and area development franchises for opening multiple locations.
Corporate History
Tom N Toms Franchise, LLC was formed as a California limited liability company on January 30, 2012, and began offering its franchises in March 2012. It is a wholly-owned subsidiary of Tom N Toms USA, Inc., which was formed earlier on February 28, 2008. The company has three affiliates that operate Tom N Toms Coffeehouses: TNT Wilshire One, LLC, formed in August 2011 and opened its location in December 2011; TNT Waa Waa Plaza, LLC, formed in November 2011 and opened its location in June 2012; and TNT Vantage Point, LLC, formed in August 2013 and opened its location in May 2014.
Financial Overview
Investment Range
$370,400 - $487,300
Franchise Fee (Low)
$15,000
Franchise Fee (High)
$30,000
Royalty %
4%
Equipment Costs (Low)
$290,000
Equipment Costs (High)
$372,000
Working Capital
$22,500
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
The audited financial statements for Tom N Toms Franchise, LLC show an unqualified opinion from the independent auditors, indicating that the financial statements present fairly, in all material respects, the company's financial position as of December 31, 2023, and its results of operations and cash flows. No going concern issues or other specific financial health concerns were noted in the auditor's report or financial notes.
Financing Details
Tom N Toms Franchise, LLC does not provide any direct or indirect financing to its franchisees. Franchisees are responsible for securing their own funding for the initial investment and ongoing operations.
Performance Metrics
Total US Locations
12
Franchised Units
12
Corporate Units
0
Avg Square Footage
1,750
Franchising Since
2012
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Count
1
Litigation Summary
Tom N Toms Franchise, LLC faced administrative actions from the California Commissioner of Business Oversight in May 2016. The allegations included making untrue statements, using an unregistered franchise seller, and failing to disclose material facts. Tom N Toms Franchise, LLC denied these claims, asserting the complainant was a former franchisee who had defaulted on their agreement. Without admitting wrongdoing, Tom N Toms Franchise, LLC settled the case in November 2016. The settlement required them to pay $15,000 in restitution to the complainant franchisee, $7,500 in penalties, and $14,700 for the Commissioner's attorney fees and costs. The franchisor also agreed to stop franchise activity until properly registered and ensure franchise sellers completed eight hours of remedial education. Tom N Toms Franchise, LLC has since complied with all obligations of this settlement. There is no other litigation to report.
Bankruptcy History
Tom N Toms Franchise, LLC has no bankruptcy history to disclose.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew their Tom N Toms Franchise Agreement, franchisees must have substantially complied with all terms throughout the initial period and any prior renewals. They need to provide notice between 12 and 18 months before the agreement expires. Franchisees must also make any required improvements, modifications, and repairs to their coffeehouse, which could involve remodeling and structural changes up to $70,000, to meet current brand standards. All monetary obligations to Tom N Toms Franchise, LLC and its affiliates must be satisfied. Upon renewal, franchisees are required to sign Tom N Toms Franchise, LLC's then-current Franchise Agreement, which may have different terms, including potentially higher royalty and advertising fees. They must also sign a general release of claims against Tom N Toms Franchise, LLC and its associates and meet the franchisor's current qualification and training requirements. Finally, a renewal fee equal to half of the then-current initial franchise fee must be paid.
Training & Support Program
Franchisor Assistance
Tom N Toms Franchise, LLC provides extensive support to its franchisees. Before opening, they offer site selection criteria, assistance with purchasing equipment and supplies, and mandatory specifications and layouts for the coffeehouse design, including kitchen layout and decor. Franchisees receive initial training for themselves and their managers and a copy of the Confidential Operations Manual. Assistance with the grand opening, including a representative on-site for up to seven days, is also provided. After opening, Tom N Toms Franchise, LLC offers ongoing guidance on operating issues, system standards, new recipes, purchasing, advertising approval, and conducts periodic inspections. They administer an advertising fund, offer advanced and refresher training, and regularly update the Operations Manual. Franchisees can also consult with Tom N Toms Franchise, LLC representatives by telephone during business hours for operational advice.
Initial Training Hours
89
Training Location
Corporate Training Facility in Los Angeles, California, or other designated locations
Ongoing Support
After opening, Tom N Toms Franchise, LLC provides ongoing guidance and advice on operating issues, system standards, specifications, and operating procedures. This includes information on new recipe items, menu variations, food preparation and display methods, and purchasing requirements. They also offer guidance on advertising and marketing programs, employee training, and administrative, bookkeeping, and accounting procedures. Tom N Toms Franchise, LLC reviews and approves franchisee-prepared advertising materials, inspects coffeehouse operations, and administers the advertising fund. They provide ongoing training, offer advanced and refresher courses for managers, and periodically update the Operations Manual. Franchisees also have access to telephone consultation services from Monday through Friday during business hours.
Franchise Requirements
Ideal Candidate Profile
Tom N Toms Franchise, LLC seeks franchisees who are individuals willing to devote full-time attention to supervising all administrative and operational activities of their coffeehouse. If the franchise is owned by a legal entity, the person with a controlling interest must also devote full-time attention to franchise activities. Franchisees must ensure their Tom N Toms Coffeehouse is staffed with at least one 'Approved Manager' who is a full-time employee with management responsibilities and has successfully completed the franchisor's manager training program and any supplemental classes.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
Full-Time
Territory Type
exclusive
Territory Size Requirements
For area development, Tom N Toms Franchise, LLC defines development areas typically by municipal or county boundaries, or as a specified trade area, potentially with a radius from a reference location. The minimum size for any development area is 10 square miles. For single-unit franchises, the territory is determined based on whether the location is in a 'Business Zone'. If a Tom N Toms Coffeehouse is in a high-density commercial Business Zone, the territory will be a 0.2-mile radius around the coffeehouse. If not in a Business Zone, the territory will be a 0.5-mile radius from the coffeehouse.
Staffing Notes
Tom N Toms Franchise, LLC requires franchisees to recruit and hire all their employees and to provide training for them. Each Tom N Toms Coffeehouse must have at least one 'Approved Manager' who is a full-time employee with management responsibilities. This manager must have successfully completed the franchisor's initial manager training program and any other mandatory supplemental management classes. The franchisee or the controlling owner of an entity franchisee can serve as the Approved Manager, provided they commit to full-time involvement in the business.