La Madeleine Franchise Costs, Fees & Owner Salary (2023)

Initial Franchise Fee ($40,000)

‍The initial franchise fee for a La Madeleine franchise is $40,000. This fee compensates La Madeleine for the rights granted to the franchisee. The Initial Franchise Fee is deemed fully earned upon receipt by the franchisor and is non-refundable.

Royalty Fee (5%)

‍Franchisees are required to pay a royalty fee equal to five percent (5%) of the Gross Sales of the Café on a weekly basis. The royalty fee is nonrefundable and must be paid weekly via a mandatory direct debit program established with the franchisee's bank.

Advertising Fee (4.0%)

‍During the Agreement Term, franchisees have a weekly advertising obligation (WAO) in an amount not to exceed 4.0% of their Gross Sales. This advertising obligation can be allocated among contributions to the Brand Marketing Fund, expenditures for Local Store Marketing, and contributions to a Cooperative.

The Brand Marketing Fund contribution is currently set at a rate of up to 3.0% of Gross Sales, with an initial contribution of 2.0% of Gross Sales. La Madeleine has the discretion to increase this percentage by up to 0.25% per calendar year, but not to exceed 3.0% of Gross Sales.

For those interested in franchising with La Madeleine, there are two primary options available. The first is the "Bakery Café" Prototype, which requires an estimated initial investment ranging from $1,042,858 to $3,053,595. This model encompasses various costs, including an initial franchise fee of $40,000, design and permitting fees, and more.

On the other hand, the "Express Café" Prototype offers a different scale of operation, with the initial investment estimated between $369,677 to $754,822. This model includes an initial franchise fee that ranges from $20,000 to $40,000, among other associated costs.

Detailed breakdown for the initial investment for La Madeleine "Bakery Café" Prototype can be found in the table below:

Stepping into the world of La Madeleine offers a chance to be part of a brand that brings the charm of French cuisine to the table. Their commitment to franchisee success is evident in their detailed training and support structure. Here's what they offer:

Training Program: La Madeleine has a comprehensive training program designed to ensure franchisees are equipped with the necessary knowledge and skills to operate their cafe.

Who Needs to Attend: The franchisee's designated General Manager and up to three other management personnel are required to complete La Madeleine's management training program.

Training Content: The program covers essential topics for running the cafe, including sales techniques, product orientation, accounting procedures, food preparation, and operations management.

Location and Duration: Training is conducted at designated La Madeleine locations. The duration is approximately 3–4 days, encompassing discussions on the system, techniques, procedures, methods of operation, ordering, accounting, support procedures, and instructions on quality standards.

Training Expenses: While La Madeleine provides the initial training program for the franchisee's designated General Manager and three other management personnel, franchisees are responsible for personal travel, accommodation, and other costs while attending training.

Franchisees do not receive an exclusive territory. They are granted a geographical area known as the "Protected Territory". Within this Protected Territory, La Madeleine commits not to establish or grant a new franchise for the operation of a La Madeleine Restaurant.

However, deliveries of goods, even if done by a third-party delivery service, to a customer located within the franchisee's Protected Territory from a La Madeleine Restaurant situated outside of the Protected Territory are not considered a violation of the franchisee's territorial rights.

Franchisees may face competition from other franchisees, from outlets that La Madeleine owns, or from other channels of distribution or competitive brands controlled by La Madeleine.

The La Madeleine franchise model is designed with a clear emphasis on maintaining its brand standards and reputation. While there's an allure to the idea of a passive investment, La Madeleine's approach requires more hands-on involvement.

If you're thinking of investing, you'll need to appoint a "Lead Operator" who is approved by the franchisor. This individual is crucial in ensuring the franchise operates in line with the brand's values.

So, can the franchise be run as a purely passive investment? Not exactly. While you can delegate daily operations to an acting manager, active oversight is essential.