Taco Bell
Taco Bell offers affordable Mexican-style food in traditional and inline/end-cap units. Known for its value-driven menu, the brand operates in the quick-service restaurant sector.
About Taco Bell
Taco Bell Corporation, doing business as Taco Bell, is an American multinational chain of fast food restaurants founded in 1962 by Glen Bell (1923–2010) in Downey, California. Taco Bell is a subsidiary of Yum! Brands, Inc., who are also the owners of sister brand KFC. The restaurants serve a variety of Mexican-inspired foods, including tacos, burritos, quesadillas, nachos, novelty, and specialty items, and a variety of "value menu" items. As of 2023, Taco Bell serves over two billion customers each year, at 8,212 restaurants, more than 94 percent of which are owned and operated by independent franchisees and licensees.
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Taco Bell franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment for opening a new Traditional Unit ranges from $1,859,750 to $4,310,200, while for a new In-Line or End-Cap, it ranges from $934,750 to $1,815,200. This includes the initial franchise fee and other required payments as specified in the excerpts [p.1].
What is the initial franchise fee?
The initial franchise fee varies depending on the type of unit. For a new Traditional Unit, it is $45,000, while for an In-Line or End-Cap unit, it is $25,000 [p.14]. However, there are circumstances under which this fee can be waived or reduced [p.23, p.488].
What are the ongoing royalty and advertising fees?
The ongoing royalties typically amount to 5.5% of sales for traditional units and 10% of sales for non-traditional units, paid each period [p.330]. Advertising contributions are included in these ongoing fees; if certain conditions are met, the franchisee may receive a one-time $25,000 cash payment and have their advertising contribution waived for subsequent periods [p.496, p.497].
How long is the initial franchise agreement, and can I renew it?
The initial term of the franchise agreement is typically 10 years [p.124]. At the end of this term, a franchisee may request a successor franchise agreement, but TBC as manager has sole discretion to grant such an agreement [p.329]. This isn't specified in the excerpts regarding renewal rights or terms beyond the initial 10-year period.
Can I sell or transfer my franchise, and what does that require?
According to the FDD, the franchisor may refuse to permit a transfer of ownership of a franchise except for good cause [p.342]. Good cause includes but is not limited to unspecified factors. This means you cannot freely sell or transfer your franchise without the franchisor's approval, which can be granted or withheld based on certain criteria.
On what grounds can the franchisor terminate the agreement?
The franchisor may terminate the franchise agreement on any grounds available by law [p.345].
What financial requirements — net worth and liquid capital — do I need to qualify?
Based on the provided excerpts, there is no specific mention of minimum liquid capital requirements. However, the Company must maintain a minimum of $15 million in net worth to qualify for the large franchisor exemption under certain U.S. state franchise registration laws [p.328]. This isn't specified in the excerpts regarding liquid capital requirements.
Do I get an exclusive or protected territory?
No, you do not receive an exclusive territory under the Franchise Agreement. The agreement does not provide territorial protection or exclusivity [p.47], and you may face competition from other franchisees or licensees, as well as other channels of distribution or competitive brands controlled by the franchisor [p.47].
What training and ongoing support does the franchisor provide?
The franchisor requires you and one manager to complete a minimum 7-week management training program, which can extend to 8 weeks depending on the restaurant's size and location. This includes web-based or e-learning, as well as on-the-job and classroom training. The franchisor also provides ongoing support related to required Computer and Information Technology hardware, though additional fees may apply for non-mandatory training courses [p.28].
How many franchised outlets are there, and how many have closed or been terminated?
This isn't specified in the excerpts. The provided FDD does not give a specific number of franchised outlets or the exact count of those that have closed or been terminated.
Does the franchisor share any financial performance or earnings information?
The franchisor does not make any representations about future or past financial performance for any company-owned or franchise Units [p.61]. However, if an existing Unit is being purchased, the franchisor may provide actual records of that specific Unit's performance [p.61]. Additionally, the franchisor cannot use negotiation to offer terms less favorable than those set forth in the Franchise Disclosure Document [p.345].
What am I restricted to selling, and where must I buy supplies?
You are restricted to selling only the food, beverages, and other products described in OneSource. You must also purchase or lease all required items according to specifications from suppliers approved by the franchisor [p.28]. This includes furniture, fixtures, equipment, smallwares, food, and paper products [p.3].