Taco Johns
Taco Johns offers Mexican cuisine in various restaurant formats, from traditional freestanding locations to digital outlets. Known for quick service and carry-out options, it operates in multiple states across the U.S., fitting into the fast-casual dining sector.
About Taco Johns
Taco John's International, Inc. is an American fast food restaurant. The chain serves Mexican-inspired fast food as well as the company's signature dish, Potato Olés, which are bite-sized deep-fried potato nuggets coated with a proprietary blend of seasonings. Since 2025, the company has been headquartered in St. Louis Park, Minnesota.
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Taco Johns franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment for a freestanding traditional restaurant ranges from $1,365,000 to $2,120,000. For an endcap traditional restaurant, it ranges from $805,000 to $1,342,000. The cost for a DT Digital Olé traditional restaurant is between $985,000 and $1,745,000. Non-traditional restaurants require an investment ranging from $390,000 to $632,000. This includes the initial franchise fee of $15,000 to $40,000 [p.2].
What is the initial franchise fee?
The initial franchise fee for a single traditional Taco John's Restaurant is $40,000 [p.15]. This fee is payable in full upon signing the Franchise Agreement and is non-refundable once paid [p.14]. Additionally, $5,000 of the Development Fee will be applied toward this initial franchise fee when developing a new restaurant under an Area Development Agreement [p.148].
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is calculated as 5% of franchise restaurant sales [p.203], but this rate will change starting in 2025; it will be 0.75% from January 1, 2025, then increase to 1.1%, 1.15%, and 1% for the years 2026, 2027, and 2028 respectively [p.206]. Advertising fees are calculated as 1.15% of franchise restaurant sales and are considered variable consideration related to the management of the advertising and marketing fund contributions [p.203].
How long is the initial franchise agreement, and can I renew it?
The duration of the initial franchise agreement isn't specified in the excerpts. However, you are allowed to renew the franchise, provided that you give written notice at least 12 months prior to its expiration [p.84(i)]. The renewal process involves executing a new form of standard Franchise Agreement with potentially different fees but no Initial Franchise Fee [p.84(vi)].
Can I sell or transfer my franchise, and what does that require?
You cannot transfer your ownership of the franchise without the franchisor's advance written approval. The franchisor may refuse a transfer if the proposed transferee does not meet their current reasonable qualifications for new franchisees, which are based on legitimate business reasons [p.109]. Good cause for refusing a transfer includes but is not limited to unspecified factors [p.6].
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the franchise agreement if there is good cause, such as the failure of the franchisee to comply with any lawful provisions of the franchise agreement and failing to cure such failure after being given written notice and a reasonable opportunity to do so [p.6]. This isn't specified in the excerpts for other grounds.
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts. The FDD does not provide details on specific net worth or liquid capital requirements for qualifying as a franchisee.
Do I get an exclusive or protected territory?
No, you do not receive an exclusive territory. Your Protected Territory is not considered an exclusive territory, and you may face competition from other franchisees, outlets owned by the company, or other competitive brands that the company controls [p.55]. However, you have a right of first refusal to open a restaurant in certain areas outside your Protected Territory if another franchisee or the company plans to do so [p.54].
What training and ongoing support does the franchisor provide?
The franchisor provides access to an online learning management system called The Olé! Way for ongoing training [p.88]. Additionally, before opening a restaurant, franchisees may be required to complete an Owner Training Program (OTP) prior to Initial Training, which includes classroom instruction and operational training [p.39, p.87]. Franchisees also receive pre-opening services such as training, the right to use the franchisor's intellectual property, management of advertising funds, development of training materials, menu items, and restaurant monitoring [p.203].
How many franchised outlets are there, and how many have closed or been terminated?
As of December 31, 2024, there were 333 franchised Taco John's Restaurants in the system [p.66]. During the year 2024, a total of 30 franchised restaurants closed [p.67].
Does the franchisor share any financial performance or earnings information?
Yes, the franchisor may provide financial performance information. According to [p.64], this can include actual records of existing outlets you are considering buying, or supplements to the information provided in Item 19 under certain conditions. However, [p.68] notes that other than the specified financial performance representation, no additional financial performance representations are made by the franchisor or its representatives.
What am I restricted to selling, and where must I buy supplies?
You are required to sell only the products and services included in the 'Core Menu' and any others approved by Taco John's. You must purchase certain kitchen equipment and supplies from approved suppliers as specified [p.33]. Additionally, you must buy all food products, beverages, menus, paper and plastic products, packaging, and utensils from distributors and suppliers approved by Taco John's [p.35].