Thinking of Franchising a Taco Bell? Here’s How

Franchising is a fast and lucrative way to make money in 2024. It requires minimal effort to set up shop and offers fewer risks than establishing a business from scratch. Franchisees will also get support from the franchisor, including marketing, advertising, and branding. Of all the industries to franchise, fast-food chains are always a good idea, especially if you choose a well-known company. The Taco Bell franchise is a smart choice. It has been selling franchises since 1964 after launching its first store in Downey, California, in 1962. If you’re considering franchising a Taco Bell chain, here’s what you need to know.

Company Overview

Taco Bell’s history in the fast-food market began in the mid-20th century. Since its inception in 1962, the popular fast-food chain has served affordable Mexican dishes, such as tacos, burritos, quesadillas, tostadas, and desserts. The founders have innovated their menu over time and now offer vegetarian options. 

Taco Bell Franchisor, LLC, the franchisor, grants non-exclusive rights to all franchisees, allowing them to use tradenames, trademarks, logos, symbols, intellectual property, and trade secrets. Taco Bell gained popularity through its approach to fast food. Its unique flavors have gained popularity in various regions in the United States. 

If you’re planning to franchise a Taco Bell store, you can choose between four different franchise types:

• Traditional units: This is a traditional Taco Bell franchise where franchisees build permanent brick-and-mortar stores with a full Taco Bell menu. 
• Express units: Taco Bell Express units are scaled-down versions of the said franchise. These stores offer fewer menu options and may be part of a larger permanent building. 
• Gas station units: As the name suggests, gas station units refer to Taco Bell franchises within convenience stores and gas stations. 
• In-line units: These are stores with or without a drive-thru. Meanwhile, franchises with a drive-thru are called “End-Caps.”

Franchise Training Details

Taco Bell training consists of classroom, web-based, e-learning, or on-the-job training. 

• The franchisee and one manager must complete training according to the franchisor’s standards.
• The training program lasts seven weeks and may be extended up to eight as needed. 
• The franchisor offers advice and assistance in operating the franchise and may conduct regular visits via representatives. 

Franchise Territory

The franchisor grants non-exclusive rights to franchisees and doesn’t provide territorial protection. However, Taco Bell may give exemptions in some transactions on a temporary setup. 

Franchise Obligations and Conditions

• Franchisees must monitor the franchise’s daily operations full-time and with their best efforts.
• If the franchisee appoints a supervisor, the supervisor must complete training satisfactorily and manage the unit full-time.
• Franchisees or a designated manager must live within a specific driving distance from the store unless stated otherwise in the Franchise Agreement. 
• Franchisees are not to incorporate other Mexican-style menus or items from other chains or restaurants. 
• Franchisees must only offer and sell menu items stipulated in the manual.

Franchise Term and Renewal

The initial term of a Taco Bell franchise is 25 years for a traditional store unit. Gas station or convenience store units franchise is 20 years and 10 years for in-line or end-cap units. 

The franchisor doesn’t grant renewal rights to franchisees unless they open an in-line unit 10+10 addendum, which gives them a 10-year successor term under specific conditions. 

Taco Bell’s Franchise Agreement Expiration Policy is subject to cancellation or modification at any time. Both parties may agree to write a new agreement lasting 10 to 25 years. 

Financial Assistance

Taco Bell’s parent company, Yum, may offer lender suggestions willing to extend financial assistance to franchisees. However, this is not endorsed by the franchisor in the financing agreement. The financial assistance terms are agreed between the franchisee and lender. 

Did You Know?

Here are some interesting facts about Taco Bell:

• Glen Bell opened the first Taco Bell store in Downey, California, in 1962. 
• In 1978, PepsiCo acquired 848 Taco Bell units for $125 million. 
• The “Run for the Border” marketing campaign was one of the most significant milestones in Taco Bell’s history. It was used for six years, from 1988 to 1994, before decommissioning. 
• The “Doritos Locos Tacos,” made from Doritos tortilla chips, was a major hit in 2012 and showed the brand’s willingness to innovate and partner with other popular snack brands. 

Taco Bell Franchise Cost

Your Investment

Other Fees

For more details, visit Taco Bell’s official website. If you’re looking for other franchise opportunities, check out FranchiseHow’s website.