Are you interested in franchising a Taco Bell, but have no idea what a Taco Bell franchise costs? And where exactly do you start if you want to own a Taco Bell franchise? This guide will give you the low down on the REAL Taco Bell franchise cost to set you on the path to franchise ownership.
Most Americans turn to Taco Bell for their Mexican food fix. In fact, a recent poll named the fast-food chain as America’s Favorite Mexican Restaurant. Indeed, the restaurant chain has gone far since Glen Bell first started serving tacos at its first location in 1962 in Downey, California. Today, the global brand is a subsidiary of Yum! Brands, the same company that franchises Pizza Hut and KFC.
Taco Bell has more than 7,000 restaurants across the states and serves over 40 million patrons every week. Now that’s a lot of nachos, tacos, quesadillas, and cinnamon twists! And because of its immense popularity, it’s no wonder why many entrepreneurs see the potential in the brand and want to be a part of it.
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How Much Does a Taco Bell Franchise Cost?
But how much exactly does a Taco Bell franchise cost? The initial investment required falls somewhere between $570,600 and $3,049,100. Bear in mind, however, that these amounts only cover the costs needed to operate for the first three months. So, aside from what you need to set up shop, there are other fees not included in this estimate.
The cost varies depending on the facility you’re planning to get a franchise for. For instance, Traditional Units, come with a heftier price tag. These are restaurants in free-standing, permanent buildings with a kitchen, customer seating, and possibly, a drive-thru. On the other hand, In-Line Locations, with or without a drive-thru, will cost a bit less.
Initial Cost Breakdown
The table below shows the Taco Bell franchise cost breakdown based on their 2020 FDD.
Name of fee
Low
High
Application and Background Check Fee (per person)
$350
$600
Initial Franchise Fee
$25,000
$45,000
First Unit Construction Services
$22,250
$27,250
Optional Real Estate Services
$0
$37,250
Permits, Licenses, Security Deposits
$74,000
$74,000
Real Property
$20,000
$1,400,000
Building/Site Construction
$177,000
$1,000,000
Equipment/Signage/Decor/ POS
$200,000
$390,000
Initial Inventory
$7,000
$10,000
Grand Opening Expense
$5,000
$5,000
Additional Funds – 3 months
$40,000
$60,000
Estimated Total
$570,600
$3,049,100
Aside from the items listed above, there are also additional fees that are proportionate to the franchise profit margin. For example, the Period Franchise Fee amounts to 5.5% of the unit’s gross sales. On the other hand, the Period Marketing Fee costs 4.25% of the unit’s gross sales.
A franchisor would also have to cover other finance components such as Back of House and Support Services ($2,034 per year) as well as the Front of House and Support Services ($1,590 per year).
In addition to that, they also have an additional trainee fee of $350 per person, with the cost of training materials to be established by the franchisor. Their FDD has a full list of other fees franchisees might need to settle.
How Do I Start a Taco Bell Franchise?
The first step to getting a franchise is going to their website and filling out an application form, whether you’re eying a business opportunity in the US or abroad.
Aside from your personal data, the form also requires basic info to know if you’re a good fit for the franchise. For instance, they’ll ask how much in liquid assets do you or your partnership have access to for investment.
In addition to that, you’ll also need to disclose if you have a quick-service restaurant (QSR) experience and if you’re currently a multi-unit franchisee.
Before they consider you as a franchisee, they’ll run background as well as financial checks to see if you’re qualified. If you’re approved, then Taco Bell with contact you, and you can start talking about franchise requirements.
While waiting for approval or even before applying for a franchise, it’s best that you study your market viability. For instance, where’s the best location to put the restaurant? And are there strong competitors already reigning supreme over the area you’re eyeing?
By assessing the market ahead of time, you can think of options and make informed decisions later if and when (fingers crossed) your application gets approved.
