Taco Bell Franchise Startup Cost, Revenue and Profit Margin

When it comes to the Mexican-style QSR franchise, Taco Bell is the name to trust. This is because it has established itself as the leader in the provision of quality restaurant services in addition to creating exciting investment opportunities through its franchising arm.

Whether you’re seeking for the U.S or International franchising opportunities, Taco Bell has you covered.

One of the most important questions asked by prospective franchisees relates to cost. Every franchisee would want to know how much it will cost them to own a Taco Bell franchise. You’ll find all the answers you seek right here. Read on as we discuss Taco Bell franchise cost in addition to other aspects & requirements.

Taco Bell was founded by Glen Bell in 1962. A subsidiary of Yum! Brands Inc. opened its franchising arm two years later and since then has become a global restaurant franchise success. Today, it is ranked number two on Franchise Magazine’s top 500 franchises.

Taco Bell Franchise Cost

We are jumping straight into the focus of our discussion without further delay. Knowing the franchise cost is critical to your investment decisions. This cost consists of several aspects of its operations as you’d find out shortly.

  • Initial Investment

Prospective franchisees are expected to meet the franchisor’s initial investment requirements. This is the total amount you’ll require to open the franchise and depends on the size or number of outlets you require. The initial investment includes other startup expenses that include working capital, equipment, real estate, supplies, and business licenses.

This initial investment sum ranges between $525,525 to $2,956,765. So, how much cost exactly will you be incurring? Well, as mentioned earlier, it depends on your franchise scale.

Typically, larger Taco Bell franchise units will cost more than smaller units. Let’s look at additional cost implications, shall we?

  • Net-Worth Requirement

Taco Bell has a net-worth requirement of $1,500,000. Wonder what this is about? This is the minimum net worth you must have to be considered for this franchise opportunity. It is strictly the value of your assets. Assets could include retirement accounts, cash, real estate, and stocks. However, one thing is clear. Your assets won’t in any way include liabilities.

To be more specific, liabilities such as credit card debt, mortgages, and car payments aren’t included when calculating your net worth. Only assets, not liabilities are used to calculate your net worth.

  • Liquid Cash Requirement

What is the liquid cash requirement? This is the minimum liquid or readily available capital you must-have for your franchise application to be considered or given a serious thought. Taco Bell requires all prospective franchisees to meet its liquid cash requirement of $750,000.

  • Initial Franchise Fee

To join the Taco Bell franchise system, you’ll be expected to first pay a franchise fee ranging from $25,000 to $45,000. Again, the exact fee demanded by the franchisee will be influenced by your choice of franchise size. Additional factors may include territory size or experience among other things.

The finer details of this are provided in the franchise disclosure document which you’ll be given during application. You get to pay this one-time up-front fee at the signing of the contract. This fee is necessary as it gives you the right to use Taco Bell’s business systems, name, and trademarks.

  • Buying Existing Taco Bell

As a prospective franchisee, several options are available to you, one of which is the opportunity to buy an existing Taco Bell. So, how much will it cost you? The cost of an existing outlet can cost as little as $175,000 and as high as $1,400,000. The cost will depend on the size of the outlet or territory covered.

  • Ongoing Fees

Taco Bell’s ongoing fees consist of a royalty fee as well as an ad royalty fee of 5.5 to 4.25%. When broken down to actual amounts to be paid, such ongoing fees will vary based on the size or amount of sales generated from each franchise unit among other factors.

Are There Financing Options?

Taco Bells provides prospective franchisees an opportunity to join its fold through the provision of financing options. This provision is in partnership with its third-party financing sources. What areas of its operations are covered under this financing arrangement? They include equipment and start-up costs.

How Much Can You Make As A Taco Bells Franchisee?

Having discussed the cost implications of joining the franchise, it will be fair to shift our focus a little to the earning potential. Like start-up costs, earnings are largely influenced by several factors. These may range from location, territory covered, franchise size, experience among several things.

On average, your yearly sales should be about $1,400,000.00. It’s important to note that sales can be significantly higher than this amount or lower. It all depends on how dedicated and committed you are to running a successful franchise.

Support

Qualifying as a Taco Bell franchisee gives you a wide range of privileges. The franchisor provides you with support covering several areas of its operations. This is meant to enhance your chances of success. First, you are expected to go through an on-site training process lasting four hundred hours or roughly 16 days.

You also go through additional training at Taco Bell’s headquarters. However, this lasts less long (about 8 hours).

Ongoing training is also provided to all franchisees to enable them to keep up with changing trends. Marketing support is provided by way of national & regional media advertising, social media, SEO, website development, email marketing, and loyalty programs.

Other areas of support include a grand opening ceremony, online support, a toll-free line, newsletter releases, security & safety procedures, site selection, use of its proprietary software and franchise intranet platform among other things.

We’ve seen the different cost implications of joining a Taco Bell franchise. However, there may be other finer details that may not be available but will be fully unveiled once you begin the application process.