Franchise Deep Dive: Taco Bell Franchise Costs, Fees, Profit and Data

This fast-food staple has come a long way since its humble beginnings.

By Victoria CampisiStaff Writer

Updated 9:09AM • 01/09/23

LAST UPDATED: 1/2024

FRANCHISE WEBSITE: https://www.tacobellfranchise.com/

NUMBER OF LOCATIONS: 7,200+

REPORTED COST TO GET IN: $227,500–$3,370,100.

REPORTED ROI (Item 19): N/A

Taco Bell is a Mexican-inspired fast-food restaurant owned by Yum! Brands International. The company was founded in 1962 by Glen Bell, a former veteran from San Bernardino, California. Once just a simple food cart, the now versatile concept has expanded its footprint and menu at thousands of locations in the United States and abroad.

Taco Bell serves a variety of Mexican-inspired and Tex-Mex items, including tacos, burritos, quesadillas and nachos, as well as specialty limited-time offerings such as its famous nacho fries. It has also become known for its vegetarian-friendly menu due to its customizable offerings and partnerships with the plant-based brand Beyond Meat.

As of 2020, it was reported that Taco Bell serves over two billion customers each year and over 45 million customers daily.

How Many Locations Are There?

Taco Bell and its more than 350 franchise organizations operate over 7,200 restaurants in the U.S. Internationally, the brand is growing with more than 1,000 restaurants across over 30 countries across the globe.

Taco Bell started franchising in 1964 when Kermit Becky, a retired L.A. policeman, opened his own Taco Bell in Torrance, California. Taco Bell became a subsidiary of Yum! Brands (an American fast-food corporation that owns other restaurant franchises like Pizza Hut and KFC) in 1978 and now has locations in about 30 countries.

Taco Bell saw over 3% growth from 2019 to 2020, and over the three years prior, they had grown more than 10%. In 2023, the brand said that it's on track to operate 10,000 U.S.-based restaurants in the coming years.

"Taco Bell is growing for good. Each time a new restaurant opens, we treat it as an opportunity to do better for fans, team members and our franchise partners," Scott Mezvinsky, managing director, North America, said in a press release. "Our secret sauce is our constant innovation paired with our incredible franchisee partnerships, which unlocks our profitable growth and further expansion.”

In the expansion, Taco Bell plans to grow its Go Mobile units, which first opened in El Paso, Texas, in early 2023. The Go Mobile format is a smaller Taco Bell unit that utilizes more digital touchpoints than other Taco Bell designs.

Outside of its restaurants, fans can access Taco Bell through the mobile app, desktop on Ta.co and delivery through a partnership with Grubhub. Taco Bell was one of the first QSR brands to launch a mobile app in U.S. restaurants for both drive-thru and dining orders.

What Is the Business Model?

The Taco Bell business model varies based on the type of unit a franchisee opens, but the brand’s menu is widely consistent throughout all operations.

There are four business models available to Taco Bell franchise owners:

Traditional Units: These free-standing, permanent buildings of various sizes and configurations offer the full Taco Bell menu. The buildings include a kitchen where food is prepared, a counter for taking orders and delivering food, tables and seats for customers and, most of the time, an automobile drive-thru.
In-Lines: May or may not have a drive-thru that also includes the features included in Traditional units.
Power Pumpers: These buildings have several of the above features and also share a facility with a gas station and convenience store.
Taco Bell Express (Custom Facades): Express locations include less elaborate facilities and offer a limited selection of the items found in the full Taco Bell menu. Also referred to as Custom Facades, these include stand-alone units constructed on sites within larger buildings.

How Much Can Taco Bell Franchise Owners Make?

Taco Bell has not disclosed any data about its locations. The below figures are estimates based on their financial figures.

Traditional Taco Bell locations: In 2021, 6,799 units made $11 billion in sales, amounting to an Average Unit Volume (AUV) of $1,617,884.
Taco Bell does not provide any information on Express units.

How Much Does it Cost to Open a Taco Bell?

The estimated total investment necessary to open a Traditional Taco Bell Franchise ranges from $1,298,600 to $3,370,100 and $227,500 to $590,100 for an Express franchise, according to Vetted Biz. Additionally, Taco Bell requires potential franchisees to have a net worth minimum of around $1.5 million in assets and cash liquidity of around $750,000.

The initial investment to open an Express restaurant includes:

Initial Franchise Fee: $22,500
Background Check Fee: $350-600 per person
Initial License Fee: $22,500
First Unit Design Services Fee: $2,000-$5,000
Land-First month’s rent: $2,100- $4,5000
Architectural Fees: $1,500-$25,000
Equipment Start-Up: $1,000-$10,000
Equipment and Decor: $150,000-$230,000
Buildout and Construction: $250,000-$200,000
Signs: $1,000-$14,000
Shipping and Tax: $1,600-$15,000
Cash Control Systems: $7,000-$25,000
Deposits, Business, License, Permits: $500-$10,000
Initial Inventory: $3,000-$8,500
Additional Funds: $10,000-$20,000

The initial investment to open a Traditional restaurant includes:

Background Check Fee: $350-600 per person
Initial Franchise Fee: $45,000
First Unit Construction Services: $27,250
Optional Real Estate Services: $0-$37,250
Permits, Licenses, Security Deposits: $74,000-$125,000
Real Property : $175,000-$1,400,000
Building/Site Construction: $550,000-$1,200,000
Equipment/Signage/Decor/POS: $375,000-$460,000
Initial Inventory: $7,000-$10,000
Grand Opening Expense: $5,000

There are ongoing fees associated with being a Taco Bell franchisee, including a royalty fee of 5.5% of sales, a marketing and advertising fee of 4.25%.

What Is the Franchise Fee for Taco Bell?

The franchise fee for a Traditional franchise is $45,000, while the franchise fee for an Express location is $22,500.

Who Are the Leaders of Taco Bell (Yum! Brands)?

What Helpful Articles Can I Read to Learn More About Taco Bell?

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