Taco Bell
Date of Incorporation: 1962
Franchising Since: 1964
Headquarters: California
Country: USA
Description: Taco Bell is a wholly-owned subsidiary of YUM! Brands, Inc. Taco Bell grants non-exclusive rights to a franchisee to operate, utilizing Taco Bell's name, trademarks, trade names, trade, secrets, logotypes, commercial symbols, service marks and other intellectual property, a variety of quick-service consumer feeding facilities presenting various items of inexpensively priced, quality Mexican-style food for take-out and on-premises eating by the general public. Taco Bell operates facilities of the same kind, as well as other types of feeding facilities.
Franchise Offer: The franchisee will operate a Traditional Taco Bell Unit offering inexpensively priced, quality Mexican-style food for take-out and on-premises eating. The different types of facilities for which Taco Bell grants franchises include free-standing, permanent buildings of various sizes and configurations which offer the full Taco Bell menu. The buildings include a kitchen facility where food is prepared and assembled, a counter where orders are placed, paid for and food delivered, tables and seats for customers and, frequently, an automobile drive-through.
Financial Assistance: Taco Bell does not guarantee any note, lease or other obligations. Taco Bell currently does not offer financing arrangements to franchisees. Taco Bell may attempt periodically to identify lenders willing to extend financing to a franchisee. Taco Bell's assistance in identifying lenders is not an approval or endorsement by Taco Bell of any of the lenders or of the financing arrangements. The terms of any such financing arrangements will be agreed upon between the franchisee and the lender and may vary widely.
Training and Assistance: Taco Bell provides a basic restaurant management training program for the franchisee and their restaurant manager. Taco Bell requires that the franchisee, one manager and at least one assistant manager successfully complete its training program. Taco Bell's "STP", or Setting the Pace, training program lasts approximately 19 weeks, consists-of-both classroom and on-the-job training. Taco Bell may charge tuition for training courses that are not mandatory. The franchisee is responsible for all other training costs, which include travel and living expenses for the franchisee and their employees.
Territory: Taco Bell's Franchise Agreement does not provide territorial protection or exclusivity for the franchisee, although Taco Bell may grant such rights in separate transactions or by policy on a temporary basis. The franchisee’s rights under the Agreement are non-exclusive and do not include the right to prevent any other uses by any persons or entities of the trademarks or the system regardless of how close they are or will be to the franchisee’s unit.
Term of Agreement and Renewal: The term of the franchisee agreement is 20 years. Taco Bell does not offer renewal rights but Taco Bell has a Successor Franchise Policy currently in effect, subject to modification or cancellation at any time, under which Taco Bell might agree to enter into a new agreement with the franchisee.
Obligations and Restrictions: The franchisee must devote their full time, best efforts and constant personal attention to the day to day operations of the Unit. If Taco Bell has authorized the franchisee to name an employee as the supervisor of the unit then that person must successfully complete Taco Bell's training program and is required to devote their full time, best efforts and constant personal attention to the day to day operations. The franchisee must offer for sale and sell all and only the food, beverages and other products described in the franchisor’s manual. Taco Bell has the unlimited right to change the types of authorized goods and services.
Total Number of Units: More than 5,855 units.
Investment Tables for traditional outlets:
Initial Investment:
| Name of Fee | Low | High |
|---|---|---|
| Application & Background Check Fee | $300 | $500 |
| Training | Varies | Varies |
| Initial Franchise Fee | $45,000 | $45,000 |
| Licences, Permits and Security Deposits | $85,000 | $150,000 |
| Real Property | $300,000 | $1,200,000 |
| Building/ Site Construction | $505,000 | $615,000 |
| Equipment/ Singage/ Decor/ POS | $337,000 | $380,000 |
| Initial Inventory | $7,000 | $10,000 |
| Promotional advertising | $5,000 | $5,000 |
| Additional Funds (3months) | $40,000 | $60,000 |
| TOTAL | $1,324,300 | $2,465,500 |
Ongoing Fees:
| Name of fee | Amount |
|---|---|
| Grand Opening Expense | $5,000 to be spent by the franchisee, but reimbursable by Taco Bell, for advertising and promoting the opening of the unit |
| Period Franchise Fee | 5.5% of the Unit's Gross Sales |
| Period Marketing Fee | 4.5% of the Unit's Gross Sales, with 1.5% going to the local association and 3% going to the Universal Fund |
| Late charges | The lesser of 18% per annum or the highest rate permitted by California law, plus the then customary administrative charge. |
| Training materials | As established by Taco Bell |
| Cost of audit of the franchisee’s books | Any and all costs incurred in connection with the inspection or audit including reasonable accounting and legal fees |
| Transfer Fee | A transfer of all or a portion of the franchisees interest in any Unit is subject to a transfer fee. The transfer fee is currently $250/Unit plus any additional costs incurred by Taco Bell. |
| Reimbursement of insurance expense | Actual cost of insurance |
| Extension Fee | 1/20th of the then current initial fee for each year extended |
| De-identification costs | Actual cost of de-identifying unit |
| Franchise for Existing Unit | As mutually agreed |
| Attorneys fees and liquidated damages | Prevailing party in any litigation is entitled to reasonable attorneys' fees and costs paid by the other party. If Franchise Agreement is terminated for certain specified reasons, the franchisee must pay liquidated damages equal to the greater of 11 % of Unit's gross sales for last 12 months of operation or $100,000 |
Date of FDD: 2009
The above information has been taken from the UFOC/FDD and online sources of Taco Bell.
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