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Taco Bell Franchise Cost & Fees

Date of Incorporation: 1962
Franchising Since: 1964
Headquarters: Louisville, Kentucky

Business Description: Taco Bell Corp. is the franchisor and is referred to as “Taco Bell.” Taco Bell is a corporation organized in the state of California in 1962. Taco Bell does business under the names Taco Bell and Taco Bell Express. Taco Bell's corporate parent is YUM! Brands, Inc. (YUM), f/k/a Tricon Global Restaurants, Inc. Taco Bell is a wholly-owned subsidiary of YUM.

Franchise Offer: The franchisee will operate a single-brand, 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:

  • Traditional Units: Free-standing, permanent buildings of various sizes and configurations that offer the full Taco Bell menu. The buildings include a kitchen facility where food is prepared and assembled, a counter where orders are placed and paid for and food is delivered, tables and seats for customers and, frequently, an automobile drive thru.
  • End Caps: In-line locations with a drive thru that also include the other above features.
  • Power Pumpers: Buildings with several of the above features that share a facility with a gas and convenience store.
  • Taco Bell Express (Custom Facades): Less elaborate facilities offering a limited selection of the items found in the full Taco Bell menu. The Custom Facades include stand-alone units constructed on sites within larger buildings and permanently constructed installations of various configurations taking advantage of available space in various types of locations.

Financial Assistance: YUM Funding Financing Program: YUM! Capital LLC (YUM Capital) is a special purpose limited liability company organized under Delaware law, the sole member of which is YUM Capital Funding Corp. (YUM Funding), a Delaware non-stock corporation. YUM Capital is funded by participating banks and is secured by loans made by YUM Funding to franchisees of YUM's restaurant brands. JPMorgan Chase Bank, N.A. serves as administrator for YUM Capital and YUM Funding and as master servicer of the loan portfolio. 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. Except as described, Taco Bell does not offer, directly or indirectly, any arrangements for financing the initial investment or the continuing operation of a Taco Bell business. Taco Bell does not guarantee any note, lease or other obligations.

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 and one manager successfully complete its training program. Taco Bell's management training program, offered on an as-needed basis, is a minimum of 7 weeks. Depending on the size and the geographical location of the franchisee's organization. The training may be extended to 8 weeks if the franchisee has more than 5 restaurants, 8 to 9 weeks if the restaurant/organization is multi-brand. The training consists of web-based or e-learning training, as well as on-the-job and classroom training. Taco Bell requires that all new franchisees attend its Starting Bell brand immersion course at its Restaurant Support Center in Irvine, CA. This course is additional to and separate from the required restaurant training. In addition to the required training, optional classroom training is available at the franchisee’s expense. As Taco Bell deems appropriate, it will furnish advice and assistance in managing and operating the Unit, including local visits by Taco Bell representatives.

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: 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.

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. Except as otherwise provided in the Agreement, franchisees must maintain their personal residence within a driving time of approximately one hour from the Unit. The franchisee must offer for sale and sell all and only the food, beverages and other products described in the franchisor’s manual. During the term of the Agreement, the franchisee and their immediate family, employees, shareholders, and others associated with the franchisee or the franchise, must not engage in the service of Mexican-style menu or food items at the Unit or anywhere else, except for Taco Bell's own brand of Mexican-style menu or items. Taco Bell has the unlimited right to change the types of authorized goods and services.

Estimated Number of Units: 6,321

Investment Tables:
Initial Investment for Traditional Units and Power Pumpers
Name of Fee Low High
Application & Background Check Fee (per person)
$300 $600
Initial Franchise Fee $45,000 $45,000
First Unit Construction Services $25,000 $25,000
Optional Real Estate Services $0 $25,000
Permits, Licenses, Security Deposits $74,000 $74,000
Real Property $175,000 $1,400,000
Building/Site Construction $534,000 $686,000
Equipment/Signage/Decor/ POS $271,500 $290,000
Initial Inventory $7,000 $10,000
Grand Opening Expense $5,000 $5,000
Additional Funds - 3 months $40,000 $60,000
ESTIMATED TOTAL $1,177,300 $2,620,600
Initial Investment for Custom Facades (May be used in all settings except for In-Lines and Power Pumpers)
Name of Fee Low High
Application & Background Check Fee (per person) $300 $600
Initial Franchise Fee $22,000 $22,500
First Unit Design Services Fee $2,000 $2,500
Land- First Month’s Rent $2,100 $4,500
Architectural Fees $1,500 $25,000
Equipment Start-up $1,000 $10,000
Buildout and Construction $25,000 $200,000
Equipment and Decor $30,000 $140,000
Signs $1,000 $14,000
Shipping and Tax $1,600 $15,000
Cash Control Systems $7,000 $25,000
Initial Inventory $3,000 $8,500
Deposits, Business License, Permits $500 $10,000
Additional Funds - 3 months $10,000 $20,000
ESTIMATED TOTAL $107,500 $497,600
Initial Investment for Power Pumpers and In-Lines
Name of Fee Low High
Application & Background Check Fee (per person) $300 $600
Initial Franchise Fee $22,500 $22,500
First Unit Design Services Fee $2,000 $2,500
Land- First Month’s Rent $2,100 $4,500
Architectural Fees $8,500 $45,000
Equipment Start-up $5,000 $10,000
Buildout and Construction $100,000 $275,000
Equipment and Decor $75,000 $145,000
Signs $3,500 $40,000
Shipping and Tax $5,000 $15,000
Cash Control Systems $7,000 $25,000
Initial Inventory $3,000 $8,500
Deposits, Business License, Permits $500 $10,000
Additional Funds - 3 months $10,000 $20,000
ESTIMATED TOTAL $244,900 $623,600
Initial Investment for Purchase of Existing Restaurants from Taco Bell or an Affiliate
Name of Fee Low High
Building, Equipment, Signs and Inventory $150,000 $1,400,000 or more
Initial Franchise Fee $2,250 $11,250 or more
Any Leasehold or Other Real Property interests varies
TOTAL PURCHASE PRICE $152,250 $1,41,250++
Traditional: Other Fees
Type of Fee Amount
Grand Opening Expense $5,000 to be spent by 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 4.25% of the Unit's Gross Sales.
Late Charges The lesser of 18% per annum or the highest rate permitted by California law, plus the then-customary administrative charge.
POS Annual Maintenance Fees $1,440 to $2,200
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 franchisee’s interest in any Unit is subject to a transfer fee. Minimum fees are listed below and are subject to increase for costs incurred by Taco Bell, including but not limited to outside counsel fees, in connection with reviewing and effecting the transfer.
- 3rd party transfers: 1-5 units: $5,000/unit, 6 or more units: $1,000/unit;
- 3rd party transfers involving private equity: Greater of $1,000/unit or $100,000;
- Entity restructures: $1,000 total.
Reimbursement of Insurance Expense Actual cost of insurance.
Mid-Term Upgrade  $111,023
Extension Fee $562.50 for a 3 month extension.
Successor Fees For Traditional Units and Power Pumpers, the greater of $22,500 or ½ of then current initial franchise fee for the applicable type of Unit. For In-Lines and End-Caps, the greater of $12,500 or ½ of applicable then current initial franchise fee. Additionally franchisees will be required at their expense to complete an offset, scrape/rebuild, or major remodel of the Unit as a condition to obtaining successor agreement.
De-Identification Costs Actual cost of de-identifying Unit.
Attorneys' Fees Prevailing party in any litigation is entitled to reasonable attorneys' fees and costs paid by the other party. Outside counsel fees may also be due in connection with review and approval of a transfer of interest.
Liquidated Damages If the 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
Development Fee (Development Agreement) If the franchisee purchases existing Units from Taco Bell and enter into a Development Agreement, and fails to timely open required Units, the franchisee must pay Taco Bell $45,000 and periodic payments of $4,231 until the actual opening date of each new Unit or the expiration of the Development Agreement.
Express: Other Fees
Type of Fee Amount
Royalty 10% of Gross Sales.
Point of Purchase materials Depending on the menu approved for use, the fee varies from a low of $110 per module or $990 per year to a high of $205per module or $1,845 per year.
Late Charges The lesser of 18% per annum or the highest rate permitted by California law, plus the then-customary administrative charge.
POS Annual Maintenance Fees $1,440 to $2,200
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 franchisee’s interest in any Unit is subject to a transfer fee. Minimum fees are listed below and are subject to increase for costs incurred by Taco Bell, including but not limited to outside counsel fees, in connection with reviewing and effecting the transfer.
- 3rd party (non private equity “PE”) transfers: 1-5 units: $5,000/transfer, 6 or more units: $1,000/unit;
- 3rd party transfers involving private equity: Greater of non-PE transfer fee or $100,000 ;
- Entity restructures: $1,000 total.
Reimbursement of Insurance Expense Actual cost of insurance.
Extension Fee Pro-rata amount of then-current initial fee for each year or partial year that the License Agreement is extended.
Successor Fee $11,250
De-Identification Costs Actual cost of de-identifying Unit.
Attorneys' Fees Prevailing party in any litigation is entitled to reasonable attorneys’ fees and costs paid by other party.
Liquidated Damages If License Agreement is terminated for certain specified reasons, you must pay liquidated damages equal 10% of Unit’s Gross Sales for last 12 months of operation or if Licensee has not provided Gross Sales information for the last 12 months, Licensee shall pay $80,000
Celebrating Champions Program Travel & hotel accommodations for employees invited to annual celebration.

The above information has been taken from the FDD of Taco Bell. Year of FDD: 2016

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