Taco Bell Franchise Failure Rate, Profit Margin & Salary 2024

Investing in a franchise business is a good option for those who do not want to build a brand from scratch and make good money from an already established one.

How Much Does A Taco Bell Franchise Owner Make

Taco Bell is one such franchise option that you must have thought about.

And if you want to find out how much does a Taco Bell franchise owner make, what investment is required, what are the pros and cons of this franchise, etc., then keep on reading!


About Taco Bell

About Taco Bell

Taco Bell is a leading and well-known Mexican-inspired quick-service restaurant chain that was founded by Glen Bell in 1962 in Downey, CA.

Before officially starting Taco Bell, Glen used to run “Bell’s Drive-In and Taco Tia” in 1954 in the San Bernardino area. Then shortly in 1962, Glen opened his first franchised store and started expanding rapidly.

Today there are over 8000 Taco Bell locations in 32 countries globally and counting.

Taco Bell offers franchising opportunities to individuals who have a minimum net worth of $1,500,000 and minimum liquid assets of $750,000.

If you meet these basic financial requirements to open a Taco Bell franchise, then keep on reading to find out how much does a Taco Bell franchise owner make.

((https://www.tacobell.com/history))


Investment Required to Own a Taco Bell Franchise

Here’s a breakdown of investment requried to open a Taco Bell franchise for two types of models:

Regular Taco Bell

Type of ExpenditureAmount
Background Check Fee$350-600 per person
First Unit Construction Services$27,250
Initial Franchise Fee$45,000
Optional Real Estate Services$0 – $37,250
Real Property$175,000- $1,400,000
Building/Site Construction$550,000- $1,200,000
Permits, Licenses, Security Deposits$74,000 – $125,000
Initial Inventory$7,000- $10,000
Equipment/Signage/Decor/POS$375,000- $460,000
Grand Opening Expense$5,000
TOTAL$1,298,600 – $3,370,100

Express Taco Bell

Type of ExpenditureAmount
Initial License Fee$22,500
Background Check Fee$350-600 per person
Land-First month’s rent$2,100 – $4,5000
First Unit Design Services Fee$2,000 – $5,000
Architectural Fees$1,500 – $25,000
Equipment and Decor$150,000 – $230,000
Equipment Start-Up$1,000- $10,000
Buildout and Construction$250,000- $200,000
Shipping and Tax$1,600- $15,000
Signs$1,000- $14,000
Deposits, Business, License, Permits$500- $10,000
Cash Control Systems$7,000- $25,000
Additional Funds$10,000- $20,000
Initial Inventory$3,000- $8,500
TOTAL$227,500- $590,100


How Much Does A Taco Bell Franchise Owner Make?

Taco Bell has not made any representations about its franchise sales and profit, so we had to calculate the average sales ourselves.

So in 2021, 6,799 Taco Bell units made sales of $11 billion, and according to this data, we estimate that a Taco Bell franchise owner makes annual sales of $1,617,884 on average.

This is an average, and note that the sales of a Taco Bell franchise might vary based on the Store’s size, menu mix, location, and number of employees, among other things.


Taco Bell Franchise Average Revenue & Profit Margin

As mentioned earlier, a Taco Bell franchise makes sales of $1,617,884 per year on average.

Since Taco Bell has not revealed any information related to its franchise profitability also, we estimate with a profit margin of 15%, a Taco Bell franchise makes $242,682 per year in profits on average.

This is how we calculated this amount:

Financial OverviewPercentage of RevenueAmount ($)
Individual Franchise Annual Revenue100%1617884.00
Rent10.63%(171900.17)
Insurance5.31%(85950.09)
Salaries21.25%(343800.35)
Franchise Royalty Fees5.31%(85950.09)
Utilities2.13%(34380.03)
Cost of Goods Sold (COGS)26.56%(429750.44)
Labor (Variable)13.81%(223470.23)
Total (Expenses)85.00%(1375201.40)
Net Profit15.00%242682.60

Note: The displayed expenses are estimates based on industry averages and standard costs. Actual expenses may vary due to factors like location, business size, and market conditions. We recommend conducting detailed research or consulting with a financial advisor for a tailored financial analysis.


Taco Bell Overall Company Revenue & Profit

Sure, here’s the information presented in a vertical table format:

Taco Bell Statement Per YearAmount
Revenue$13.2 billion
Net Operating Profit$225 million
Profit Margin1.70%

Yum! Brands is the parent company of Taco Bell, and along with it, Yum! Brands also own a couple of other companies.

Since Yum! Brands release the combined revenue and profit data of Taco Bell with all other brands under its umbrella, so it is hard to point out the exact revenue figures for Taco Bell.

Nonetheless, they have revealed some of their figures, from which we can get some idea.

So in 2021, Taco Bell generated system-wide sales of $13.2 billion, and in the same year, Yum! Brands’ total revenue was $58,18 billion.

And out of the $13.2 billion revenue, Taco Bell’s net operating profit was $225 million in 2021, making Taco Bell the highest-earning brand under Yum!;s management.


Taco Bell Franchise Failure Rate

To find out the Taco Bell franchise failure rate, let us see some numbers:

Taco Bell System-wide Outlet Summary

Franchised Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
20196,4466,622+176
20206,6226,679+57
20216,6796,863+184

For the Franchised outlets:

  • In 2019, the growth rate was (176)/6,446×100≈2.73%
  • In 2020, the growth rate was (57)/6,622×100≈0.86%
  • In 2021, the growth rate was (184)/6,679×100≈2.75%

Company-Owned Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
2019462467+5
2020467475+8
2021475462-13

For the Company-Owned outlets:

  • In 2019, the growth rate was (5)/462×100≈1.08%
  • In 2020, the growth rate was (8)/467×100≈1.71%
  • In 2021, the failure rate was (13)/475×100≈2.73%

Total Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
20196,9087,089+181
20207,0897,154+65
20217,1547,325+171

For Total outlets:

  • In 2019, the growth rate was (181)/6,908×100≈2.62%
  • In 2020, the growth rate was (65)/7,089×100≈0.91%
  • In 2021, the growth rate was (171)/7,154×100≈2.39%

According to the above-mentioned data, there is no failure rate for franchised outlets as the outlets at the end of the year increased during the span of 3 years.

We can see that the franchised outlets of Taco Bell grew from 2019 to 2021, showing a growth rate between 2.73% and 2.75%.

On the other hand, for company-owned outlets, the number of outlets started declining in 2021, showing a failure rate of 2.73%. However, in the previous years i.e 2019 and 2020, the growth rate was lying in the range between 1.08% and 1.71%.

Overall, when we combine the data of franchise and company-owned outlets, we can see that Taco Bell franchise has expanded in the years 2019-2021, showing a total growth rate between 2.62% and 2.39%.


Taco Bell Franchise Payback Period

Let us do some calculations to find out the Taco Bell franchise payback period:

AVERAGE INVESTMENT$2,334,350
AVERAGE REVENUE PER OWNER$1,617,884
AVERAGE PROFIT PERCENTAGE15%
AVERAGE PROFIT PER YEAR$242,682
AVERAGE PAYBACK PERIOD9.5 years

PAYBACK PERIOD = TOTAL INVESTMENT / PROFIT PER YEAR

= 2334350/242682 = 9.61 = 9.5 Years based on median

The average investment for a Taco Bell Franchise is $2,334,350.

With an average profit percentage of 15%, the average profit per year is $242,682.

This means that the average payback period for a Taco Bell Franchise is 9.5 years, and the total investment of $2,334,350 would be recovered within this period.


Is Taco Bell Franchise Profitable?

Is Taco Bell Franchise Profitable?
Is Taco Bell Franchise Profitable?

Owing to the ubiquitous presence of Taco Bell and its popularity, this QSR restaurant chain serves more than 42 million customers weekly in all its locations.

As such, it is safe to assume that Taco Bell is a profitable franchise to invest in.

In fact, according to our research and calculation, we estimate that a Taco Bell franchise makes annual profits of $242,682 on average easily.


Taco Bell Franchise Earning Potential

The earning potential of a Taco Bell franchise depends and varies on a number of factors, such as the type of chosen franchise model, your location, and the popularity of Taco Bell in your area, among other factors.

Since Taco Bell has not made any revelations about its sales or profit figure so it is hard to point at a number.

However, we do think that Taco Bell has the potential to earn a good amount of profit.


How Much Does Taco Bell Employee Earn?

How Much Does Taco Bell Employee Earn

The salary of a Taco Bell employee may vary depending on their level of experience, department, position, location, etc.

But according to Indeed, the average hourly pay for a Taco Bell employee ranges from $8.54 per hour for Dishwasher/Cook to $25.70 per hour for a Technician.

And in yearly terms, the average pay for Taco Bell employees ranges from $20,800 per year for the position of Training Supervisor to $158,000 per year for the position of Director of Finance.


Pros And Cons Of Taco Bell Franchise

Pros And Cons Of Taco Bell Franchise

Pros Of Taco Bell Franchise

  • Reputed brand.
  • Offers training and support.
  • Profitable.
  • Allows absentee ownership.
  • Growing rapidly.

Cons Of Taco Bell Franchise

  • High franchise fee of $45,000.
  • Rigid rules and regulations.
  • Requires experience.

Facts About Taco Bell

  • Glen Bell, the founder of Taco Bell, used to own a fast-food joint called Taco Tia, where he sold milkshakes, burgers, hot dogs, and tacos. But after seeing the popularity of his tacos, he then opened Taco Bell.
  • The tacos at Taco Bell cost only 19 cents back when they started.
  • Taco Bell was the first QSR chain to hire women managers.
  • PepsiCo acquired Taco Bell in 1978.
  • Taco Bell has been sued by rapper 50 Cents, who claimed that Taco Bell used his name to promote cheap items on his menu without his permission.
  • To promote its $2 menu, Taco Bell wrote a petition to the government to start printing $2 notes again.
  • Taco Bell’s menu item, the Doritos Loco taco, became insanely popular, and it created $15,000 in jobs.
  • It took engineers and food designers to come up with the Doritos Loco taco after trying out 40 recipes in two years.
  • Taco Bell is present globally, but it failed in Mexico, the place that gave it its namesake.

((https://www.entrepreneur.com/franchises/20-facts-you-probably-didnt-know-about-taco-bell/280383))


What Is Taco Bell Best Known for?

What Is Taco Bell Best Known for

Taco Bell is known for its Mexican American menu, which includes items like tacos, burritos, quesadillas, and other delicious items.

The QSR chain also serves customizable and made-to-order items like burritos and tacos from breakfast to late night.

Taco Bell is also the first QSR restaurant to offer AVA-certified menu items, and it proudly serves over 42 million customers globally each week.

Along with this, Taco Bell serves the best quality product and never compromises on the quality of its food.

Here are some of the best Taco Bell menu items:

  • Chicken Power Bowl.
  • Toasted Cheddar Chalupa.
  • Cheese Roll-Up.
  • Crunchwrap Supreme.
  • 1/2 Combo Burrito.
  • Beefy Melt Burrito.
  • Hard Taco.
  • XXL Grilled Stuffed Burrito.
  • Cheesy Gordita Crunch.

Wrap Up

Taco Bell is a strong and reputable brand that can earn you good money.

In order to be eligible, you must have some experience handling a food business and meet the minimum financial qualifications.

However, you must know that it will take 9 years on average to recover your initial average investment amount of $2,334,350.

Overall, we think that Taco Bell is a good franchise to invest in and must consider it.


Frequently Asked Questions

What is the initial investment required to open a Taco Bell franchise?

Opening a regular Taco Bell franchise requires an initial investment of $1,298,600 – $3,370,100, and for an express Taco Bell franchise, the investment range from $227,500 – $590,100.

What is the franchise fee of Taco Bell?

Taco Bell charges an initial franchise fee of $45,000 for a regular franchise and $22,500 for an express franchise. 

How much royalty and marketing fee does Taco Bell charge?

Taco Bell charges 5.5% in royalty fees and 4.25% in marketing fees.

Who owns Taco Bell?

Taco Bell is owned by the parent company Yum! Brands Inc. Taco Bell is a part of family of fast food powerhouses.

Who founded Taco Bell?

Taco Bell is a fast-food restaurant chain founded in 1962 by American entrepreneur Glen Bell.

Where is the headquarteres of Taco Bell?

Taco Bell is a Mexican quick-service chain that is headquartered in Irvine, California.

How many locations does Taco Bell has?

Taco Bell is operating a total of 8,218 restaurants in 32 different countries. This number rose from 7,791 in the previous year.

Leave a Comment