Earn More MoneySeptember 20, 2021November 8, 2021

How Much Money Can A Taco Bell Franchise Earn?

Investing is a critical aspect of everyone’s finances. However, investing comes in many different forms. Some people prefer stocks, while others prefer real estate. However, there are many people who go with alternate forms of investing. One of these investments is franchising. Franchising comes in many forms such as gyms. However, one of the most popular forms of franchising is restaurants. Many people, including celebrities, have both gains and increased their wealth through franchising. The reason for this is simple. Many franchises are known to have a good long-term return on investment. If you aren’t new to this website then franchises are not a foreign topic. We’ve talked about many franchises. These franchises include Wendy’s, McDonald’s, Burger King, and Subway.

However, there are many more that we have yet to discuss. The purpose of this article is to talk about one of the franchises that have yet to be discussed, Taco Bell. Taco Bell, for those who don’t know, is an American-Mexican chain restaurant that is known for items such as tacos and fries supreme. They were first established in the 60s. However, they know now have become one of the most well-known fast-food restaurants in North America. Particularly in the United States.

How To Obtain A Taco Bell Franchise

A Taco Bell restaurant can be obtained in one of two ways. However, both of these ways are through the restaurant itself. The first is applying through their website to operate your own, new restaurant. This can be done by requesting more information and speaking with taco bell representatives directly. The next would be to take over an already existing Taco Bell franchise. This, however, will most likely have different costs associated as appose to opening a new franchise. Regardless, some people may prefer opening their own franchise. However, there are many people who may find it easier to take over an already established franchise.

The good thing about Taco Bell is that they have an aggressive growth goal for the future. Therefore, they are always looking for candidates who are looking to own multiple units. In terms of what makes an ideal candidate, Taco Bell has values that its prospects must align with.

Above are 4 aspects that make up an ideal candidate. The first is that they have to have a passion for Taco Bell. This means understanding every aspect of Taco Bell in terms of being a long-term investor and commitment to culture. The next aspect that an ideal prospect must have is experience. Taco Bell makes it very clear that you will not be able to own one of their franchises without experience. Therefore, those with extensive restaurant experience will be a step above the rest. However, you can still become a franchisee without the necessary experience. The caveat to this is that you will need to partner with someone who does have the necessary experience.

After that, Taco Bell requires someone with excellent organizational skills. Running a business is difficult, especially for a restaurant. However, having excellent organizational skills will help the business operate more smoothly. Lastly, Taco Bell requires its candidates to be financially savvy. This is due to the fact that they want their franchises to become successful. This will eventually turn into multi-unit owners.

Costs Associated

In terms of costs, Taco Bell has quite a few. However, this is no different from many other franchises. Franchises have high fees with a relatively small profit margin. When looking at a franchise for any company, there are a few common fees. First is the initial franchise fee. The next fee is the royalties. The last one is the marketing fee. Some are relatively low (4%). However, there are some companies that charge a larger royalty + marketing fee (12%). These fees can be an absolute deal-breaker. Therefore, make sure the franchise you want is within your budget. However, Taco Bell, in my opinion, is on the higher end of fees. If we are combining both royalties and marketing fees, Taco Bell charges 9.75%. Breaking this down, it is 5.5% for royalty fee and 4.25% for marketing. Both of these numbers are taken off the unit’s gross sales.

The next major fee is the initial franchise fee. This franchise fee is a large lump sum of money paid upfront. However, the fee can vary depending on the size and type of restaurant. For example, the franchise fee for a Taco Bell within a mall will be cheaper than a large, free-standing building. However, the minimum amount is $25,000. Whereas the maximum is $45,000.

When it comes to purchasing from a franchiser, the cost greatly varies. On the low end, you will be paying around $175,00. This includes equipment, franchise fee, signs, and inventory. However, you can pay significantly more on the high end. Sometimes close to $2,000,000.

When building your own franchise, the costs have an even greater range. Here, you will pay for things such as the construction, grand opening, etc. On the low end, you will pay closer to $500,000 – $600,000. However, on the high end, you can see your costs increase to well over $3,000,000. Of course, this is for larger units that are located in prime real estate.

The other ongoing fees include inventory, payroll, maintenance, etc.

How Much Money Can A Taco Bell Franchise Earn?

In terms of earnings, a Taco Bell franchise owner will earn depending on the sales the unit makes. Therefore, any profit that is leftover from the business can be taken as salary or used as bonuses for staff. This is often the case as you’ll see many general managers for fast food chains earning large end-of-year bonuses depending on how much the profit margins are. For many Taco Bell owners, you’ll see income right out the gate from owning the franchise. While you’ll still be in debt, you can accumulate a large amount of money to pay this off within a few years. Typically, Taco Bell franchise owners earn $80,000 – $150,000+ per year. However, within your first few years, much of your income will go towards paying off any debts you have.

This income will depend on a few things. The first is the sales. More sales = more money. However, if you can also keep costs down, that will increase your profit margin. In turn, this will increase the amount of money you can take home at the end of the year. Finding a good balance between mitigating expenses and maximizing sales is key. Furthermore, the more incentives and bonuses you give out will most likely be taken out of the store’s profits. However, these things are necessary to keep employee morale up. Many employees want to be rewarded for this work outside of their regular bi-weekly paycheque.

Lastly, I’ve mentioned before that Taco Bell has an aggressive growth plan. Therefore, once you start owning multiple franchises, you’ll see your income exponentially grown. However, each franchise you own and operate will have its own fees. Therefore, being organized and financial savvy is critical. That is why both of those aspects are key values to Taco Bell and many other companies that franchise.

Shameed Chris Khan

Shameed is just a man on a mission to help those around him gain financial success. Obsessed with writing about all things finance, this GTA native is constantly learning and sharing his experiences with others.