About Taco Bell Traditional Franchise
Taco Bell Traditional is the full format quick service restaurant concept from YUM! Brands, offering the complete Taco Bell experience in freestanding buildings, power pumper locations shared with gas and convenience stores, and in line or end cap units within retail centers.
The brand serves affordable, quality Mexican style food through dine in, carryout, and drive through service.
Franchising since 2016, the franchise fee is $45,000 for a Traditional Unit or Power Pumper and $25,000 for an In Line or End Cap location.
Taco Bell Traditional Franchise Cost & Fees
Minimum Investment
$175K
Average Investment
$1.8M
Maximum Investment
$3.4M
| Fee Type | Amount | Notes |
|---|---|---|
| Initial Franchise Fee | $25,000 - $45,000 | One-time payment upon signing |
| Royalty Fee | 5.5% of the Unit's Gross Sales of gross sales | Ongoing; paid monthly |
| Marketing/Ad Fund | 4.25% of the Unit's Gross Sales | National brand fund |
| Total Investment Range | $175,000 – $3,370,100 | Includes build-out, inventory, working capital |
The investment range of $175K–$3.4M reflects variability in build-out costs, store size, lease terms, and market. The combined royalty (5.5% of the Unit's Gross Sales) and marketing fee (4.25% of the Unit's Gross Sales) are ongoing costs paid as a percentage of gross sales.
Investment Breakdown (Item 7)
| Item | Low | High |
|---|---|---|
| Background Check Fee | $350 | $600 |
| Initial Franchise Fee (B) | $45,000 | $45,000 |
| First Unit Construction Services (C) | $27,250 | $27,250 |
| Optional Real Estate Services (C) | $0 | $37,250 |
| * Permits, Licenses, Security Deposits (D) | $74,000 | $125,000 |
| *Real Property (E) | $175,000 | $1,400,000 |
| **Building/Site Construction (F) | $550,000 | $1,200,000 |
| **Equipment / Signage/Decor/POS | $375,000 | $460,000 |
| *Initial Inventory (G) | $7,000 | $10,000 |
| Grand Opening Expense (H) | $5,000 | $5,000 |
| *Additional Funds – 3 months (I) | $40,000 | $60,000 |
Additional Fees (Item 6)
| Fee Type | Amount |
|---|---|
| Transfer Fee | 3rd party (non-private equity) transfers: 1-5 units: $7,500/transfer; 6 or more units: $1,500/unit; 3rd party transfers involving private equity: Greater of non-private equity transfer fee or $150,000; Entity restructures: $2,500 total (or 3rd party transfer fee if agreement changes). |
| Renewal Fee | For Traditional Units, the greater of $22,500 or ½ of then-current initial franchise fee. For Power Pumpers, In-Lines and End-Caps, the greater of $12,500 or ½ of applicable then-current initial franchise fee. |
| Technology Fee | BOH & Support Services: $1,651 per year; FOH & Support Services: $2,093 per year; All Access Fee: $1,500 per year |
| Audit Fee | Any and all costs incurred in connection with the inspection or audit, including reasonable accounting and legal fees (only due if Gross Sales understated by 2% or more). |
| Grand Opening Expense | $5,000 (to be spent by franchisee, reimbursed up to $5,000) |
| Late charges | The lesser of 18% per annum or the highest rate permitted by New York law, plus then-customary administrative charge. |
| Additional Trainee Fee | $350 per person |
| Training materials | As established by us. |
| Reimbursement of insurance expense | Actual cost of insurance. |
| Mid-Term Upgrade | $148,000 |
| Extension Fee | $750.00 for a 3-month extension; $2,250 for a 6-month extension plus $1,000 for each additional month beyond 6 months |
| 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 | Greater of 11% of Unit's Gross Sales for last 12 months of operation or $100,000 (if Franchise Agreement terminated for certain specified reasons). |
| Development Fee (Market Build Out Agreement) | $45,000 due within 5 days of scheduled opening date that is missed for new Unit; $4,231/period due within 7 days after last day of each applicable accounting period. |
Training Program (Item 11)
| Detail | Information |
|---|---|
| Total Duration | Minimum of 7 weeks, may be extended to 8 weeks depending on restaurant/organization size and geographical location. |
| Classroom Training | 3 days for Starting Bell brand immersion course; 8-10 hours for Food Safety Certification Training (classroom or online). |
| On-the-Job Training | 50 hours per week for 7 weeks (350 hours total) for management training. |
| Training Location | Restaurant Support Center in Irvine, CA (immersion course); approved company-owned restaurant (on-the-job); local classroom or on-line learning (food safety). |
| Additional Training | Optional classroom training is available at franchisee's expense (e.g., Achieving Breakthrough Results, the Mark, the Quest). Additional trainees may be charged $350 per person. Tuition may be charged for non-mandatory training courses. |
Territory Rights (Item 12)
| Detail | Information |
|---|---|
| Territory Type | Non-exclusive |
| Exclusive Territory | No |
| Description | The Franchise Agreement does not provide territorial protection or exclusivity. The franchisor and its affiliates may establish additional facilities anywhere, regardless of proximity to the franchisee's unit, and may use trademarks in ways that compete with the franchisee's units. The Integrated Expansion Policy may limit or restrict site registrations and restaurant development in some instances. Franchisees purchasing existing units may be required to waive impact protection. Market Build Out Agreements may designate development areas within a one-half mile radius of intersections or an entire geographic region. |
Renewal, Termination & Transfer (Item 17)
| Detail | Information |
|---|---|
| Initial Term | 25 years for new freestanding Traditional Units; 20 years for new Power Pumpers; 10 years for new In-Lines and End-Caps. For existing units, term may vary based on lease length, unit type/age, or specific unit type term. |
| Renewal Term | No renewal rights are granted under the Franchise Agreement, unless an In-Line 10+10 Addendum grants a 10-year successor term. A KT Successor Franchise Agreement may be granted for a 10-year term under the KT Successor Expiration Policy. |
| Renewal Fee | For Traditional Units, the greater of $22,500 or ½ of then-current initial franchise fee. For Power Pumpers, In-Lines and End-Caps, the greater of $12,500 or ½ of applicable then-current initial franchise fee. |
| Renewal Conditions | To renew or extend, the franchisee must be operationally and financially approved, upgrade or relocate the Unit, and pay a successor fee. A release must be signed, and a new agreement with potentially different terms and conditions may be required. For KT Units, minimum sales requirements must also be met, and KFC's standard requirements for successor agreements must be satisfied. |
| Transfer Fee | 3rd party (non-private equity) transfers: 1-5 units: $7,500/transfer; 6 or more units: $1,500/unit; 3rd party transfers involving private equity: Greater of non-private equity transfer fee or $150,000; Entity restructures: $2,500 total (or 3rd party transfer fee if agreement changes). |
| Transfer Conditions | Transfer is subject to franchisor's prior written consent, which will not be unreasonably withheld. Conditions include: no existing default, all outstanding accounts settled, current transfer fee paid, proposed transferee successfully completed training, and transferee executed the then-current Franchise Agreement. |
| Termination for Cause | Immediate termination for: breach of specific subsections (4.1, 5.1, 9.0, 13.2, 13.5, or 14.0); loss of right to possession; material misrepresentation; felony conviction or crime involving moral turpitude; or termination of KFC franchise agreement for KT Units. Termination after 30 days' written notice for other defaults, with repetition of default within one year justifying immediate termination. |
| Non-Compete Period | During the term of the Franchise Agreement and for one year following termination. |
| Non-Compete Details | Franchisee and immediate family/employees/shareholders/associates must not directly or indirectly engage in, acquire interest in, or perform services for any business similar to the Restaurant (Mexican-style food products) within a ten-mile radius of the Restaurant. Passive investments up to 10% in publicly traded companies engaged in similar businesses are excepted. |
Operations & Supply (Items 8 & 15)
| Detail | Information |
|---|---|
| Owner-Operator Required | Yes |
| Participation Details | The franchisee must devote full time, best efforts, and constant personal attention to the day-to-day operations of the Unit. If an employee is designated as supervisor, they must successfully complete the training program and devote full time to operations. The designated employee is not required to hold an equity interest. Franchisee or a qualified manager must reside within approximately one hour driving time from the Unit. Equity holders of an entity franchisee must personally guarantee obligations, except for spouses holding interest solely due to marriage. |
| Required Suppliers | McLane Foodservice, Inc. (food/supply items); Wasserstrom and RSCS Equipment Sales and Services (equipment/smallwares); YRSG (construction services for first unit). |
| Supply Restrictions | Franchisees must use only products that meet or exceed franchisor specifications. Products from unapproved vendors/distributors are prohibited. The Coca-Cola Company beverages are not approved for sale. |
| Franchisor Revenue from Suppliers | In 2021, YRSG earned $274,000 for development services provided to Taco Bell franchisees. No revenues were earned by Yum! Brands’ Architecture and Engineering Department for development services provided to Taco Bell licensees. The franchisor does not directly derive revenue from vendors or distributors from sales to franchisees, but receives royalties from third-party aggregator companies for licensing the Taco Bell brand. |
Financing (Item 10)
| Detail | Information |
|---|---|
| Financing Available | Yes |
| Description | The franchisor does not directly or indirectly offer financing for initial investment or continuing operations, except through the YUM Minority Lending Assistance Program. This optional program for qualifying minorities purchasing an existing Taco Bell restaurant or financing new development offers YUM guaranteeing 25% of the principal of the franchised business loan, up to a maximum of $3,000,000 per loan or franchisee. YUM does not receive consideration for placing financing. Loan terms include a maximum of twelve years for leasehold sites and fifteen years for fee-simple sites, first-lien priority or security interest for the lender, personal guarantees, and default under the loan constitutes a default under the franchise agreement. YUM may buy out the loan in case of default. |
Taco Bell Traditional Franchise Earnings — Item 19
Taco Bell Traditional does not make an Item 19 financial performance representation in their FDD. This means they do not disclose revenue, profit, or earnings data for franchised locations. Before investing, ask the franchisor directly for franchisee contact information so you can speak with existing owners about their actual financial performance.
Taco Bell Traditional does not include an Item 19 financial performance representation in their FDD. Contact information for current and former franchisees is listed in Item 20 of the FDD.
Taco Bell Traditional Litigation & Risk Flags
1 Pending Action ListedReview the full FDD for details on pending litigation.
Litigation and bankruptcy data is sourced from Items 3 and 4 of the FDD. Always verify current status directly from the most recent FDD.
Taco Bell Traditional System Growth
Total Units
7325
Franchised
6863
Company-Owned
462
Taco Bell Traditional currently operates 6863 franchised locations and 462 company-owned units. Unit count data is sourced from Item 20 of the FDD.
Unit History (Item 20)
| Year | Opened | Closed | Total |
|---|---|---|---|
| 2019 | 243 | 62 | 7089 |
| 2020 | 132 | 67 | 7154 |
| 2021 | 240 | 69 | 7325 |
Transfers: 530 | Closures: 42
State Registrations
Registered in 13 states: CA, IL, IN, MD, MI, MN, NY, ND, RI, SD, VA, WA, WI
Franchisor Financials (Item 21)
Revenue
$467K
Net Income
$467K
Total Assets
$101K
Audited by KPMG LLP for year ending December 28, 2021.
Taco Bell Traditional Franchise — FAQ
The total investment to open a Taco Bell Traditional franchise ranges from $175,000 to $3,370,100, per their Franchise Disclosure Document. This includes the initial franchise fee of $25,000 - $45,000. The investment covers build-out, inventory, equipment, signage, working capital, and other startup costs.
Taco Bell Traditional charges a royalty fee of 5.5% of the Unit's Gross Sales of gross sales, plus a 4.25% of the Unit's Gross Sales contribution to the marketing/advertising fund. These fees are paid on an ongoing basis.
You can download the Taco Bell Traditional Franchise Disclosure Document free on this page. The FDD is a public document filed with state franchise registries. Always also request the current FDD directly from Taco Bell Traditional to ensure you have the most up-to-date version.
Taco Bell Traditional does not provide an Item 19 financial performance representation in their FDD, which means they do not disclose franchisee revenue or earnings data. Prospective investors should contact existing franchisees directly (listed in Item 20 of the FDD) to gather real-world financial performance information.
Taco Bell Traditional has been franchising since 2016. The FDD shows an investment range of $175,000-$3,370,100, a 5.5% of the Unit's Gross Sales royalty, and includes an Item 19 earnings disclosure. There are 1 pending litigation action(s). Review the full FDD and contact current franchisees listed in Item 20 before making any investment decision.
The franchise fee is $25,000 - $45,000 and the total investment ranges from $175,000 to $3,370,100 depending on location size and market. Contact the franchisor directly for current net worth and liquid capital requirements, territory availability, and application details.
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Data Source & Disclaimer: This website is for informational purposes only. It is not an offer to sell or buy a franchise. This profile is based on publicly available FDD data sourced from state franchise registry filings. All information is for research purposes only and does not constitute legal, financial, or investment advice. Data may be outdated or contain errors. Always obtain the current FDD directly from Taco Bell Traditional and consult a qualified franchise attorney before making any investment decision. FranchiseOverview.com is operated by Franchising Compliance, LLC and is not affiliated with Taco Bell Traditional or any of its subsidiaries. To report an inaccuracy: info@franchiseoverview.com