Taco Bell

The initial franchise fee is $45,000 — same as KFC and McDonald's. However, Taco Bell layers on a mandatory $27,250 'First Unit Construction Services' fee for your first location: $25,000 for construction management from Yum! Brands affiliate YRSG plus $2,250 for an ADA compliance inspection. This is required, not optional, and paid prior to site submission. Your effective day-one cost for a first location is $72,250 before you've broken ground.

There's also a $10,000 '10K Trade Area Fee' for existing franchisees who want to lock up a specific territory under Taco Bell's market development program — non-refundable, though it can be applied toward your initial franchise fee if you build in that area.

Ongoing fees stack to roughly 9.75% of gross sales: a 5.5% royalty due within 5 business days of each accounting period, plus a 4.25% Period Marketing Fee (some legacy franchisees who didn't opt in to the 2012 change pay 4.5%). The technology fee is comparatively light at $750/year through Taco Bell's 'All Access' program covering digital menu boards, TKDS, and mobile.

The real ongoing exposure is the digital transaction fee: $0.19 per digital order across mobile, web, kiosk, and delivery. With digital orders now representing a growing majority of QSR volume, this per-transaction fee can compound meaningfully at high-volume locations.

Total new construction investment runs $1.86M to $4.31M for a traditional freestanding drive-thru location. In-line and end-cap formats (no drive-thru) are substantially cheaper at $935K to $1.82M. The new construction range is wider than KFC's — partly reflecting higher-end Taco Bell builds and partly the Dallas, TX cost basis used in the FDD (Taco Bell explicitly notes to adjust for local markets). Compared to QSR category averages, Taco Bell's high end ($4.31M) is among the most expensive in the category.

Taco Bell provides no historical average unit volumes, no median revenue figures, and no operating cost data in Item 19. This is an unusual choice for a brand of this size and maturity — most comparable QSR franchisors disclose at least aggregate sales ranges.

What Taco Bell does provide are three third-party sales forecast tools: Bell Point (developed by Bain & Company), Kalibrate, and SiteZeus. Of these, only Kalibrate and SiteZeus have disclosed accuracy metrics. Kalibrate projected a range of $746,159 to $3,185,514 for a sample of 346 units opened 2021-2023, with 67% of projections falling within 20% of actual sales. SiteZeus showed a similar range ($865,412 to $3,263,046) with 63% accuracy within 20%.

The implied midpoints — roughly $1.5M to $2.0M — are consistent with publicly reported estimates of Taco Bell average unit volumes, but this is inference, not disclosure. For comparison, KFC discloses an average of $1.35M for U.S. locations, and Taco Bell's brand strength and drive-thru focus suggest it likely outperforms that benchmark. Industry estimates consistently place Taco Bell average volumes above $1.5M, with top-performing units approaching $3M.

The absence of Item 19 data means any lender or equity partner will need to rely on third-party estimates or comparable brand research to underwrite the investment. Build this assumption conservatively into your model.

Taco Bell's U.S. system is one of the healthiest growth stories in all of QSR franchising. Net unit growth has been positive for three consecutive years: +157 in 2022, +161 in 2023, +166 in 2024 — adding roughly 490 locations while its Yum! sibling KFC lost 250. Taco Bell projects 184 new U.S. openings for the next fiscal year, an acceleration.

The quality of that growth is equally impressive. In 2024, 187 franchised locations opened against just 2 terminations, 3 non-renewals, and 24 ceased operations — an exceptionally clean expansion record. For context, KFC terminated 151 locations in the same year Taco Bell terminated 2. This is not a system under stress; it's a system where franchisees are actively building.

With 7,847 total U.S. units (7,349 franchised, 498 company-owned), Taco Bell is the second-largest QSR brand in this dataset after Subway, with better unit economics and a cleaner trajectory. The brand's Mexican-inspired positioning has proven remarkably durable and culturally sticky — it's not chasing trends, it *is* the trend for its demographic.

The health score of 72 reflects strong growth and low churn, discounted by the lack of financial disclosure.

The absence of Item 19 revenue data is the biggest structural concern. In a category where McDonald's discloses sales data for 11,000+ locations and KFC discloses data for 2,850, Taco Bell's refusal to publish historical average unit volumes stands out. Prospective franchisees are effectively being asked to invest $2M-$4M based on sales forecast tools with 33-37% miss rates.

The renewal structure is unusually demanding. The successor fee is the greater of $22,500 or half the then-current franchise fee, and renewal requires the franchisee to complete either a scrape/rebuild, an offset (repositioning), or a major remodel at their own expense. The 25-year term is long, but the remodel obligation at renewal means you're not simply paying a fee — you may be writing another capital check.

Liquidated damages are substantial: if your agreement is terminated for specified reasons, you owe the greater of 11% of your last 12 months' gross sales or $100,000. On a $1.5M-revenue location, that's $165,000 in liquidated damages on top of losing the business.

The 'Relationship Agreement' pathway for multi-unit operators adds $20,000 to $100,000 in legal fees for negotiation — and these agreements carry transfer fees of up to $150,000 when selling the business. Taco Bell's complexity increases meaningfully as you scale.

Finally, building/site costs are benchmarked to Dallas, TX — an expensive construction market. Franchisees in the Northeast, California, or other high-cost markets should expect to revise the $1.86M-$4.31M investment range upward.