Here's How Much It Really Costs To Open A Taco Bell Franchise

Owning a Taco Bell restaurant puts you in the fast food big leagues. Taco Bell is in an exclusive club, as one of six fast food chains that rack up $10 billion or more in annual sales in the U.S. With $11 billion in sales in 2019, Taco Bell was in a virtual tie with Chick-fil-A for third place in the U.S. fast food rankings, behind only McDonald's and Starbucks (via QSR). While sales at each store recently shrunk due to the COVID-19 pandemic (via CNBC), Taco Bell has been on a recent trend of same-store sales growth that even the company's CEO found "remarkable" (via QSR).

Potential franchisees understandably would like a piece of that pie — or in this case "quesadilla" may be the appropriate metaphor. Taco Bell happens to be making room for more to join its team. The Balance reported last year that Taco Bell had a goal of opening 2,000 new locations by 2023. 

Taco Bell's website for people who might want to open a franchise features two separate applications, depending on whether you want to locate inside the U.S. or in one of the Bell's international markets. Let's break down the costs for opening a Taco Bell in the U.S.

The cost of a Taco Bell franchise depends on construction needs

Taco Bell's application includes a multiple-choice question: How much in "liquid assets" can you bring to this investment? In other words, if Taco Bell needed you to come up with some cash right now, how much could you get for them? Some answers to that question are more right than others. According to Franchise Direct, Taco Bell suggests that you have $750,000 in ready cash and a net worth of $1.5 million. Opening a new Taco Bell isn't cheap.

The amount of money needed for real estate and construction can range from a little to quite a lot, so the cost of opening a Taco Bell franchise varies considerably: $570,600 to $3,049,100, according to Franchise Direct, which says its numbers are current as of 2020.

Those figures are for a traditional Taco Bell site. For Taco Bell stores that might be part of a gas station or a strip mall, the costs are lower. With modest construction requirements, these restaurants will cost the new franchisee between $252,500 and $701,100, per Franchise Direct. Another option is to purchase an existing Taco Bell, which will cost at least $175,000 (via Franchise Direct).

The parent company is going to take a good-sized sliver of the lucrative Taco Bell pie, er, quesadilla, after the franchise is up and running. Taco Bell collects a franchise fee equal to 5.5 percent of gross sales, and a marketing fee of 4.25 percent.