JMJ Marist Brothers

Notre Dame of Marbel University

COLLEGE OF BUSINESS ADMINISTRATION
BUSINESS ADMINISTRATION PROGRAM
City of Koronadal, South Cotabato, Philippines

TACO BELL
AN EVALUATION
In Partial Fulfillment of the Requirements in
FME 104: FRANCHISING (MIDTERM CASE)
AY 2022-2023 2ND SEMESTER

Presented by:

SHIENA KATE N. LASTIMOSA

BSBA – Financial Management 3

APRIL 06, 2023

 History and Franchise Profile

Glen Bell (1923-2010) created the Taco Bell fast food restaurant
business in Downey, California, in 1962. Taco Bell is an American company.
Yum! Brands, Inc.'s subsidiary Taco Bell. Tacos, burritos, quesadillas,
nachos, novelty and specialty items, and a range of "discount menu" items
are just a few of the Mexican-inspired dishes offered at the locations. As of
2018, Taco Bell operates 7,072 stores, more than 93 percent of which are
owned and run by independent franchisees and licensees. These
restaurants serve more than two billion people annually. Taco Bell was
bought by PepsiCo in 1978, and the company later sold off its restaurant
business as Tricon Global Restaurants, which later adopted the moniker
Yum! Brands. At the junction of West Carson Street and South Western
Avenue in Torrance, California, the first franchisee set up shop in 1964. The
location still stands today, however it is now located at 1647 West Carson
Street. The 100th restaurant in Anaheim debuted in 1967 at 400 South
Brookhurst; it was later replaced by a new eatery at 324 South Brookhurst.

The first Taco Bell east of the Mississippi River opened in 1968 on
East Main Street in Springfield, Ohio. The original Taco Bells only had walk-
up windows without any indoor seating or drive-thru service, and the
buildings where they once stood still stand today despite having been
converted into other Mexican restaurants. With 325 stores, Taco Bell went
public in 1970. When it developed the U.S. chain, Taco Bell started
experimenting with fast-casual and urban concepts. In 2014, Taco Co. and
Urban Taproom reflected a change in the market brought on by the success
of Chipotle Mexican Grill. The tacos on the menu had American fillings;
burritos, which are typically served at Taco Bell restaurants, were not
available. In August 2014, it was introduced at Huntington Beach, California.
On September 15, 2015, Taco Co. shuttered its doors so that the business
could concentrate on its brand-new, eerily similar Taco Bell Cantina concept,
which included unique menu items and alcoholic beverages. It launched its
first site in Chicago's Wicker Park district a few days later. A month later, it
built a facility in San Francisco, less than a block from the original. In 2016,
Taco Bell opened its Taco Bell Cantina flagship store on the Las Vegas
Strip. The 24-hour restaurant serves alcohol, unique cuisine, and features a
DJ.

In August 2017, it was announced that the business would start

hosting weddings. Taco Bell Cantina currently has stores in San Francisco,
Berkeley, Chicago (2 locations), Las Vegas, Austin, Fayetteville, Cincinnati,
Cleveland, Atlanta, Newport Beach, San Diego, San Jose, Nashville, and
soon Summerville. will also open in Massachusetts. In March 2020, Taco
Bell announced it would transform three of his suburban locations into
cantinas this year as part of a pilot. In 2016, Taco Bell built a restaurant out
of five shipping containers for the Texas music festival South by Southwest.
Due to its popularity, the franchise decided to move the restaurant to its
facility in Southgate, California, and opened to the public a year later. but
unlike the usual Taco Bell locations, there is no indoor seating. Taco Bell
announced plans in November 2017 to open 300 more city and cantina

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 locations by 2022. In 2019, Taco Bell opened a pop-up hotel called "The
Bell. "Taco Bell Hotels and Resorts” his August weekend. The hotel was
fully booked within 2 minutes after the announcement Taco Bell has
announced plans to remain at its current headquarters in Irvine until 2030.

Franchise Profile

Eating was defined as a gastronomic pleasure, as this corn tortilla wrapped

the food. Interestingly, tacos used to be a poor man's food, but because of
their great taste, they became widely popular and are now a famous snack
enjoyed by everyone.The original taco concept is like a "edible spoon" in
which the spoon can literally hold food, but tacos, much like their cousins,
quesadillas and enchiladas, can be topped with a variety of treats. For busy
bees like young professionals who have limited time to indulge in a meal
tacos are the perfect snack or meal to try. Taco Bell is perfect for you. This
is where you wrap those delicious tortillas in no time.

Franchise Product or Services:

 Tacos

 Burittos

 Quesadillas

 Nachos,

 Novelty

 Speciality items, and a variety of "value menu" items.

Franchise Inclusions or Package:

 Initial Set-Up Fee

 Improvement/Construction

 Equipment/Fixtures/Furniture

 Pre-opening Expenses

 Hiring and Training of Store Team

 Refrigerated Delivery Truck (4T and up)

Franchise Application Process

 Ensure you have adequate capitalization.

 Appreciate the investment required for a restaurant franchise.

 Evaluate your prior experience and strengths.

 Assess market availability.

 Submit your application.

 Receive approval & opening your Taco Bell franchise.

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 SWOT ANALYSIS
Opportunities Threats
Strengths  Established The issue in
Brand: Taco Bell Franchising: Recently,
in the US is an Taco Bell is facing
established some issues on the
brand with more franchising and
than 5500 outlets distribution side,
in the US only. especially in India. As
More than the compared to other
United States the fast-food chains in
brand has a India, the growth of
strong foothold in the Taco Bell
the international franchise is relatively
market including slow which is causing
Asian, European, trouble for Taco Bell in
Middle East and present and future.
North American Competitors: Wendy’s,
markets. Del Taco, and
Subsidiary of Chipotle are the main
Strong competitors which are
Company: Taco growing rapidly. Thus
Bell is the it should also increase
subsidiary of a its pace.
very popular fast- Shift Toward Healthy
food corporation lifestyle: With rapid
worldwide named changes in lifestyle
Yum! Brands that people or customers
own strong have adopted
brands like Pizza healthier lifestyles.
Hut and KFC. Supply Chain Issues: As
Taco Bell gets a result of the
both financial and implementation of
operational strict policies
support from its governing animal
parent company. feeding and raising,

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Eventually hundreds of Taco Bell
Evolved: Original locations experienced
Taco Bells only difficulties obtaining
featured walk-up pork and beef.
windows without Indirect
indoor seating or Competitors: Indirect
drive-thru Competitors of Taco
service. But with Bell like Mcdonald’s,
its food getting KFC, and Domino’s
popular it franchisees are very
eventually well established in
introduced indoor international markets
seating with an as compared to Taco
open kitchen Bell. Also, these
design and that indirect competitors
got a favourite are slowly entering
place for into selling tacos and
customers to find burritos which is
a mix of seating becoming threatening
areas, music and for Taco Bell due to
lighting to make these competitors
them feel at having a good share
home. of the market.
 High-Quality
Food: Taco Bell
presents a
craveable
Mexican-Inspired
menu following
food safety and
product quality
standards. Taco
Bell is known for
using fresh
ingredients in its

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 food preparation
and maintaining
its taste.
Reasonable
Prices: To ensure
customer
satisfaction, Taco
Bell provides
high-quality food
while ensuring
that the prices
charged are
reasonable for
their customers.
In India, the
starting price of
Taco ranges from
Rs18 to 79 to
make sure a
large number of
customers try out
Tacos.
 Higher
Margins: Taco
Bell charges a
premium that its
competitors don’t.
This provided
Taco Bell with
resources that it
used not only to
thwart the
competitive
pressure but also
used it to invest in

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 research and
development.
Increasing Global
Profit: Taco Bell’s
net profit
contributed
around 66% from
international
franchises and
that could be the
biggest strength
of any brand
bringing other
currencies into its
nation.

Weakness  Reliance on a
Small Number of
Suppliers: Taco
Bell relies on a
small number of
suppliers for its
main ingredients,
which include
chicken, pork,
and beef.
 False
Advertising: In
2011, a lawsuit
was filed against
Taco Bell for
falsely
advertising the
ratio of
ingredients in its
beef filling for its

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 tacos. The spots
featured
employees and
franchisees
stating that the
filling has always
been a mixture of
88% beef and
various spices
and binders and
nothing else.
 Lack of
Variety: Taco
Bell’s menu is
limited to primarily
burritos and
tacos, resulting in
a lack of variety.
As a result, their
customers spend
relatively large
amounts of
money at their
competitors’
locations, such as
Panera Bread.
Not Much Aware In
India: In India,
Taco Bell and its
products are
hardly
recognizable due
to Indian people
not having that
much interest in

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 eating tacos and
burritos. The
company has to
do more if they
want to create
interest in their
products in the
Indian market.
Poor Franchise
Relations: Although
the company is
known for its
excellent supply
chain model and
processes
management, it is
lacking in developing
franchise relations, a
concern that should
be resolved to
expand faster than
the competition.

Criteria in Selecting a Franchise

Costs

For those with an entrepreneurial spirit who may not want to start a
business from scratch for a variety of reasons, opening a franchise can be
the ideal alternative. Opening a Taco Bell franchise, like other franchises,
enables franchisees to launch a company within the framework of a bigger
firm. Franchises have a lot of benefits, but there are also drawbacks to take

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into account. One major factor is cost: Franchises often demand a sizable
upfront investment in addition to having sufficient net worth and liquidity. If
you're thinking about creating your own Taco Bell, you should be aware of
the startup costs and operational needs.
There are a few things you should be aware of if you're considering
opening a Taco Bell. The cost of a Taco Bell franchise can range from
$575,600 to $3,370,100. The location, size, and other factors of the facility,
as well as the structure, machinery, and inventory, can affect this number,
though. Additionally, it pays for the costs of hiring new staff and advertising
the business. In addition, Taco Bell requires a net worth of $1.5 million and
$750,000 in liquid assets to open a franchise. You will be required to pay a
recurring royalty fee of 5% and an advertising fund fee of 4.25% of your
gross sales.

Demand and Competition

Taco Bell Corp may be a fast-food establishment that specializes in

Mexican-inspired food. Taco Bell’s possessed by Yum! Brands, Inc., the
same company that possesses KFC and Pizza Cabin. As a result,
Taco Chime is frequently considered to be portion of the “Yum! Brands
family.”

In any case, there are a few key contrasts between Taco Chime and
other Yum! Brands eateries. For case,
Taco Bell areas are regularly littler and more centered on drive-thru benefit.

In expansion, Taco Bell offers a more extensive assortment of

menu things than either KFC or Pizza Cabin. As a result, Taco Bell has built
a special personality inside the Yum! Brands family of eateries.

Training and Support

Taco Bell offers several support options to its franchisees. With

7,427 (as of 2020) units, Taco Bell aims to provide support to each
franchise owner to help them operate a successful franchise location. Taco
Bell offers 400 hours on the job training, 8 hours classroom training, and
Additional training available additional training. Taco Bell believes these
stages to be the cornerstone for developing a successful restaurant
franchise business and offers ongoing, high-quality training and assistance.
Once they join the Taco Bell franchise system, franchisees will concentrate
on four key areas: developing their store, their team, establishing a strong
foundation for the restaurant franchise, and operational excellence. The
training course is divided into two halves. The Main Proprietor will attend a

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one-week session at the RSC, while the Principal Operator will undergo
eight weeks of instruction. The Principal Operator training is delivered by a
licensed Taco Bell training teacher at a certified Taco Bell training
restaurant and comprises of in-person, online, and classroom instruction.

Abilities
Seeking new franchisees to join the team, Taco Bell franchisees
must be brand builders, interested in bettering the brand, contributing
ideas and being innovative; good operators, efficient with running their
store and satisfying customers; and developers, willing to take and
tackle development in a big way.

Franchisor’s Experience

As the biggest taco and burrito restaurant in the world, Taco Bell,
which is run by Yum! Brands, has established a strong reputation for itself.
With a combination of aggressive menu innovation, inventive marketing
campaigns, low prices, and, more recently, an irreverent social media
presence, the quick service restaurant (QSR) franchise has become the
market leader for fast food with a Mexican influence. Every week, Taco Bell
feeds 42 million consumers at its restaurants, the majority of which are
franchises. The business spent the 2010s concentrating on strategies for
growing the brand by attracting a larger audience.

Expansion Plans

Taco Bell is multiplying down on

its advanced technique, reporting its arrange to roll out more of
its computerized- and mobile-focused eateries all through 2021 and past. In
an declaration on Walk 23, the Yum brands establishment uncovered that it
is on track to have 10,000 eateries open universally this decade, and will be
prioritizing computerized framework when opening
its another 1,000 eateries over the course of 2021.

This will incorporate the across the nation rollout of Taco Bell’s
Go Portable eatery concept, which it propelled in Eminent of final year. The
Go Portable eatery includes a little physical impression, different drive-
thru paths, and centers on portable requesting and contactless pickup. The
digital-forward concept, which demonstrated well known amid the COVID-
19 widespread, is presently a foundation of Taco
Bell’s development technique: Taco Bell plans to open 30 more
Go Versatile eateries by the conclusion of 2021.

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Conclusion

To conclude, Taco Bell has a successful business strategy that is

excellent for aspiring franchisees. The Taco Bell brand is powerful and well-
known worldwide, therefore there is potential for good revenues despite the
initial expenditure being somewhat pricey.

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Reference

(2023, January 9). Taco Bell. https://tacobell.com.ph/

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