Taco Bell franchise
The franchisee owns and operates a Taco Bell quick-service restaurant selling inexpensively priced Mexican-style food for take-out and on-premises eating, most commonly as a free-standing building with a drive-thru.
Owner-operator required Disclosed
- Source
- 2026 Franchise Disclosure Document — Taco Bell Franchisor, LLC (Traditional FDD)
- Document
- FDD 2026, issued 2026-03-26
- Item
- Item 15
- Page
- PDF p. 52
- Obtained
- Wisconsin Department of Financial Institutions — Franchise Registration Search, file 640472
Item 15 requires the franchisee to devote full time, best efforts and constant personal attention to day-to-day operations. The franchisor may authorise the franchisee to name an employee as unit supervisor, in which case that person must complete the training programme and devote full time to the unit; the supervisor need not hold equity. Where the franchise is held through an entity, the franchisee remains personally obliged to devote full time unless the franchisor agrees otherwise. The franchisee or a qualified restaurant manager must live within roughly one hour's driving time of the unit.
What stands out
- New Traditional Unit investment of $1,859,750 to $4,312,200 including a $45,000 initial franchise fee; the range assumes a purchased site and Dallas-market construction costs.
- Ongoing fees are 5.5% of Gross Sales plus 4.25% to the national marketing fund, with additional technology fees estimated at up to $21,500 per restaurant per year across the franchisor and third-party vendors.
- Item 19 discloses no actual unit sales — only forecast-tool ranges and accuracy rates for a 183-unit back-test sample of drive-thru units opened in 2023.
7 more observations
- 7,998 units at fiscal year end 2025: 7,335 franchised and 663 company-owned, U.S. only, excluding Taco Bell Express licences.
- The franchisor reacquired 144 franchised units during 2025, the reason franchised count fell by 6 despite 168 openings.
- No territorial protection or exclusivity is granted, and sister YUM brands may open anywhere.
- No renewal right: a successor agreement is at the franchisor's discretion and requires an offset, scrape/rebuild or major remodel at the franchisee's cost, plus a fee of at least $22,500.
- Items 3 and 4 disclose no litigation and no bankruptcy.
- Disputes go to court in Orange County, California under New York law; there is no arbitration clause in the franchise agreement.
- Item 15 requires the franchisee's full-time personal attention unless the franchisor authorises a trained employee supervisor, who must also work full time.
Things to verify
- Ask existing franchisees for actual annual sales and unit economics — the FDD provides none, and forecast-tool output is not a substitute.
- If a forecast is provided, ask which tool produced it and confirm the stated margin of error; the franchisor says roughly 35% of Bell Point projections miss by more than 20%.
- Establish what the mid-term upgrade will require and cost — the FDD imposes the obligation, makes failure a non-curable default, and does not estimate the price.
6 more questions
- Confirm the successor-term length for a Traditional Unit: Item 17 states 20 years while Item 6 note (iv) states 25 years after an offset or scrape/rebuild and 20 years after a major remodel.
- Price the technology stack in full, including the up to $83,000 one-time per-restaurant cost that sits in Item 11 rather than Item 7.
- Ask why 144 units were reacquired in Florida, Georgia and South Carolina during 2025 and on what terms.
- Test the Item 7 real property and construction figures against local land, labour and permitting costs; the estimates are Dallas-based and the FDD says actual costs vary considerably.
- Clarify eligibility for the National, Urban Test and De-Coupling incentive programs, since they can waive the initial fee and reduce or waive royalty and marketing fees for a period.
- Confirm whether the first-unit $27,250 payment to affiliate YRSG will be required, since the FDD says the franchisor 'may' require it.
Economics: No calculator is offered because no annual average unit sales disclosed in Item 19. Model availability
Evidence confidence: High. This describes source support, not investment quality. AI-extracted and machine-verified where stated; no human line-by-line review. Source and review record.
Read the full research overview
A Taco Bell franchisee owns and runs a quick-service Mexican-style restaurant, most commonly a free-standing building with a drive-thru. The 2026 Traditional disclosure document, issued March 26, 2026 and registered in Wisconsin, prices a new Traditional Unit at $1,859,750 to $4,312,200, including a $45,000 initial franchise fee and a purchased site valued at $250,000 to $1,400,000. Building and equipment costs are quoted for the Dallas market and the range assumes only three months of additional funds. A smaller In-Line or End-Cap format runs $934,750 to $1,817,200 on a leased site with a $25,000 fee, and buying an existing restaurant from the franchisor or an affiliate is quoted at $175,000 to $1,800,000 or more excluding real property. Ongoing fees are 5.5% of Gross Sales as a period franchise fee and 4.25% to the national marketing fund, plus technology charges the franchisor estimates at up to $6,000 a year to it or its affiliates and up to $15,500 a year to third parties, with up to $83,000 of one-time technology cost on top. No minimum liquidity or net worth is stated in the reviewed source.
Item 19 is unusual: it contains no actual sales history. Instead it describes three site-forecasting tools and reports how well two of them predicted results for 183 single-brand drive-thru units opened in 2023 — 61% of Kalibrate projections and 64% of SiteZeus projections came within 20% of actual sales, with projected annual Gross Sales spanning roughly $616,000 to $3,992,000. Those are model outputs, not achieved results. The franchisor states outright that it makes no representation about the past or future performance of any unit, and describes its own Bell Point model as new and untested with a plus or minus 20% margin of error. Average or median unit sales, costs and profits are not disclosed in the reviewed source.
Item 20 shows a large, slow-growing system. Franchised units went from 7,056 at the start of 2023 to 7,335 at the end of 2025, with company-owned units rising from 464 to 663 and total units reaching 7,998. Openings were steady at 164, 183 and 168 across the three years and terminations were rare (4, 1 and 1). The one break in the pattern is 2025, when the franchisor reacquired 144 franchised units — 102 in Florida, 23 in Georgia and 19 in South Carolina — which pushed the franchised count down by 6 for the year. Transfers to new owners ran 197, 39 and 134. The franchisor projects 184 new franchised units in the next fiscal year and reports no signed agreements awaiting opening.
On risk, Items 3 and 4 disclose no litigation and no bankruptcy. The main contractual points a buyer would weigh are the complete absence of territorial protection, the lack of any renewal right (a successor agreement is discretionary and conditioned on a rebuild or major remodel the FDD says costs about as much as a new unit), a 25-year term, personal guarantees from all equity holders, liquidated damages of the greater of $100,000 or 11% of trailing twelve-month Gross Sales if the franchisee walks away, litigation confined to Orange County, California under New York law with no arbitration, and required purchases the franchisor estimates at 40% to 70% of build cost and about 40% of operating expenses.
View ratings and their supporting evidence
Transparent ratings
How these are computedEach dimension is scored 1–5 from published formulas. Missing data yields “Not enough evidence to rate”, never a low score. There is no composite score by design.
How the system has performed, computed from the disclosed Items 7, 19 and 20. Figures a documented material source inconsistency puts in doubt are excluded, and the dimension shows “Not rated”.
Inputs
- Franchised outlets 7056 → 7335 (Item 20, Table 3)
- Thresholds: ≥15% → 5; 5–15% → 4; 0–5% → 3; −5–0% → 2; below −5% → 1
Inputs
- Attrition = (terminations + non-renewals + reacquisitions + ceased-other) ÷ start-of-year franchised units, averaged over 3 fiscal years
- Thresholds: <2% → 5; 2–4% → 4; 4–6% → 3; 6–10% → 2; >10% → 1
Inputs
- No annual average unit sales disclosed
How much this brand’s FDD discloses, and how well-supported our data on it is. This measures transparency, not business performance — a strong business that discloses little scores low here and stays unrated above.
Inputs
- Item 19 present (+1)
- Average plus median or a distribution (+1)
- Population 2% of franchised units, clearly described (+1)
- Multi-year or cohort data (+1)
Details
- Missing: Annual AUV
- Franchisor Track Record
- Franchising 62 years (since 1964) · 7,998 outlets · Item 3: no litigation disclosed · Item 4: none disclosed
- Multi-Unit Scalability
- The franchise agreement grants no options or rights of first refusal to acquire additional franchises. Multi-unit growth is handled through separate instrume… · Owner-operator required
- Operational Intensity
- Owner-operator required
Initial investment
FDD Items 5 and 7Format shown: New Traditional Unit (free-standing restaurant; Item 7 assumes a purchased site)
$1,859,750–$4,312,200 total initial investment. Includes real estate purchase. Includes 3 months of additional funds.
View full investment breakdown — Items 5 & 7
| Initial franchise fee (the named Item 5 fee only) | $25,000 Disclosed
Waived/reduced under incentive programs (successor fee $22,500) and occasionally waived entirely (FY2025 fees paid ranged $0-$45,000); these discounts are not the standard new-franchisee rate. $45,000 Disclosed
Waived/reduced under incentive programs (successor fee $22,500) and occasionally waived entirely (FY2025 fees paid ranged $0-$45,000); these discounts are not the standard new-franchisee rate. |
|---|---|
| Other required initial payments to the franchisor (Item 5) |
|
| Total initial investment — low | $1,859,750 Disclosed
|
| Total initial investment — high | $4,312,200 Disclosed
|
| Midpoint of range | $3,085,975 Derived
|
| Real estate purchase included? | Yes |
| Additional funds assumed | 3 months |
| Required liquid capital | Not disclosed in the reviewed source Not disclosedNot disclosed in the reviewed source. We did not find this value in 2026 Franchise Disclosure Document — Taco Bell Franchisor, LLC (Traditional FDD); we do not fill gaps with estimates or third-party figures. No minimum liquid-capital requirement is stated on the cover page or in Items 1, 5, 7, 10, 11 or 15 of the reviewed document. |
| Required net worth | Not disclosed in the reviewed source Not disclosedNot disclosed in the reviewed source. We did not find this value in 2026 Franchise Disclosure Document — Taco Bell Franchisor, LLC (Traditional FDD); we do not fill gaps with estimates or third-party figures. No minimum net-worth requirement is stated in the reviewed document. Item 17 refers to being 'operationally and financially approved' under then-current guidelines without quantifying it. |
The Traditional Unit table assumes a purchased free-standing site, with building and equipment costs priced for the Dallas, Texas market; the franchisor states other markets will differ. Both the low and high columns foot exactly to the stated totals. Real property purchase is included in the range ($250,000–$1,400,000); a leased ground site would instead carry base rent of $45,000–$200,000 or more per year, which is not in the table. Additional funds cover only the first three months. The In-Line/End-Cap table assumes a leased site. The existing-unit purchase table excludes real property and the FDD states the price 'may exceed $1,800,000'; the initial franchise fee on that route is $45,000 for a Traditional Unit and $25,000 for an In-Line or End-Cap. Financing is not offered by the franchisor except as described in Item 10, and the estimates exclude interest and debt service. One-time technology costs of up to $83,000 per restaurant are disclosed in Item 11 rather than broken out in Item 7.
Item 7 line items (11)
| Expenditure | Low | High |
|---|---|---|
| Background check fee — Per person. | $500 | $700 |
| Initial franchise fee | $45,000 | $45,000 |
| First unit construction services (YRSG) — $25,000 development services plus $2,250 ADA inspection; applies to the first unit. | $27,250 | $27,250 |
| Optional real estate services (YRSG) — Described as optional in Item 5 but included in the Item 7 totals. | $10,000 | $37,250 |
| Permits, licenses, security deposits — Includes required preferred national architecture and engineering consultant work. | $75,000 | $150,000 |
| Real property — Estimates are for purchased sites; a ground lease is quoted at base rent of $45,000 to $200,000 or more per year. | $250,000 | $1,400,000 |
| Building and site construction — Based on the Dallas, Texas market. | $1,000,000 | $2,000,000 |
| Equipment, signage, decor, POS — Based on the Dallas, Texas market. | $400,000 | $577,000 |
| Initial inventory — First week of operation. | $7,000 | $10,000 |
| Grand opening expense — Reimbursable up to $5,000 if proof of spend is filed within nine months of opening; not reimbursable for successor agreements or fee-waiver units. | $5,000 | $5,000 |
| Additional funds — 3 months | $40,000 | $60,000 |
Source for every row: the Item 7 estimated-initial-investment table of 2026 Franchise Disclosure Document — Taco Bell Franchisor, LLC (Traditional FDD) (table begins PDF p. 23) — rows inherit the table's citation rather than carrying fifteen identical ones.
Other formats disclosed in Item 7 (2)
| Format | Low | High | Fee |
|---|---|---|---|
| New In-Line or End-Cap Unit | $934,750 | $1,817,200 | $25,000 |
| Purchase of an existing Unit from the franchisor or an affiliate (excludes real property) | $175,000 | $1,800,000 | — |
Ongoing fees
FDD Item 6Royalty
5.5% of gross sales Disclosed
- Source
- 2026 Franchise Disclosure Document — Taco Bell Franchisor, LLC (Traditional FDD)
- Document
- FDD 2026, issued 2026-03-26
- Item
- Item 6 — Period Franchise Fee
- Page
- PDF p. 16
- Obtained
- Wisconsin Department of Financial Institutions — Franchise Registration Search, file 640472
Payable by the fifth business day after each accounting period. Gross Sales are all payments received for sales and services, excluding only sales taxes, employee meals, overrings and customer refunds. Units qualifying for the Urban Test Incentive Program pay 2.75% for the first year.
Brand advertising fund
4.25% of gross sales Disclosed
- Source
- 2026 Franchise Disclosure Document — Taco Bell Franchisor, LLC (Traditional FDD)
- Document
- FDD 2026, issued 2026-03-26
- Item
- Item 6 — Period Marketing Fee
- Page
- PDF p. 16
- Obtained
- Wisconsin Department of Financial Institutions — Franchise Registration Search, file 640472
Paid into the Taco Bell National Advertising Fund Administration (NAFA). The franchisor states it contributes 4.25% of Gross Sales from company-owned U.S. units, and that not all franchisees contribute a proportional fee. In FY2025 NAFA spent 74.0% on media placement, 22.9% on production, 3.0% on customer marketing and activation and 0.1% on general and administrative costs. Incentive programs can waive the marketing fee for one to four years or reduce it to 2.25% for a year.
Local marketing
Not disclosed in the reviewed source Not disclosed
Not disclosed in the reviewed source. We did not find this value in 2026 Franchise Disclosure Document — Taco Bell Franchisor, LLC (Traditional FDD); we do not fill gaps with estimates or third-party figures.
The current form of franchise agreement does not state a separate required local advertising spend; the full 4.25% goes to NAFA. Franchisees still on the pre-2013 form pay 4.5% of Gross Sales, of which 1.5% was allocated to local advertising associations. A one-time $5,000 grand opening spend is required within six months of opening and is reimbursable up to $5,000.
Core requirements shown separately; caps, credits and conditions may overlap. Check the full schedule for technology, cooperative, transfer and other charges.
View all recurring fees and conditions
| Royalty | 5.5% of gross sales Disclosed
Payable by the fifth business day after each accounting period. Gross Sales are all payments received for sales and services, excluding only sales taxes, employee meals, overrings and customer refunds. Units qualifying for the Urban Test Incentive Program pay 2.75% for the first year. Payable by the fifth business day after each accounting period. Gross Sales are all payments received for sales and services, excluding only sales taxes, employee meals, overrings and customer refunds. Units qualifying for the Urban Test Incentive Program pay 2.75% for the first year. |
|---|---|
| Advertising / brand fund | 4.25% of gross sales Disclosed
Paid into the Taco Bell National Advertising Fund Administration (NAFA). The franchisor states it contributes 4.25% of Gross Sales from company-owned U.S. units, and that not all franchisees contribute a proportional fee. In FY2025 NAFA spent 74.0% on media placement, 22.9% on production, 3.0% on customer marketing and activation and 0.1% on general and administrative costs. Incentive programs can waive the marketing fee for one to four years or reduce it to 2.25% for a year. Paid into the Taco Bell National Advertising Fund Administration (NAFA). The franchisor states it contributes 4.25% of Gross Sales from company-owned U.S. units, and that not all franchisees contribute a proportional fee. In FY2025 NAFA spent 74.0% on media placement, 22.9% on production, 3.0% on customer marketing and activation and 0.1% on general and administrative costs. Incentive programs can waive the marketing fee for one to four years or reduce it to 2.25% for a year. |
| Required local marketing | Not disclosed in the reviewed source Not disclosedNot disclosed in the reviewed source. We did not find this value in 2026 Franchise Disclosure Document — Taco Bell Franchisor, LLC (Traditional FDD); we do not fill gaps with estimates or third-party figures. The current form of franchise agreement does not state a separate required local advertising spend; the full 4.25% goes to NAFA. Franchisees still on the pre-2013 form pay 4.5% of Gross Sales, of which 1.5% was allocated to local advertising associations. A one-time $5,000 grand opening spend is required within six months of opening and is reimbursable up to $5,000. |
| Technology / software | $6,000/year Disclosed
The franchisor estimates yearly fees of up to $6,000 per restaurant payable to it or its affiliates (POS, back-of-house and front-of-house support, licences, labour and inventory software). Separately it estimates up to $15,500 per restaurant per year payable to third-party vendors and up to $83,000 in one-time per-restaurant costs. Item 6 adds an All Access Fee of $750 per year and transaction fees of $0.19 per digital order and $0.19 per gift card transaction. These are maxima ('up to'), not fixed charges. The franchisor estimates yearly fees of up to $6,000 per restaurant payable to it or its affiliates (POS, back-of-house and front-of-house support, licences, labour and inventory software). Separately it estimates up to $15,500 per restaurant per year payable to third-party vendors and up to $83,000 in one-time per-restaurant costs. Item 6 adds an All Access Fee of $750 per year and transaction fees of $0.19 per digital order and $0.19 per gift card transaction. These are maxima ('up to'), not fixed charges. |
| Advertising cooperative | Not disclosed in the reviewed source Not disclosedNot disclosed in the reviewed source. We did not find this value in 2026 Franchise Disclosure Document — Taco Bell Franchisor, LLC (Traditional FDD); we do not fill gaps with estimates or third-party figures. The current agreement directs all marketing contributions to the national fund. Local advertising cooperative accounts survive only for franchisees on the pre-2013 form of agreement, under which 1.5% of a 4.5% contribution funded local associations. |
| Transfer fee | $7,500 one-time Disclosed
Third-party transfers not involving a Relationship Agreement: $7,500 per transfer for 1–5 units, or $1,500 per unit for 6 or more units. Third-party transfers involving a Relationship Agreement: the greater of the standard fee or $150,000. Entity restructures: $2,500 total unless franchise agreement changes are required. Fees are minimums and may increase for the franchisor's consultant and counsel costs; a 50% non-refundable deposit may be required. Third-party transfers not involving a Relationship Agreement: $7,500 per transfer for 1–5 units, or $1,500 per unit for 6 or more units. Third-party transfers involving a Relationship Agreement: the greater of the standard fee or $150,000. Entity restructures: $2,500 total unless franchise agreement changes are required. Fees are minimums and may increase for the franchisor's consultant and counsel costs; a 50% non-refundable deposit may be required. |
| Renewal fee | $22,500 one-time Disclosed
The franchise agreement grants no renewal right. If the franchisor grants a successor agreement at its discretion, the fee for a Traditional Unit is the greater of $22,500 or one-half of the then-current initial franchise fee; for In-Line and End-Cap units the greater of $12,500 or one-half of the applicable then-current initial fee. A successor grant is also conditioned on the franchisee completing an offset, scrape/rebuild or major remodel at its own expense, which the FDD says currently costs about as much as building a new unit. The franchise agreement grants no renewal right. If the franchisor grants a successor agreement at its discretion, the fee for a Traditional Unit is the greater of $22,500 or one-half of the then-current initial franchise fee; for In-Line and End-Cap units the greater of $12,500 or one-half of the applicable then-current initial fee. A successor grant is also conditioned on the franchisee completing an offset, scrape/rebuild or major remodel at its own expense, which the FDD says currently costs about as much as building a new unit. |
| Royalty + ad fund (% of sales) | 9.8% Derived
|
Fee schedule (26 fees; 14 verified against the source, 12 single-pass)
Every recurring, conditional and one-time fee found in this FDD's Item 6 table (plus mandatory recurring costs disclosed in Items 7/11), each cited to its page and carrying its verification status: verified means two independent readings agreed or a tie-break re-inspection of the page decided it; single-pass means one reading captured it and it has not been independently confirmed (permitted only for fees that cannot move modeled economics — see the materiality rule). Amounts marked “not stated” are charged at then-current rates the FDD does not quantify and are never modeled as $0.
| Fee | Amount | Frequency | Mandatory | Verification | Cite | Notes |
|---|---|---|---|---|---|---|
| Period Franchise Fee | 5.5% of gross sales | monthly | Yes | verified (2-pass) | Item 6, p. 16 | Reduced to 2.75% for the first year for Units qualifying for the Urban Test Incentive Program. Payable via K-RISE by the 5th business day after each ~4-5 week accounting period (13/year), not a calendar month; 'monthly' used here as the closest available frequency enum value. |
| Period Marketing Fee (NAFA) | 4.25% of gross sales | monthly | Yes | verified (2-pass) | Item 6, p. 16 | Standard rate for current-form agreements. Franchisees still on the pre-2013 agreement form pay 4.5% total marketing contribution instead (see local-marketing-legacy-pre2013). Franchisor/affiliates also contribute 4.25% of Gross Sales from company-owned U.S. units; not all franchisees contribute proportionally. |
| Local store marketing allocation (pre-2013 form of Franchise Agreement) | 1.5% of gross sales | monthly | No | verified (tie-break) | Item 6, p. 21 | Applies only to existing franchisees still operating under the pre-2013 form of Franchise Agreement who opted not to accept the revised marketing provisions. A new franchisee signing the current form cannot elect it. Item 6 Note B(ii), verified on PDF page 21. Kept in the schedule for disclosure completeness only; model_treatment is not_applicable (Pass A used requires_assumption) so the 4.25% NAFA entry remains the sole percent_of_revenue marketing line. |
| All Access Fee | $750 | annual | Yes | verified (2-pass) | Item 6, p. 17 | Amounts subject to change under the franchisor's All Access Policy. |
| Digital Transaction Fee for Mobile, Web, Kiosk, Successful Voice AI & Delivery orders | $0 | per event | Yes | verified (tie-break) | Item 6, p. 17 | Amounts subject to change as part of the All Access Policy. Payable to us or an affiliate. Item 6 table, PDF page 17. |
| Gift Card Transaction Fee | $0 | per event | Yes | verified (tie-break) | Item 6, p. 17 | Payable to affiliate GCTB, LLC. Item 6 table, PDF page 17. |
| Additional Trainee Fee | $350 | per event | No | verified (tie-break) | Item 6, p. 17 | Tuition is included for the franchisee (if an individual) and the restaurant manager; the fee is charged for any additional trainees, and tuition may also be charged for non-mandatory courses. Item 6 table, PDF page 17, due before the beginning of training; Item 11 (PDF page 40) repeats the $350 per person figure. |
| Training Materials | Not stated | varies | No | verified (2-pass) | Item 6, p. 17 | Franchisee is not required to purchase all training materials from the franchisor. |
| Cost of Audit of Franchisee's Books | Not stated | per event | No | single-pass | Item 6, p. 17 | Contingent on an audit finding Gross Sales understated by 2% or more. [Listed by one verification pass only (A); not independently confirmed.] |
| Late charges | 18% of other | varies | No | verified (tie-break) | Item 6, p. 16 | Payable only on fees that are not paid when due. Item 6 table, PDF page 16. |
| Transfer Fee | Tiered (base $7,500) | one time | No | single-pass | Item 6, p. 17 | Subject to the franchisor's prior written consent to transfer. [Listed by one verification pass only (A); not independently confirmed.] One-time fee; listed for completeness, not part of ongoing recurring economics. |
| Relationship Agreement / MBOA Legal Fees | $20,000–$100,000 | one time | No | single-pass | Item 6, p. 18 | Only when the franchisor requires a Relationship Agreement and/or Market Build Out Agreement. [Listed by one verification pass only (A); not independently confirmed.] |
| Reimbursement of Insurance Expense | Not stated | varies | No | single-pass | Item 6, p. 18 | Only if franchisee fails to obtain required insurance. [Listed by one verification pass only (A); not independently confirmed.] |
| Successor Fee | $22,500 | one time | Yes | single-pass | Item 6, p. 18 | Payable upon execution of a successor agreement, roughly once per 20-25-year term. [Listed by one verification pass only (A); not independently confirmed.] |
| Extension Fee | Tiered (base $250) | per event | No | single-pass | Item 6, p. 19 | Only if the franchisor agrees, at its discretion, to temporarily extend the term for a remodel/relocation. [Listed by one verification pass only (A); not independently confirmed.] |
| De-identification Costs | Not stated | one time | No | single-pass | Item 6, p. 19 | Only if franchisee fails to de-identify the Unit as required at termination/expiration. [Listed by one verification pass only (A); not independently confirmed.] |
| Attorneys' Fees (prevailing party) | Not stated | per event | No | single-pass | Item 6, p. 19 | Applies to litigation under the Franchise Agreement and to transfers. [Listed by one verification pass only (A); not independently confirmed.] |
| Liquidated Damages | $11 | one time | No | single-pass | Item 6, p. 19 | Payable upon termination of the Franchise Agreement for certain specified reasons. [Listed by one verification pass only (A); not independently confirmed.] |
| Market Build Out Agreement - Missed Opening Penalty | $4,231 | monthly | No | single-pass | Item 6, p. 20 | Only if franchisee fails to timely open a required new Unit under a Market Build Out Agreement (also described in Item 12). [Listed by one verification pass only (A); not independently confirmed.] Same fee described in both Item 6 and Item 12. |
| System-One / Multi-One Merchandising Program Fee | $729–$744 | quarterly | Yes | verified (2-pass) | Item 6, p. 20 | Additional fees may be billed at Taco Bell's discretion for additional marketing materials. |
| Marketing, Advertising, Promotional and POP Materials | Not stated | varies | No | verified (2-pass) | Item 6, p. 20 | |
| EPR Fees | Not stated | varies | No | verified (tie-break) | Item 6, p. 20 | Arises only where extended producer responsibility laws covering packaging or food service ware apply; payable on demand to Taco Bell or an affiliate, which may be RSCS. Item 6 table, PDF page 20, due upon demand. |
| Grand Opening Expense | $5,000 | one time | Yes | single-pass | Item 6, p. 16 | Must be spent within 6 months of opening; reimbursable up to $5,000 if proof is submitted within 9 months. Not required/reimbursed for Successor Agreements or license-to-franchise flips. [Listed by one verification pass only (A); not independently confirmed.] |
| Fees owed to us or our affiliates for required technology products and services | $6,000 | annual | Yes | verified (tie-break) | Item 11, p. 45 | Covers Annspire (Byte) POS, BOH/DMB/DT DMB/Front of House support, Elo (kiosk, TKDS, POS), Customer Care, Recommended Ordering, SmartHub software, Cortex and BigFix licence and maintenance, TKDS software, Tracks Labor & Inventory, and Windows/Office 365 licences. Item 11 table 'Estimated Costs for Computer and Electronic Technology Equipment in Units', PDF page 45; Item 6 (page 17) cross-refers to Item 11 for these fees. The FDD does not state whether the separately listed $750/year All Access Fee sits inside this estimate. |
| Fees owed to third-party vendors for required technology products and services | $15,500 | annual | Yes | verified (tie-break) | Item 11, p. 45 | Covers Armis cyber security, broadband and computer. Franchisees who choose not to use all franchisor-supplied FOH/BOH/broadband/payment systems must instead fund a formal security assessment by a Taco Bell-approved assessor at their own expense. Item 11 table, PDF page 45 (the row's bullet list continues onto page 46). Sourcing fees where RSCS facilitates acquisition are included in the estimate; taxes and shipping are not. |
| Computer & Electronic Technology One-Time Equipment Costs | $83,000 | one time | Yes | single-pass | Item 11, p. 46 | One-time per-restaurant equipment/installation cost payable chiefly to third-party vendors (DMB, kiosks, TKDS, SmartHub, POS hardware, etc.). [Listed by one verification pass only (A); not independently confirmed.] |
Fees are described as uniformly imposed and are paid electronically. Other charges disclosed in Item 6 include a $5,000 grand opening spend (reimbursable), audit costs if Gross Sales are understated by 2% or more, extension fees of $250 to $1,000 per month, de-identification costs, and estimated legal fees of $20,000 to $100,000 for negotiating a Relationship Agreement or Market Build Out Agreement. Liquidated damages on certain terminations equal the greater of $100,000 or 11% of the unit's Gross Sales for the last 12 months. Under a Market Build Out Agreement, missing an opening date triggers a $45,000 payment plus $4,231 per accounting period until the unit opens or ten years pass. Several published incentive programs can waive the initial fee and reduce or waive royalty and marketing fees for a limited period.
Financial performance (Item 19)
What the franchisor actually disclosedWho is represented: The Item 19 does not report actual historical sales for the Taco Bell system. It describes three site-forecasting tools made available to franchisees developing free-standing drive-thru units: Bell Point (built by Bain & Company from Taco Bell data) and third-party models from Kalibrate and SiteZeus. The only unit-level figures given are back-test results: each third-party vendor projected second-year annual Gross Sales for a sample of 183 existing units opened between January 1 and December 31, 2023 that had at least two years of Gross Sales data. That sample covers single-brand, free-standing units with drive-thrus and excludes multi-brand, in-line and licensed units. The FDD reports only the range of the projections and the share of projections that fell within 20% of actual sales; it does not report the actual average or median sales of those 183 units or of any other group of units.
Qualifications: Every figure in this Item 19 is model output, not reported operating history. The franchisor states plainly that, apart from these forecast tools, it makes no representation about the past or future financial performance of any company-owned or franchised unit. The Bell Point sales model is described as new and untested, with a margin of error of plus or minus 20% at a stated 59% confidence interval, meaning roughly 35% of the time a projection is off by more than 20%; the FDD's own illustration is that a $1,000,000–$1,100,000 projection implies a 65% chance of actual sales between $800,000 and $1,320,000. Bell Point also outputs a cash-on-cash return percentage derived from modelled EBITDA, and the FDD warns that the error on that figure is larger still than on the sales forecast. Margins of error come from back-testing rather than observed franchisee use, and the franchisor notes no post-audit accuracy data exists. The Kalibrate and SiteZeus ranges cover only single-brand, free-standing drive-thru units opened in 2023; multi-brand, in-line and licensed units were excluded, so they say nothing about the formats priced at the lower end of Item 7. Written substantiation is available to prospective franchisees on reasonable request.
View full Item 19 disclosure and tables
Taco Bell's Item 19 is a forecasting-tool disclosure rather than a sales disclosure. It tells a prospective franchisee what three site-selection models would predict for a location, and how accurate two of those models were when tested against units opened in 2023 — 61% of Kalibrate projections and 64% of SiteZeus projections landed within 20% of actual sales. It does not disclose the average or median annual sales, costs, margins or profits of any Taco Bell restaurant. The projection ranges quoted (roughly $0.6 million to $4.0 million of annual Gross Sales) are the spread of model outputs across a 183-unit sample, not a range of achieved results, and they should not be read as a typical or expected sales figure. A buyer who wants operating history has to obtain it from existing franchisees listed in Exhibit I, or, when buying an existing restaurant from the franchisor, from that restaurant's actual records, which the franchisor says it may provide.
| Metric | Subset | Value | Units | Period | Cite |
|---|---|---|---|---|---|
| Kalibrate model — lowest projected annual Gross Sales in the 183-unit back-test sample This is the bottom of the range of model projections, not of actual sales. | 183 single-brand, free-standing drive-thru units opened in 2023 Low | $826,707 | 183 | 2nd year, units opened in 2023 | FDD p.63 |
| Kalibrate model — highest projected annual Gross Sales in the 183-unit back-test sample Top of the range of model projections, not of actual sales. | 183 single-brand, free-standing drive-thru units opened in 2023 High | $3,621,383 | 183 | 2nd year, units opened in 2023 | FDD p.63 |
| Kalibrate model — share of projections within 20% of actual annual Gross Sales Accuracy measure of the forecast tool; the remaining 39% of projections were off by more than 20%. | 183 single-brand, free-standing drive-thru units opened in 2023 % of units | 61% | 183 | 2nd year, units opened in 2023 | FDD p.63 |
| SiteZeus model — lowest projected annual Gross Sales in the 183-unit back-test sample Bottom of the range of model projections, not of actual sales. | 183 single-brand, free-standing drive-thru units opened in 2023 Low | $616,474 | 183 | 2nd year, units opened in 2023 | FDD p.63 |
| SiteZeus model — highest projected annual Gross Sales in the 183-unit back-test sample Top of the range of model projections, not of actual sales. | 183 single-brand, free-standing drive-thru units opened in 2023 High | $3,991,919 | 183 | 2nd year, units opened in 2023 | FDD p.63 |
| SiteZeus model — share of projections within 20% of actual annual Gross Sales Accuracy measure of the forecast tool; the remaining 36% of projections were off by more than 20%. | 183 single-brand, free-standing drive-thru units opened in 2023 % of units | 64% | 183 | 2nd year, units opened in 2023 | FDD p.63 |
System health (Item 20)
Outlets, openings, exits and transfers by fiscal year · U.S. onlyView detailed Item 20 tables and source notes
| Fiscal year | Start | Opened | Terminated | Not renewed | Reacquired | Ceased — other | End | Transfers | Company-owned (end) |
|---|---|---|---|---|---|---|---|---|---|
| 2023 | 7,056 | 164 | 4 | 5 | 0 | 13 | 7,198 | 197 | 483 |
| 2024 | 7,198 | 183 | 1 | 5 | 7 | 27 | 7,341 | 39 | 498 |
| 2025 | 7,341 | 168 | 1 | 8 | 144 | 21 | 7,335 | 134 | 663 |
Disclosed 2026 Franchise Disclosure Document — Taco Bell Franchisor, LLC (Traditional FDD), Item 20, Tables 1–3 (PDF p. 65). Franchised units grew in 2023 and 2024 and then fell by 6 in 2025, entirely because the franchisor reacquired 144 franchised units that year — 102 in Florida, 23 in Georgia and 19 in South Carolina — which moved into the company-owned column and lifted company units from 498 to 663. Excluding reacquisitions, 2025 saw 168 openings against 30 closures (1 termination, 8 non-renewals, 21 other cessations). Terminations have been very rare across all three years (4, 1 and 1). Transfers to new owners were 197 in 2023, 39 in 2024 and 134 in 2025. One arithmetic inconsistency in the source: the Table No. 1 'Total' row for 2024 shows 7,681 at the start and 7,847 at the end, but the franchised and company-owned rows for 2024 end at 7,341 and 498, which sum to 7,839 — the figure the same table then uses as the 2025 starting total. The franchised and company-owned rows, which are the ones recorded here, foot correctly against Tables 3 and 4 in all three years. Counts exclude Taco Bell Express licences and international units.
Source data notes (11) — inconsistencies found in the FDD itself during verification
Our verification re-reads every table. Where the FDD's own printed tables disagree, we document the discrepancy rather than silently "fixing" it. Classes: B = arithmetic error in the source's derived column; C = the printed tables genuinely disagree; D = a legitimate definitional difference (e.g., transfers netted, explained by a footnote); E = unresolved ambiguity. Figures a material C/E issue puts in doubt are excluded from our derived metrics, scores and rankings.
- [B/minor] Table No. 1 2024: Table No. 1 prints Franchised 2024 Net Change = 157, but the same row's Units at Start (7,198) and Units at End (7,341) give 143, a 14-unit internal mismatch. The 2023 (142) and 2025 (-6) franchised net changes and all three company-owned net changes foot correctly. — Correct 2024 franchised net change is 143 (7,341 - 7,198). The start and end figures are the reliable ones: Table No. 3's TOTAL row on PDF page 71 foots exactly for 2024 (7,198 + 183 - 1 - 5 - 7 - 27 = 7,341), and I verified programmatically that Table No. 3's 50-51 state rows sum to its TOTAL row in all seven columns in each of 2023, 2024 and 2025. The printed 157 is an arithmetic error in the derived column only; the totals the site uses are corroborated and the 14-unit gap is 0.19% of start-of-year franchised units (7,198), well under the 0.5% threshold, with the direction of growth (positive) unchanged.
- [B/minor] Table No. 1 2024: Table No. 1's Total row for 2024 prints Units at End of Year = 7,847, but the component rows give 7,341 franchised + 498 company-owned = 7,839, an 8-unit overstatement. The Total row is internally self-consistent with its own printed Net Change of 166 (7,681 + 166 = 7,847), so the error is in the Total row rather than in the components. — The correct systemwide 2024 year-end figure is 7,839, corroborated three ways: Table No. 3 TOTAL franchised = 7,341 (page 71), Table No. 4 TOTAL company-owned = 498 (page 73), and Table No. 1's own 2025 Total 'Units at the Start of the Year' = 7,839 (page 65). Table No. 1 and Table No. 3 disagree only in this derived Total cell and Table No. 3 is corroborated, so the totals are not in doubt; 8 units is 0.11% of start-of-year franchised units and does not change the direction of growth. The error does not propagate: the 2025 row starts from the correct 7,839.
- [B/minor] Table No. 1 2025: Carry-forward mismatch: the 2025 Total row starts at 7,839 rather than the 7,847 printed as the 2024 Total year-end figure. — Same root cause as the 2024 Total end-of-year error, and the direction of the fix is settled by it: 7,839 is arithmetically correct (7,341 + 498) and the 2025 row is right, so no adjustment to 2025 is needed. 2025 also foots throughout (7,335 + 663 = 7,998; 7,998 - 7,839 = 159 = -6 + 165).
- [C/minor] Table No. 3 / Table No. 4 2024: The two status tables genuinely disagree on 2024 reacquisitions. Table No. 3 (page 70) shows Texas 2024: '617 20 0 0 7 2 628', i.e. 7 franchised Units Reacquired by Franchisor, and its TOTAL row (page 71) carries the same 7. Table No. 4 (page 72) shows Texas 2024: '69 1 0 0 0 70', i.e. 0 Units Reacquired from Franchisee, and its TOTAL row (page 73) shows '483 15 0 0 0 498' - zero reacquisitions in every state in 2024. Those 7 Units leave the franchised count without ever entering the company-owned count. — Unresolvable from the document, and left as printed: both tables foot internally and both TOTAL rows are corroborated by Table No. 1 (franchised 7,341; company-owned 498), so no unit total is in doubt - only the composition of 2024 franchised attrition is. Either Table No. 3 mislabels 7 Texas exits as reacquisitions (they may be closures or transfers) or Table No. 4 omits them. 7 Units is 0.10% of start-of-year franchised units. Correcting Pass B: this is NOT the same defect as the 8-unit Table No. 1 Total error (7 does not equal 8, and Table No. 1's 2025 start of 7,839 already reflects the component totals), so the two issues are independent.
- [D/minor] Table No. 3 / Table No. 4 2023: Table No. 3's footnote states that the Units Opened column can include Units the Company sold to franchisees, with the exact count in Table No. 4 Column 7. Table No. 4's TOTAL row shows 1 such Unit sold to a franchisee in 2023 and 0 in 2024 and 2025, so the FY2023 Table No. 3 TOTAL 'Units Opened' of 164 includes 1 company-to-franchisee sale rather than 164 new openings. — Legitimate table-definition difference, expressly explained by the printed footnote. Franchised openings from new development in 2023 were 163, with 1 additional unit entering the franchised base by purchase from the Company (Table No. 4 TOTAL 2023: 464 + 21 + 0 - 1 - 1 = 483, page 73). No total is wrong; only the openings metric needs the footnote caveat, and only for 2023.
- [D/minor] Table No. 3: Pass B observed that Table No. 3 is internally sound. Re-verified rather than assumed: each TOTAL row foots across (7,056 + 164 - 4 - 5 - 0 - 13 = 7,198; 7,198 + 183 - 1 - 5 - 7 - 27 = 7,341; 7,341 + 168 - 1 - 8 - 144 - 21 = 7,335), year-end figures carry forward into the next year's start, and a programmatic sum of the state rows matches the printed TOTAL row in all seven columns for all three years. — No defect. Recorded because it is the corroboration that makes the two Table No. 1 errors above minor rather than material: Table No. 3 is the reliable source for franchised unit counts.
- [D/minor] Table No. 3 / Table No. 4 2025: The 2025 reacquisitions reconcile exactly across the two tables: Table No. 3 shows 144 Units reacquired (Florida 102, Georgia 23, South Carolina 19) and Table No. 4 shows the same 102 / 23 / 19 by state and 144 in its TOTAL row, driving company-owned units from 498 to 663 (498 + 21 + 144 = 663). — No defect; verified. The contrast with 2024 is what isolates the 2024 reacquisition inconsistency above to that single year, and it confirms the large 2025 franchised decline is a reacquisition (refranchising reversal), not closures.
- [D/minor] Table No. 5: Table No. 5 reports 0 Franchise Agreements Signed But Unit Not Opened in all 43 listed states while projecting 184 new franchised Units and 25 new company-owned Units in the next fiscal year (TOTAL row, page 74). — Definitional, not an error. Item 5 confirms the Franchise Agreement is not prepared and sent until the balance of the initial franchise fee is paid at ground break: 'After your receipt of notification that we have approved your site location and upon ground break of the Unit, the balance of the initial franchise fee is due... After receipt of payment, we will prepare and send to you the Franchise Agreement'. A pipeline Unit is therefore a registered/approved site rather than a signed-but-unopened agreement, so a zero here does not contradict the 184 projected openings.
- [C/minor] Item 20 narrative: Fiscal-year labelling is inconsistent across the document: the Item 20 Exhibit I paragraph refers to 'the fiscal year ended December 30, 2025' while Table No. 5 is headed 'Projected Openings as of December 31, 2025' and the Exhibit I unit list is 'as of December 31, 2025' (all on PDF page 74); the Item 20 columns are labelled by calendar year 2023-2025 throughout. — A genuine printed inconsistency in date labels, one or two days apart, with no numeric consequence: every Item 20 table is presented on the same 2023/2024/2025 column basis and no figure depends on which of the two cut-off dates is used. No derived metric changes.
- [A/minor] Item 20 scope note: Pass B recorded that the Item 20 data 'excludes Taco Bell Express licences (and Hawaii, which uses a separate FDD)'. The printed scope note (page 74) says only: 'The data in the tabular charts above only includes franchises under this offering, including franchises that operate in the multi-brand format... It does not include information on licenses offered under the Taco Bell Express disclosure document.' It says nothing about Hawaii, and Hawaii is in fact reported in these tables - Table No. 3 shows Hawaii 32 to 30 to 30 to 30 units across 2023-2025 (page 68) and Table No. 5 projects 1 Hawaii opening (page 73). — Extraction error in Pass B's observation only; the document itself is fine. Correct scope statement: Item 20 covers all franchises offered under this FDD including multi-brand units, and excludes only Taco Bell Express licences. Hawaii units are included and must not be netted out of the unit counts.
- [D/minor] Item 20 narrative / Exhibit I: Item 20 states: 'Of the 35 franchisees listed in the closure/transferred section of Exhibit I, 17 are no longer Taco Bell franchisees. The other franchisees listed continue to have open Units and current Franchise Agreements with us.' — Not a discrepancy. Verified verbatim on PDF page 74; it is the franchisor's own qualification of the Exhibit I closure/transfer list, explaining that fewer than half of the listed names actually left the system. No table figure is affected, but the 35/17 split should not be read as 35 departures when summarising attrition.
Company-owned outlets (Table 4)
| Year | Start | Opened | Reacquired from franchisee | Closed | Sold to franchisee | End |
|---|---|---|---|---|---|---|
| 2023 | 464 | 21 | 0 | 1 | 1 | 483 |
| 2024 | 483 | 15 | 0 | 0 | 0 | 498 |
| 2025 | 498 | 21 | 144 | 0 | 0 | 663 |
Read: How to read Item 20.
Ownership and operations
Items 11, 12, 15, 17Owner-operator required Disclosed
- Source
- 2026 Franchise Disclosure Document — Taco Bell Franchisor, LLC (Traditional FDD)
- Document
- FDD 2026, issued 2026-03-26
- Item
- Item 15
- Page
- PDF p. 52
- Obtained
- Wisconsin Department of Financial Institutions — Franchise Registration Search, file 640472
Item 15 requires the franchisee to devote full time, best efforts and constant personal attention to day-to-day operations. The franchisor may authorise the franchisee to name an employee as unit supervisor, in which case that person must complete the training programme and devote full time to the unit; the supervisor need not hold equity. Where the franchise is held through an entity, the franchisee remains personally obliged to devote full time unless the franchisor agrees otherwise. The franchisee or a qualified restaurant manager must live within roughly one hour's driving time of the unit.
View operating requirements, territory and contract term
| Owner involvement (Item 15) | Owner-operator required Disclosed
Item 15 requires the franchisee to devote full time, best efforts and constant personal attention to day-to-day operations. The franchisor may authorise the franchisee to name an employee as unit supervisor, in which case that person must complete the training programme and devote full time to the unit; the supervisor need not hold equity. Where the franchise is held through an entity, the franchisee remains personally obliged to devote full time unless the franchisor agrees otherwise. The franchisee or a qualified restaurant manager must live within roughly one hour's driving time of the unit. Item 15 requires the franchisee to devote full time, best efforts and constant personal attention to day-to-day operations. The franchisor may authorise the franchisee to name an employee as unit supervisor, in which case that person must complete the training programme and devote full time to the unit; the supervisor need not hold equity. Where the franchise is held through an entity, the franchisee remains personally obliged to devote full time unless the franchisor agrees otherwise. The franchisee or a qualified restaurant manager must live within roughly one hour's driving time of the unit. |
|---|---|
| Initial training | The franchisee and one manager must complete the management training programme to the franchisor's satisfaction. It is offered on an as-needed basis and runs a minimum of 7 weeks, extending to 8 weeks depending on the size and location of the restaurant or organisation, with additional time if the unit is multi-brand. It combines web-based e-learning, on-the-job training and classroom work, is delivered by a certified restaurant training manager in an approved company or franchise training restaurant, and should finish 4 to 6 weeks before the scheduled opening. Tuition for the franchisee and the restaurant manager is included; additional trainees cost $350 per person. The franchisee pays all travel and living costs. At least one manager per unit must hold food safety certification, renewed every three years. UnresolvedUnresolved after two independent readings and a tie-break: record "The franchisee and one manager must complete the management training programme to the franchisor's satisfaction. It is offered on an as-needed basis and runs a minimum of 7 weeks, extending to 8 weeks depending on the size and location of the restaurant or organisation, with additional time if the unit is multi-brand. It combines web-based e-learning, on-the-job training and classroom work, is delivered by a certified restaurant training manager in an approved company or franchise training restaurant, and should finish 4 to 6 weeks before the scheduled opening. Tuition for the franchisee and the restaurant manager is included; additional trainees cost $350 per person. The franchisee pays all travel and living costs. At least one manager per unit must hold food safety certification, renewed every three years."; Pass A 'Training is delivered by a certified restaurant training manager in an approved company-owned restaurant (not a franchise-owned location); all other summarized details (duration, structure, fees, food-safety recertification) are accurate.'; Pass B "You and one manager must successfully complete the management training program: a minimum of 7 weeks, extendable to 8 weeks depending on restaurant/organization size and location (additional time if the Unit is multi-brand). Delivery is web-based/e-learning plus on-the-job and classroom training, roughly 50 hours per week, at an approved company-owned |
| Multi-unit / development options | The franchise agreement grants no options or rights of first refusal to acquire additional franchises. Multi-unit growth is handled through separate instruments: a Market Build Out Agreement, typically with a five-year term, may be required when a franchisee buys existing units from the franchisor or another franchisee and obliges the buyer to develop specified new units, with a $45,000 development fee per new unit credited against that unit's initial franchise fee. Existing franchisees may also participate in the 10K Trade Areas programme by paying a $10,000 non-refundable Trade Area Fee to secure an unlocked trade area, credited against the initial franchise fee for a unit committed to that area. The franchisor states it may set limits on how many units any franchisee may own. Disclosed
|
| Territory (Item 12) | No territorial protection or exclusivity is granted. The franchise agreement licenses the trademarks only for a unit at a specified location, and the franchisor states the franchisee has no right to prevent other uses of the marks however close they are. The franchisee may face competition from other franchisees and licensees, from company-owned units, from other channels of distribution, and from sister YUM brands (Pizza Hut, KFC, Habit Burger Grill), which may locate anywhere. The franchisor applies an Integrated Expansion and TBX Development Policy when evaluating new sites, and may grant impact protection by separate transaction or temporary policy at its discretion; buyers of existing units from the franchisor may be required to waive such protection for the whole term. Disclosed
|
| Initial term | 25 years Disclosed
25 years for a new Traditional Unit. A new In-Line or End-Cap Unit is 10 years, and conversion of an existing non-Taco Bell quick-service building is 20 years. Successor agreements run 20 years for a Traditional Unit and 10 years for In-Line/End-Cap. The franchisor reserves the right to offer a 5-year term for atypical locations. Terms on units bought from the franchisor may be shortened to match the lease or the age of the unit. |
| Renewal | The franchise agreement grants no renewal rights. A franchisee may request a successor franchise, which the franchisor may grant at its sole discretion if the franchisee is operationally and financially approved under then-current guidelines, upgrades or relocates the unit, signs a release and the then-current agreement (which may have materially different terms), and pays the successor fee. The required upgrade is an offset, scrape/rebuild or major remodel chosen by the franchisor; the FDD states the cost of an offset or scrape/rebuild is currently comparable to building a new unit. A Traditional successor term is 25 years after an offset or scrape/rebuild and 20 years after a major remodel. A separate In-Line 10+10 Addendum can grant one 10-year successor term subject to a mid-term upgrade and other conditions. Disclosed
Item 6 note (iv) states the Traditional successor term is 25 years after an offset or scrape/rebuild and 20 years after a major remodel, while the Item 17 table states 20 years for a successor to a Traditional Unit. Both readings are recorded here rather than reconciled. |
Risk and legal observations
Items 3, 4, 8, 15, 17 — summarized neutrallyLitigation: None disclosed Disclosed · Bankruptcy: None disclosed Disclosed
View legal disclosures, restrictions and guarantees
| Litigation (Item 3) | None disclosed Disclosed Item 3 reports no matters in any category — none for the franchisor, none for predecessors, parents or affiliates, and no franchisor-initiated actions against franchisees. The document states that no litigation is required to be disclosed in this Item. |
|---|---|
| Bankruptcy (Item 4) | None disclosed Disclosed Item 4 states that no bankruptcy is required to be disclosed. |
| Personal guaranty | Required Disclosed
Where the franchisee is an entity, all legal and beneficial holders of equity must personally guarantee performance of the franchise agreement. A spouse holding a beneficial interest solely by reason of marriage is exempt. The guaranty form is Exhibit B-2. |
| Non-compete | During the term the franchisee, its immediate family, employees, shareholders and associates may hold no interest in a restaurant business that prepares or sells Mexican-style food, other than up to 10% of the stock of a publicly traded company, and may not serve Mexican-style menu items at the unit or anywhere else other than the franchisor's own. After the franchise ends the same restriction applies for one year, but only where the franchisor terminated for the franchisee's breach and only within a 10-mile radius of the unit. Disclosed
|
| Transfer restrictions | Any sale, assignment, encumbrance or grant of a security interest in the franchise or in the restaurant assets is a transfer requiring the franchisor's consent, which it says will not be unreasonably withheld. Conditions include no existing default, all amounts paid current, a signed release, payment of the transfer fee, the transferee completing training and providing biographical and financial information, and the transferee signing the then-current franchise agreement. The franchisor may also condition consent on the transferee signing a Market Build Out Agreement or a Relationship Agreement with a letter of credit and guaranty, may cap how many units one franchisee may own, and may refuse consent to a sale of all of a franchisee's units to a single buyer. The franchisor holds a right of first refusal exercisable within 30 days, over one, several or all units. On the franchisee's death or disability, heirs must notify the franchisor within 120 days; if the franchisor disapproves them they have six months to sell, after which the franchisor may buy the business at fair market value. Disclosed
|
| Termination / non-renewal | The franchisor may terminate for any of several listed violations, including any material breach. Certain monetary and operational defaults carry a 30-day cure period; a long list of defaults is non-curable, including an untrained unit manager, denial of access to the unit, unauthorised transfer, loss of possession, felony conviction, material misrepresentation in the application, a bankruptcy petition, a pattern of repeated defaults, and failure to complete the required mid-term upgrade. The franchisor may also terminate if provisions on fee payment or trademark preservation are held invalid. If the franchisee terminates without a material breach by the franchisor, that is itself a default and the franchisee owes liquidated damages equal to the greater of $100,000 or 11% of the unit's Gross Sales for the previous 12 months. A default by the franchisee or its affiliates under one agreement is deemed a breach of every other agreement with the franchisor or its affiliates. Disclosed
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| Supplier restrictions (Item 8) | Essentially 100% of purchases and leases of furniture, fixtures, equipment, smallwares, food and paper must meet the franchisor's specifications and come from suppliers it approves. McLane Foodservice is a national approved distributor of food and supplies; Wasserstrom and RSCS handle equipment, smallwares and some IT hardware. The franchisor and its affiliates are approved suppliers of required computer and information technology hardware and support, and affiliates may sell existing units and lease real estate to franchisees. For the fiscal year ended December 30, 2025 the franchisor disclosed affiliate revenues of approximately $52,441,072 from technology hardware and support, approximately $35,885,061 from leases to franchisees, and $157,250 earned by YRSG for development services. The franchisor estimates that required purchases and leases represent roughly 40% to 70% of the cost of establishing a unit and about 40% of operating expenses. It reserves the right to change approved suppliers and to designate itself or an affiliate as sole approved source. Disclosed
|
| Dispute resolution | The franchise agreement provides no arbitration or mediation. Suits must be brought in state or federal court in Orange County, California, and New York law governs. The cover page carries a state-required risk notice that out-of-state litigation may cost more and may lead to a less favourable settlement. The prevailing party in litigation is entitled to reasonable attorneys' fees. Separate agreements differ: the Development Services Agreement provides for arbitration in Jefferson County. Disclosed
|
- No territorial protection or exclusivity of any kind is granted under the franchise agreement (Item 12).
- The franchise agreement carries a mid-term upgrade obligation whose cost the franchisor does not estimate; failure to complete it on time is a non-curable default (Item 6 note (iii), Item 17).
- There is no right of renewal. A successor agreement is discretionary and conditioned on an offset, scrape/rebuild or major remodel that the FDD says currently costs about as much as building a new unit (Item 6 note (iv)).
- In 2025 the franchisor reacquired 144 franchised units, concentrated in Florida, Georgia and South Carolina, turning franchised unit growth negative for the year (Item 20 Table No. 3).
- Cross-default: a breach by the franchisee, its affiliates or owners under one agreement is deemed a breach of every other agreement with the franchisor or its affiliates (Item 17 provision (x)).
- Under a Market Build Out Agreement, missing a required opening date triggers a $45,000 payment plus $4,231 per accounting period until the unit opens or ten years pass (Items 6 and 12).
- Item 7 estimates exclude the up to $83,000 of one-time per-restaurant technology costs disclosed in Item 11.
- The franchisor may set limits on the number of units a franchisee may own and may withhold consent to a sale of all owned units to a single buyer (Item 17 provision (m)).
Summaries are neutral paraphrases of the cited document and are not legal advice. Read the full Items in the current FDD and consult a franchise attorney.
Illustrative unit economics
Not disclosedNo model is offered for Taco Bell because no annual average unit sales disclosed in Item 19. We do not manufacture estimates where the disclosure does not support them.
Sources and provenance
Primary source: 2026 Franchise Disclosure Document — Taco Bell Franchisor, LLC (Traditional FDD) · issued 2026-03-26. Find the FDD at Wisconsin Department of Financial Institutions — Franchise Registration Search. We cite source pages and do not redistribute PDFs.
View all sources, provenance and verification notes
| Document | Obtained from | Dates | Status |
|---|---|---|---|
| 2026 Franchise Disclosure Document — Taco Bell Franchisor, LLC (Traditional FDD) Registry file 640472 · 484 pages Wisconsin registration effective March 27, 2026. This is the Traditional Taco Bell FDD. Taco Bell Express units are offered under a separate disclosure document that was not reviewed here, and franchises in Hawaii are offered under a separate document. | Wisconsin Department of Financial Institutions — Franchise Registration Search | Issued 2026-03-26 Retrieved 2026-08-29 | Newest available at retrieval |
AI-assisted extraction from the archived FDD text, independently machine-verified against the cited source (two passes plus tie-break); not human-reviewed. Extracted 2026-08-29. Last updated 2026-09-03. AI-assisted extraction independently machine-verified against the cited source document (2026-09-01): two independent AI reading passes plus tie-break re-inspection of every disagreement; 63 of 71 material fields confirmed (60 with the exact page citation re-confirmed), 1 corrected, 1 unresolved, 7 confirmed not disclosed. No human has reviewed this profile. Fiscal year covered: FY2025 (ended December 30, 2025). See how we use AI and verify data.
Fields flagged as uncertain (5)
- /investment/franchise_fee_low and /investment/franchise_fee_high — recorded as the $45,000 Traditional Unit initial franchise fee stated in Item 5. The cover page also describes $27,250 payable to an affiliate for the first unit only; the FDD presents that as a separate development-services and ADA-inspection cost the franchisor 'may require', not as part of the initial franchise fee, so it is excluded from the fee figures and shown as its own Item 7 line item.
- /fees/technology — the FDD gives maxima ('up to') rather than fixed charges and splits them between the franchisor/affiliates (up to $6,000 per year) and third-party vendors (up to $15,500 per year), with up to $83,000 one-time. The $6,000 franchisor/affiliate figure is recorded as the value; the remainder is described in the note and in other_recurring.
- /operations/owner_involvement — Item 15 requires the franchisee's own full-time personal attention but permits a franchisor-authorised employee supervisor who must also devote full time and need not hold equity. Recorded as owner_operator_required because the manager option depends on franchisor authorisation.
- /operations/renewal and /operations/term_years — Item 17 gives a 20-year successor term for a Traditional Unit while Item 6 note (iv) gives 25 years after an offset or scrape/rebuild and 20 years after a major remodel. Both are recorded; the initial term of 25 years is not in dispute.
- /units/as_of — Items 8 and 11 state the fiscal year ended December 30, 2025, while Item 20 Table No. 5 and the Exhibit I reference use December 31, 2025. The fiscal year end date is used.
Extraction notes (7)
- This record covers the Traditional Taco Bell FDD (Wisconsin file 640472, issued March 26, 2026). Taco Bell Express units are franchised under a separate disclosure document that was not reviewed, and Hawaii franchises are offered under yet another document. Item 20 counts exclude Express licences and international units.
- Item 20 Table No. 1 does not foot for 2024: the Total row shows 7,847 units at year end, but the franchised (7,341) and company-owned (498) rows sum to 7,839 — which is also the starting total the same table uses for 2025. The franchised and company-owned figures recorded here reconcile exactly with Tables 3 and 4 for all three years.
- Item 7's Traditional and In-Line tables both foot exactly to their stated totals on the low and high columns.
- Item 19 is a projection-type financial performance representation built on site-forecasting tools. No actual average, median or per-unit sales figure is disclosed anywhere in the reviewed document, so headline_auv, headline_median and annualized_auv are all null.
- Bell Point outputs an illustrative cash-on-cash return derived from modelled EBITDA, but the FDD discloses no actual cost or profit data, so includes_cost_or_profit_data is false and no profit metric is recorded.
- Verification 2026-09-01: correct /investment/franchise_fee_low 45000 → 25000
- Verification 2026-09-01: flag_unresolved /operations/training
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