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Taco Bell

In: Business and Management

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Introduction

The following report shows the reasons as to why Taco Bell restaurants should be an investment. This report is designed for Ms. Yolanda Yorbon, the current boss at Yolanda’s Yummy Restaurant. She has asked me and my research team to do some investigative work and present it in a long formal report. This will help her to determine which fast food franchise she should make an investment in between McDonald’s, Taco Bell, and Burger King. I will be examining the background behind the business, start-up costs, commitment, locations, requirements to work, requirements to franchise, and the ongoing fees for Taco Bell. Ms. Yolanda’s expertise is in the area of Mexican food. She really wants to be successful in other restaurant business ventures, and this is the way to provide the answers.
Taco Bell Corp., based in Irvine, California, is the nation's leading Mexican-style chain. Taco Bell was founded by Glen Bell who first opened a hot dog stand in 1946 when he was 23 years old. Six years later, he sold the stand and opened a new one two years later, this time selling tacos under the name of Taco-Tia. Bell sold the El Tacos to his partner and built the first Taco Bell in Downey in 1962. Taco Bell Corp. started franchising in 1964. In 1970, Taco Bell went public with 325 restaurants. In 1978, PepsiCo purchased Taco Bell from Glen Bell. Taco Bell sells tacos, burritos, quesadillas, and many other Mexican foods. This would be great for Ms. Yolanda because her expertise is in Mexican food.
Before starting up a Taco Bell franchise, Ms. Yolanda needs certain qualifications. In order to start up a Taco Bell a person must have general business experience, industry experience, and marketing skills. Based on Ms. Yolanda past food industry experience I believe she meets all the qualifications if she chose to start up a Taco Bell.
The start-up cost is very expensive for Taco Bell. Ms. Yolanda would be looking at a total investment between $ 1,300,000-$2,500,000. There is an Initial Franchise Fee of $45,000. I have found this total investment to be very expensive compared to other fast food chains. Also there is a Royalty Fee of 5.5%. When starting a Taco Bell there is a commitment. The term of agreement is a minimum of 20 years. If Ms. Yolanda were to choose Taco Bell she would most likely be invested in it for a very long time.

There are over 6000 Taco Bell restaurants in the world. There are about 500 Taco Bells outside the U.S. including China, Australia, and Russia. Taco Bell Corp. serves more than 2 billion customers each year. It has been the world’s largest Mexican quick-service franchise for the past 38 years.

If Ms. Yolanda decides to invest into Taco Bell, her employees would need training. First of all employees must read the employee handbook. Taco Bell requires that the franchisee and one manager successfully complete its training program. This handbook will help them learn about workplace rules, policies and procedures. Next they would follow around an educated employee and see how they work in the workplace. There are four major positions when working here, team member, shift lead, assistant manager and restaurant general manager.

After Ms. Yolanda gets over all the start-up costs and initial fees, she would still have on going fees. There is an ongoing 4.5 % marketing fee, and 5.5% royalty fee. The additional on-going costs include but not limited to training materials, getting books audited, extension fee, successor fee, and liquidated damage.

Conclusion Taco Bell Corp. is a very prolific franchise. However it is very expensive to start-up. If Ms. Yolanda has the money and the time to put out there to invest in to a Taco Bell, I believe it will be well worth it.

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