Here's what it costs to open a Taco Bell restaurant (YUM)

Here's what it costs to open a Taco Bell restaurant (YUM)

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Kate Taylor

• The cost of opening a new Taco Bell restaurant is between $1.2 million and $2.6 million.
• Taco Bell also charges a $45,000 franchise fee, an ongoing royalty fee equal to 5.5% of gross sales, and a marketing fee equal to 4.25% of gross sales. 

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Opening a Taco Bell restaurant requires a lot of cash.

Startup costs, which include construction expenses and a $45,000 franchise fee, average between $1.2 million and $2.6 million for a new restaurant, according to the company's franchisee disclosure document.

The costs are slightly lower — between $175,000 and $1.4 million — for franchisees to acquire an existing Taco Bell restaurant.

Once the restaurant is up and running, the company charges an ongoing royalty fee equal to 5.5% of gross sales and a marketing fee equal to 4.25% of gross sales. 

If successful, the restaurant will bring in annual sales of at least $1.5 million, which is what the average Taco Bell restaurant generated last year, according to QSR magazine.

Taco Bell's franchisee startup costs are similar to those of McDonald's, which requires an initial investment of between $1 million and $2.2 million.

Subway, by comparison, is far less expensive, costing between $105,800 and $393,600, according to the company.

But the average Subway restaurant generates only $422,000 in sales per year.

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SEE ALSO: Chain restaurants are now required to post calorie counts — and these meals are the biggest offenders

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May 13, 2018 at 04:54PM