Taco Bueno has been a leader in the Tex-Mex fast-food industry for over fifty years. Since they began franchising in 2004, they have opened over 20 franchised locations in the South and the Midwest United States. Here’s what you need to know if you’re considering franchising a Taco Bueno.
When you submit your application to franchise a Taco Bueno location, you’ll need to pay a franchise fee of $35,000. If you want to open more than one location, you will need to pay an extra fee for each additional restaurant.
Your overall initial investment into this franchise may be anywhere from $640,000-$1,600,000. Keep reading to learn more about everything involved with franchising a Taco Bueno restaurant location.
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Cost Breakdown of a Taco Bueno Franchise
If you submit a franchise application to Taco Bueno, you’ll need to pay a franchise fee of $35,000. However, many entrepreneurs choose to franchise more than one location.
If you wish to apply for two or more franchises, you will have to pay a $25,000 fee for each additional location.
Depending on many factors, your initial investment could be anywhere from $640,000-$1,600,000. However, the average initial investment is right around $1,100,000.
Once your restaurant is up and running, you will have to pay regular royalty and advertising fees to the company.
For royalties, you’ll pay the company 5% of your gross sales. The advertising fee will account for another 5% of your gross sales.
The initial term of your franchise agreement will be 20 years. If you choose to renew your franchise after this initial period, you can do so for another ten years.
When you renew this term, you will have to pay a $10,000 renewal fee.
About Taco Bueno
Since 1967, Taco Bueno has had a mission to provide customers the freshest, most authentic Tex-Mex food. After over 50 years, Taco Bueno has made sure to stay true to their roots.
Everything you can purchase from Taco Bueno is hand-crafted right in their kitchen using authentic recipes.
Their commitment to providing fresh food at quick-service restaurant prices has given them an extremely loyal customer base over time.
Who Owns Taco Bueno?
Over the years, Taco Bueno has seen quite a few changes in ownership. Back in 1967, Bill J. Waugh founded Taco Bueno in Abilene, TX. In 1981, the company was then acquired by Unigate, a British food manufacturing company.
Fifteen years later, in 1996, Unigate sold Taco Bueno to CKE Restaurants. This company is better known as the Carl’s Jr. franchise company. Almost 20 years later in 2005, Taco Bueno was purchased by Palladium Equity Partners.
After being purchased by Palladium Equity Partners, CEO Ed Lambert oversaw the company for ten years. In 2015, the company was sold again to TPG Growth, with Mike Roper acting as CEO.
When Roper left in 2018, Omar Janjua became the new Taco Bueno CEO. Finally, Taco Bueno was acquired by Sun Holdings in 2019. Omar Janjua remains the CEO.
Benefits of Franchising a Taco Bueno Location
Taco Bueno has always had a strong and positive relationship with their loyal customers.
These customers, known as “Buenoheads,” love the authentic recipes and great value Taco Bueno provides. Their products have stood the test of time, and after over 50 years in business, they’re still proven sellers.
Part of this success is thanks to the company’s strategic approach to branding and marketing. They’ve seen very positive results, and have even started the “Buenohead Club” to offer special promotions to repeat customers.
Mexican food has remained the number one ethnic food in the restaurant industry. They’ve built a loyal customer base and strong brand identity by offering products that customers want at great prices.
Taco Bueno is proud to share their secrets to success with franchise owners. They truly want each location to have immense success, and do whatever they can to support each store.
Is Taco Bueno Profitable?
Taco Bueno continues to operate with impressive profits. In both weak and strong economies, they’ve seen significant growth over the years.
Taco Bueno recently experienced a staggering 30% three-year growth, with average unit sales around $1.2 million.
By 2001, Taco Bueno’s total sales had exceeded a whopping $100 million.
Your particular store’s profits will depend on many factors, such as location and recurring costs. However, it’s safe to say you should have no problems becoming profitable.
Criteria to Become a Franchise Owner
To be considered as a franchisee, you will need a net worth of at least $1,500,000. You will also need a liquid capital of $450,000 or more.
You can borrow up to 80% of the capital, but Taco Bueno requires you to have at least 20% equity in your store.
In addition, Taco Bueno values a strong work ethic and previous restaurant operating experience. They look specifically for franchisees with an enthusiasm for what they’re doing and strong management skills.
Owners will need to adhere to all of the standards set forth by the company. Taco Bueno will expect you to turn a profit within a reasonable period, and they prefer candidates with a “hands-on” management style.
Although hands-on applicants are preferred, absentee ownership is allowed.
This means that, even though you own the business, someone else oversees the day-to-day operations. At this time, approximately 50% of all franchise owners are absentee owners.
You must run your franchise full-time. In addition, you will need a minimum of four employees to operate at the company’s standards.
What is the Application Process for Franchisees?
Before work can officially begin on your franchise, you’ll need to go through Taco Bueno’s ten-step process. This ensures there are no loose ends on either side and that you are fully prepared to run your business.
The First Steps
First, fill out the web inquiry form for potential franchisees, or contact the company directly. Once you do this, they will call you for an initial discussion. During this call, you’ll discuss your goals and locations of interest.
Review the Franchise Disclosure Document
If the initial call goes well, Taco Bueno will send you the franchise disclosure document (FDD) to review. To fully understand your legal obligations, they recommend going over the document with your attorney and accountant.
Fill Out Your Application
After reviewing the FDD, it’s time to submit your application. You will need to pay the franchise fee of $35,000 (and $25,000 for each additional location) at this time.
If you will be using any loans to finance your venture, submit the approval documents with your application.
Create Development Schedule and Discuss Territory
If your application is approved, you will start discussing development with the company. In this step, the real estate development team will help you choose your location.
The company recommends conducting a demographic survey before finalizing a location. The area you choose should be densely populated, receptive to Mexican food, and have plenty of traffic flow outside.
The Final Steps
After choosing your location, you’ll go to Dallas for Discovery Day. Here, you’ll meet with the staff who will help you along your journey and learn more about the company.
The Franchise Committee will then meet to (hopefully!) approve your franchise. Finally, the franchise and development agreements will be executed.
You’ll start to design your business and operations plan, working with real estate, construction, and operations staff.
Preparing for the Grand Opening
If all goes well, your location should be ready to open within one year of signing. Representatives from Taco Bueno can guide you as you purchase inventory, equipment, and other supplies.
What Training and Assistance is Provided?
Taco Bueno provides franchise owners with all the support they need before, during, and after the Grand Opening.
You’ll work with experienced restaurant operators who will help you at every stage, from purchasing inventory to hiring staff.
This company truly believes that mutual support and partnership with their franchise owners help improve the whole brand.
Before your Grand Opening, you will go through a specialized 230-hour training program to ensure everything runs smoothly.
Ten hours of this training will be in a classroom setting, while the other 220 consists of on-the-job experience.
During this time, you’ll gain the necessary skills and experience to operate a Taco Bueno store.
Ongoing Support Provided
Taco Bueno’s support does not end after your training program is complete!
Throughout the twenty-year franchise term, Taco Bueno offers the following support services
Online support
A toll-free phone line
Newsletters
Proprietary software
Field operation support
Secondary site selection
A franchisee intranet platform
Updated safety and security procedures
Invitations to meetings and conventions
Support for computer systems and other technology
Marketing Support Provided
Taco Bueno wants each location to experience immense success.
To ensure this, they go above and beyond to provide the following marketing support to franchise owners
Email marketing
SEO and social media
Advertising templates
National media advertising
Cooperative advertising
Regional advertising
Website development assistance
Access to the company’s loyalty program and app
Final Thoughts
Opening a Taco Bueno franchise location can prove to be a very lucrative investment. To get started, you’ll need to pay a franchise fee of $35,000 to secure your franchise for 20 years.
While your total initial investment will vary, expect it to be anywhere from $640,000-$1,600,000.
The average initial investment is approximately $1,100,000, but this depends heavily on regional factors.
