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How Much Does a Taco Franchise Cost?

How Much Does a Taco Franchise Cost

Are you interested in learning how much a taco franchise costs? If so, you’re not alone.

At Del Taco, some of the most common questions we receive are related to costs, fees, and royalties.

In this article, we will go over how much it costs to start a taco franchise.

Initial Franchise Fee

One of the first costs you’ll be responsible for paying in order to start a taco franchise is the initial franchise fee.

This payment is typically due when you sign the Franchise Agreement for each restaurant you plan to operate.

At Del Taco, our initial franchise fee is $35,000 plus a promotional fee of $10,000 for a single location.

For multiple locations, you must pay the full franchise fee of $35,000 for the first restaurant plus a $10,000 deposit on the franchise fee for each additional restaurant.

Keep in mind - these fees are nonrefundable, and their amount will vary based on the brand of taco franchise you’re interested in.

Ongoing Royalties

Most taco franchises require their franchisees to pay ongoing royalty fees on a regular basis.

For example, the royalties you’ll be responsible for as a franchisee with Del Taco are:

  • 5% Royalty of Net Sales
  • 4% Marketing Fee of Net Sales

In this case, net sales would include all revenue from your restaurants, except for refunds and sales or similar taxes.

At Del Taco, both of these royalties are paid weekly by electronic funds transfer.

What Do I Get for My Franchise Fee & Royalties?

Paying your initial franchise fee and ongoing royalties will grant you access to a wide variety of assets and services designed to help you run your restaurants.

Here are a few of the items you’ll receive:

  • Use of the Del Taco® brand name, systems, logo, and store design.
  • A comprehensive Management Training Program designed to prepare you for daily operation of your restaurant.
  • Site selection support.
  • Construction & design support. Conceptual floor plans and site plans are provided. These must be sealed by an approved architect before submitting them to local government entities.
  • Step-by-step assistance through the process of new-store layout, ordering of equipment, furniture, and fixtures.
  • Support and training assistance in pre-opening and opening.
  • Ongoing support from: Franchise Business Consultants, Culinary & Innovation Team, and R&D. Plus, purchasing, distribution, and marketing support for your restaurants.

When you pay your franchise fees and royalties, it will ensure you have the best possible resources to run your business and bring customers to your location.

How Much Does a Taco Franchise Cost?

The total number for your overall costs of opening a taco franchise will depend on a wide variety of factors.

One of the best ways to figure out how much money you’ll need is to research the estimated initial investment for each brand.

The estimated initial investment for a Del Taco Franchise is $812,700 - $2,467,500 and includes the initial franchise fees, training costs, inventory, build-out expenses, computer hardware and software, insurance and three months working capital.

Your investment will vary for each Del Taco location depending on the market you choose. Please refer to Items 5 and 7 in our Franchise Disclosure Document (FDD) for a clear representation of the total fees and investment needed.

This is simply an estimate, and the actual cost can vary largely depending on the site-specific conditions and requirements for each location.

Multi-Unit Franchise Incentives

You might be able to lower your overall taco franchise costs by asking if multi-unit franchise incentives are available.

Del Taco offers an incentive for multi-unit franchisees who choose to sign up for three or more stores under our Development Incentive Program.

Under the Development Incentive Program for qualified buyers, if you sign a Development Agreement for a minimum of three (3) restaurants to be developed and opened under the development schedule during the time frames specified in the Development Agreement, and certain other requirements are met, you may be eligible for the following incentive:

The Royalty (which is currently 5% of Net Sales) will be reduced to: (i) 1% of Net Sales for the first year; (ii) 2% of Net Sales for the second year; (iii) 3% of Net Sales for the third year; (iv) 4% of Net Sales for the fourth year; and (v) 5% of Net Sales for all subsequent years.

Check Out These Additional Resources

We hope this article gave you a better understanding of how much a taco franchise costs.

At Del Taco, we work with our franchisees every step of the way in order to bring their business ownership dreams to life.

Here are some additional online resources you may like to check out:

If you have any questions, please contact our franchise sales and support team.

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