Taco John’s: Franchise Costs, Fees, Profit & Locations

REPORTED COST TO GET IN:

REPORTED ROI (Item 19):

Company Overview

Taco John's is a Mexican-inspired fast-food restaurant franchise headquartered in Cheyenne, Wyoming.

Taco John’s, which was established by John Turner in 1968, began as a single taco stand in Cheyenne. The restaurant soon gained popularity for its unique tacos and bold flavors. Over time, Taco John's expanded and became one of the largest Mexican fast-food chains in the United States, offering a variety of Tex-Mex-inspired menu items such as tacos, burritos and nachos. Today, Taco John's operates and franchises nearly 400 restaurants in 23 states.

Business Model

Taco John's operates within the Mexican Quick-Service Restaurant (QSR) segment, positioning itself as a prominent player in this niche market. Their business model encompasses several key strategies and elements:

• Strong Consumer Following: Taco John's emphasizes the importance of having a loyal consumer following. This is considered a significant advantage for potential franchise owners, as it indicates a built-in customer base and demand for the brand's offerings.

• Extensive Support for Franchise Owners: Taco John's provides comprehensive support to franchise owners to ensure their success. This support includes:Expert Training: Franchise owners receive 4-6 weeks of support from restaurant and franchise experts to familiarize themselves with Taco John's operations.Grand Opening Strategy: Taco John's assists franchise owners with developing and implementing a robust Grand Opening strategy to launch their new restaurants successfully.Real Estate and Construction Support: The company offers support in site selection and construction, helping franchise owners navigate these processes effectively.Marketing Support: Taco John's provides top-tier marketing support, including regional TV advertising, to drive sales and promote brand awareness.

• New Store Design: Taco John's introduced a new store design called "Taco John's Drive-Thru Olé" during the COVID-19 pandemic. This design focuses on convenience and speed, catering to the increasing demand for drive-thru options. It offers a smaller footprint, lower construction costs, and streamlined operations compared to traditional restaurant formats.

• Expansion into New Markets: Taco John's has expanded its footprint beyond its traditional markets in the Upper Midwest into new states across the U.S. The company targets both small towns and larger metropolitan areas for expansion, aiming to capture market share in underserved areas with strong demand for quality fast-food options.

• Partnerships with Multi-Unit Operators: Taco John's actively seeks partnerships with sophisticated multi-unit operators who can develop and manage multiple locations within a territory. These operators bring diverse skill sets and experience in running successful restaurant businesses, contributing to Taco John's growth and operational excellence.

Earnings for Taco John’s owners are not publicly available.

Franchise Costs

The average startup costs for a traditional freestanding Taco John's unit range from $942,000 to $1.4 million. Costs may vary depending on factors such as venue, development type, and geography. More detailed information about the initial investment, including ranges for other store footprints, can be found in Item 7 of Taco John's Franchise Disclosure Document (FDD).

To qualify for a single Taco John's unit, individuals or partnerships must have a minimum of $500,000 in documented liquid assets and a net worth of at least $1 million. For development commitments of 5 units or more, financial requirements will vary depending on the proposed size and scope of the Area Development Agreement.

The franchise fee for the first location is $25,000 and each subsequent location is $20,000.

• Jim Creel - President & CEO

• Mark Kocer - Chief Operating Officer

• Richard Bundy - Chief Financial Officer

• Barry Westrum - Chief Marketing Officer

• Michael D'Amico - Vice President for Supply Chain

• Patricia Hays - General Counsel and Secretary

• Stephanie Gooden - Vice President for Human Resources and Training

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