Did you know that the Mexican restaurant industry in the United States is valued at more than $66 billion annually with more growth projected over the next 5 years? This on-going growth trajectory makes Mexican quick-serve restaurants and appealing concept. And who doesn’t love tacos, burritos, and quesadillas.
If you’re looking to franchise a Mexican food chain, it’s time to turn your attention to Taco Bueno. For more than 50 years, Taco Bueno has been in business bringing authentic recipes to the masses. Their menu covers classic Mexican favorites like hard and soft-shell tacos and boast a loyal customer base nurtured over the past half century.
How much does it cost to open Taco Bueno? Expect a total investment between $639,000 to $1,593,000 and the franchise fee of $35,000.To start franchising this Mexican food chain, you’ll need a liquid capital of $450,000 and a net worth of $1,500,000. This startup investment is similar to other QSR Mexican franchise concepts like Taco John’s that requires a minimum net-worth of $1 million.
Are you ready to dive into the detailed finances of Taco Bueno (including a recent bankruptcy)? Explore my franchise guide to view the chain’s revenue numbers, advantages, and challenges. Take our 7-minute franchise quiz to be matched with an opportunity that matches your skillset, interests, and financial criteria.
- Financial Requirements and Fees
- Average Sales / Revenue per Year
- Taco Bueno Franchise Facts
- How Much Does Taco Bueno Make in Profit?
- Advantages of a Taco Bueno Franchise
- Challenges of a Taco Bueno Franchise
- Is the Taco Bueno Franchise Right For You?
Financial Requirements and Fees
These are the financial requirements that Taco Bueno requires from applicants:
|Fees / Expenses||Financial Amount|
|Total Investment||$639,000 to $1,593,000|
In addition to these fees, expect royalty fees and ad royalty fees of 5%. The term of agreement to run a Taco Bueno franchise unit is 20 years. This is twice as long as the standard franchise agreement that lasts 10 years. Make sure you’re ready to operate a Taco Bueno for the longterm before signing a franchise agreement.
Before franchising with them, I also recommend discussing the terms and other fees with a Taco Bueno representative. Ask for their updated Financial Disclosure Document (FDD) as well to get the latest revenue and profitability numbers. To start, you can complete the form here and wait for a response.
Average Sales / Revenue per Year
According to Restaurant Business Online, Taco Bueno’s revenue for the year 2020 was $142 million. Their revenue is down by -19% from their 2019 sales of $178 million. This is not a good sign, but some of the declining sales can be attributed to government lockdowns associated with the health crisis.
It must also be noted that Taco Bueno filed for Chapter 11 bankruptcy in 2018. They emerged from their financial restructuring in 2019 after an agreement with an affiliate of Sun Holdings, Inc., Taco Supremo, LLC.
There are many food companies that have successfully emerged from bankruptcy stronger and better than ever. With that being said, a company that’s growing and generating a strong revenue is not one that’s going to file for a bankruptcy. It’s clear that in the years leading up to 2018, many units were not operating profitably. A recent bankruptcy is something to look into and better understand.
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Here’s what makes this re-emergence from bankruptcy different in my opinion. The holding company that bought out Taco Bueno was a multi-concept franchisee Sun Holdings based out of Dallas that has more than 800 franchise locations. Their portfolio includes concepts like Popeyes, Arby’s, Golden Corral, and Krispy Kreme. This is clearly a company that understands how to turnaround a restaurant. As a result of this development, I think Taco Bueno is worth another look after emerging from bankruptcy.
Taco Bueno Franchise Facts
|Incorporated Name||Taco Bueno|
|Industry||Quick Service Restaurant|
|Subsector||Food and Beverage|
Taco Bueno was started in 1967 by Bill Waugh in Abilene, Texas. Together with his brother Tom, they started selling authentic Mexican food at their original location in 2549 S. First St.
Fast forward 50 years later, Taco Bueno has grown to over 142 restaurants in the United States. Their menu includes tacos (with options including using crunchy tortilla shells, soft taco, and pita bread), burritos, quesadillas, nachos, salads, and churros. They also offer platters to cater to customers looking for a hearty and heavy meal. And with the emergence of technology, Taco Bueno has made online ordering available for customers.
The Tex-Mex chain is quite popular and has made a name for themselves through the years. Taco Bueno is known in 2016 as America’s Favorite Mexican QSR Restaurant in one award beating Chipotle and Taco Bell. They’ve even been recognized as the best Mexican fast food chain in America by the Business Insider. People’s magazine also dubbed them as the best Mexican restaurant in the country. These sorts of accolades aren’t easy to come by.
As mentioned above, Taco Bueno filed for Chapter 11 Bankruptcy in 2018. This allows Taco Bueno to stay in business while they also reorganize their affairs, assets, and debts. Sun Holdings Inc. currently owns Taco Bueno and manages them.
Taco Bueno is currently open for franchising. Once you’ve submitted your inquiry and it has been reviewed by the company, they’ll set up a meeting with you to discuss your interests and goals along with reviewing an updated Franchise Disclosure Document.
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The next step is signing a more formal application along with setting up an agreement on a development schedule and territory. The franchise committee will review your application and, if approved, will start executing franchise and development agreements. The road to setting up your Taco Bueno unit involves finding a real estate location, construction, and operations support. The estimated length of time to get a Taco Bueno up and running is 8 to 12 months.
Taco Bueno also has a few criteria when it comes to getting accepted as a franchisee. These are the following qualifications the company is looking for as stated on their website:
- Restaurant operating experience (Multi-unit experience is a plus).
- Desire to be hands-on and actively involved.
- Business management experience.
- Strong work ethic.
- Enthusiasm for food and serving customers.
- Adherence to systems, standards and specifications.
- Capital to build to desired scale (20% equity required).
Support is also available when you franchise Taco Bueno. They have a team of restaurant developers and operators that will help you through the process of running a Taco Bueno unit. From finding a location to launching the business, along with the right staff and teaching you all about operations, Taco Bueno will be with you all the way. They also have a marketing team that will assist you in getting your store well-known in your community.
Currently, the CEO for Taco Bueno is Omar Janjua. His experience includes being a CEO for The Krystal Company and being COO for Sonic. Taco Bueno’s corporate office headquarters is located at Farmers Branch, Texas.
How Much Does Taco Bueno Make in Profit?
As of this writing, there is no known official information regarding Taco Bueno’s profits. After all, the company recently emerged from bankruptcy and we don’t have much to go on in regards to current performance and profit. Since they are a privately-held company, the company is not required to release their financial information to the public.
Advantages of a Taco Bueno Franchise
There are many advantages when you franchise Taco Bueno in your area. The following are some to look forward to:
Taco Bueno has been in the quick service restaurant business of selling Tex-Mex food for more than 50 years. With this experience, you can trust they have a timeless menu that customers crave. They may have had to file Chapter 11 Bankruptcy but that hasn’t put them out of business just yet thanks to the saving of an experienced franchise company. In fact, they recently opened a new location in Pasadena. This demonstrates the company could be returning to growth.
Taco Bueno has a simple menu that makes it easy for customers to choose what they want. There are a variety of classics like tacos, burritos, and quesadillas. yet the menu does not look overwhelming. You can also get salads if you’re looking for a low-carb option and a value menu for affordable eats.
We are still living through this pandemic and it has changed the way everyone is eating out. It’s good to know that Taco Bueno is prepared for the new normal. Customers can order online and pick up their orders or have them delivered. Their locations also have drive-thru options although it’s best to call ahead to ask before ordering.
Challenges of a Taco Bueno Franchise
As with all other businesses, running Taco Bueno can also bring about challenges. Here are some you can expect so they don’t manage to catch you off guard:
Payment Card Incident
Taco Bueno has reported a data breach from payment cards last March 2018 to November 2018. Though an end-to-end encryption made it possible to protect some POS systems, the malware deployed by the hacker might have gathered some data from cards used such as name, number, expiration date, and verification codes from other locations.
Such an incident can scare off some customers and can affect Taco Bueno’s credibility. And though this may have happened years ago, it can be brought up from time to time and can damage the chain’s reputation.
As mentioned above, Taco Bueno’s sales have been declining. From $178 million in 2019, they were able to generate $142 million in 2020. The pandemic no doubt played a role in declining sales for this year. Fortunately, the company has returned to growth by the end of 2021, bringing in a reported $187 million in sales. This is a company that could see a long and successful life post bankruptcy.
If you do decide to franchise with them, it’s best to have a lawyer look through the terms in the contract as well as consult with a financial advisor. This will help you understand more about the business and where it is heading.
No Global Presence
Despite being in the business for more than 50 years, Taco Bueno is only found in the United States of America. A Tex-Mex chain that boasts of authentic recipes may have potential in other countries. But unfortunately, there seems to be no news of plans to expand worldwide. Fortunately, there’s still plenty of room for this chain to growth domestically over the next 5 years.
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Taco Bueno has mixed reviews when it comes to their food. A quick check on the food review website Yelp can give you a result of Taco Bueno having only 3.5 stars with complaints about bad and slow service as well as unappetizing food. This sort of feedback is not uncommon for a quick-serve restaurant chain. You’d be hard pressed to find a four-star rated Taco Bell on review websites either.
Though they also have positive reviews, it’s best to always keep an eye on the staff as well as ensure that they have sufficient training when it comes to handling your Taco Bueno location. The management team and employees will play a major role in how your brand is viewed locally.
Is the Taco Bueno Franchise Right For You?
Taco Bueno could be the franchise for you if you’re willing to take some risks especially at a time where they’re just moving on from bankruptcy. As more news comes out about the company opening more locations and increasing revenues, means the company could be on a longterm upswing.
But since the company is privately held, there isn’t a lot of publicly available official financial information to understand current performance. So it’s best to talk to a financial adviser and a Taco Bueno representative to understand the most up-to-date financial performance.
What is an alternative Taco Bueno franchise?
One Tex-Mex food chain you can franchise aside from Taco Bueno is Taco Bell. They’ve been around since the 1940s and have more than 7,000 locations worldwide. The total investment to expect when franchising Taco Bell is $1.2 million to $2.6 million. Read more about how to franchise Taco Bell on our guide here.
And there you have it! With Taco Bueno, you have the opportunity to introduce a classic Mexican food chain to your community and be part of a resurgence of this longstanding taco chain.