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Review of the Taco Johns Franchise Opp and Startup Costs

The quick service market is filled with a number of high profile Mexican-based food options. One of the franchises that stands out in this niche QSR field is Taco Johns. Featuring traditional and non-traditional menu items, including crunchy fried potato burrito and taco options, you’ll be able to provide your community with good tasting, very affordable food. If you’ve been thinking about getting into the restaurant industry, a Taco Johns franchise opportunity must just be the best place to start.

What are the startup costs of this opportunity? What investment will you likely need to make? And do you get any ongoing support from the organization? Let’s take a look below.

What Does the Initial Investment Look Like?

To get started with a Taco Johns franchise, the first step is the initial franchise fee of $25k. You don’t need QSR experience in order to get involved with this organization because Taco Johns will help teach you their version of the business, but experience in any aspect of this industry will help you during the initial application process. Any offer is a prospectus offer here until it is determined that you are fully qualified to become a franchisee.

Part of the qualification is a full financial background check. You must be able to provide evidence of a net worth minimum of $500k to be considered for this franchise opportunity. Of this, you must provide evidence that $350k of your net worth is in the form of liquid assets that can be immediately accessed if necessary. Failure to provide this evidence will result in a disqualification from the vetting process.

When everything is put together, the total initial investment can reach $1 million if there is no current real estate involved in the process. Leaseholders or those on the low end of the estimate spectrum might be able to achieve a grand opening for their location for as little as $371k. Much of this depends on the equipment you may or may not have in addition to the location you may need to lease or purchase before your opening day.

There’s also an ongoing royalty of 4% that is treated as part of the franchise fee. This gives you the rights to use Taco Johns branding, support for store design, and documentation of their best practices so you can implement their exclusive systems to achieve a maximum level of profitability. There’s also a 3.5% royalty that covers their advertising media and production funds. These royalties come out of your gross sales less local taxes that are required.

The ongoing rates are competitive with those across the QSR industry, as are the franchise fees and net worth requirements. An added advantage that franchisees can receive is that the financial minimums are tiered for multiple unit development, so you won’t necessarily have to provide evidence of a net worth minimum of $1.5 million if you want to own 3 units instead of 1.

Offers are being accepted in all US states except Hawaii, Maryland, and Rhode Island.

What Kind of Support Does Taco Johns Provide?

The support that Taco Johns provides begins right after the decision to make you a franchisee. You’ll receive help from the organization in both construction and design support so that you can give your builder a good set of site plans that have been proven to be effective. You’ll need to have the plans sealed by a local architect before submitting them, but you won’t have to pay the six figure cost for a new set of blueprints for your QSR.

You’ll also receive entry into the management training program that Taco Johns provides so that you’re prepared for the daily operation of your new restaurant. This training is mandatory and must occur before your grand opening will be allowed. Travel and lodging aren’t included and absentee ownership is not allowed. You’ll be expected to be an owner-operator and be involved in daily operations. You’ll also need to select a secondary manager to attend this training with you that occurs over the course of 4 weeks in Cheyenne, WY.

Once you complete the training successfully, you’ll receive help in preparing your restaurant for your grand opening and then receive ongoing support after you open for a brief period of time to ensure that things are running smoothly for you. Afterwards you’ll have ongoing support from regional staff, accesses to in-house business consultants, research and development, and distribution agreements that will keep your margins down.

It generally takes about 6-9 months to get your Taco Johns franchise open from the time that you sign the franchise agreement. There is no time limit for opening a franchise as in other QSR models, however, so you won’t be pressed for deadlines thanks to weather or permit issuance delays.

How Good Is This Investment?

Taco Johns is a unique franchise opportunity that has good brand recognition in the communities where they are well established. It is a different take on fast Mexican-based foods, so you’ll be able to set yourself apart from other similar options that may already be in your community. You’ll be able to provide people with larger portions, an authentic taste, and fresh preparation that is made to order.

If your community is lacking in QSR options and your testing indicated that Mexican foods would be popular if available, then this is definitely a good investment option. The investment is reasonable and the returns on the investment could bring your restaurant to full profitability within 5 years easily.

The one condition that Taco Johns has is that there are some new markets where a multi-unit requirement for franchisees is in place. Whether you’re looking for a single unit or you want the challenge of developing multiple units, this franchise has a lot of potential thanks to its combination of quality and affordability. If you want to get involved with a QSR, then this is an exciting opportunity that you should explore in a more in-depth way.

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