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Considering a Taco John’s Franchise? Don’t Overlook These 23 Important Franchise Fees

by Franchise Chatter on October 4, 2017

in Franchise Fees, Mexican Restaurant Franchise



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Don't Invest in a Franchise Until You Check Out This List

If you are considering a Taco John’s franchise, don’t get blindsided by these 23 important franchise fees (from the initial franchise fee, to the royalty fee, to 21 other fees found in Items 5 and 6 of Taco John’s 2017 FDD).

1.  Development Fee:  $5,000 multiplied by the number of Taco John’s Restaurants to be developed



  • Taco John’s currently charges a non-refundable development fee (“Development Fee”) of $5,000 multiplied by the number of Taco John’s Restaurants to be developed and operated by you under the Area Development Agreement (“ADA”), payable in a lump sum when you sign the ADA.
  • Five Thousand Dollars ($5,000) of the Development Fee will be applied toward the Initial Franchise Fee payable under each Franchise Agreement for your Taco John’s Restaurants executed pursuant to the ADA.

2.  Territory Reservation Agreement:  $5,000

  • Taco John’s currently charges a non-refundable development fee (“Deposit”) of $5,000, payable in full at the time you sign the Territory Reservation Agreement.
  • The Deposit will be applied toward the Initial Franchise Fee payable under the Franchise Agreement for the Taco John’s Restaurant developed pursuant to the Territory Reservation Agreement.

3.  Initial Franchise Fee:  $10,000 to $25,000

  • For a Signature T16 Taco John’s Restaurant, Taco John’s currently charges an initial franchise fee (“Initial Franchise Fee”) of $25,000 for your first Taco John’s Restaurant, payable in full when you sign the Franchise Agreement.
  • If you are an existing franchisee of Taco John’s and want to open a second or subsequent Taco John’s Restaurant, the Initial Franchise Fee for the Signature T16 Restaurant is currently $20,000, payable in full when you sign the Franchise Agreement.
  • If you sign either one of the Development Agreements with Taco John’s, the Initial Franchise Fee for each Signature T16 Taco John’s Restaurant is $20,000, payable in full when you sign each Franchise Agreement. Taco John’s will apply $5,000 of your Deposit or Development Fee to the Initial Franchise Fee due when you sign the Franchise Agreement for each Restaurant.
  • For a non-traditional Taco John’s Restaurant, Taco John’s currently charges an Initial Franchise Fee of $10,000, payable in full when you sign the Franchise Agreement. If you sign either Development Agreement with Taco John’s for one or more non-traditional Taco John’s Restaurants, Taco John’s will apply your Deposit or $5,000 of your Development Fee, whichever is applicable, to the Initial Franchise Fee due when you sign the Franchise Agreement for each Restaurant.

4.  Royalty:  5% of Net Sales

  • Due Date:  20th day of each month.

5.  Advertising and Marketing Fees:  4% of Net Sales for Signature T16 Restaurants; 2% of Net Sales for non-traditional Restaurants

  • Due Date:  20th day of each month.
  • Payable to Taco John’s, its designee, or an Advertising Cooperative that Taco John’s has approved.
  • For Signature T16 Restaurants, Taco John’s may increase this fee upon 60 days’ notice by not more than 0.5%, up to a maximum of 4.5% of the Net Sales of the Restaurant during the Initial Term of the Franchise Agreement.
  • Taco John’s will not increase this fee for non-traditional Restaurants during the Initial Term of the Franchise Agreement without your consent.

6.  Grand Opening Marketing:  approximately $5,000 to $12,000

  • Due Date:  As incurred.
  • You must conduct a grand opening advertising program that Taco John’s approves.

7.  Required Purchases:  will vary under circumstances



  • Due Date:  Upon receipt of merchandise or installation of equipment.
  • You must purchase only products to be sold from the Restaurant that Taco John’s has approved, and you must purchase only from suppliers and distributors that Taco John’s approves, which may include itself or its affiliates.

8.  Additional Training:  current published rate

  • Due Date:  As incurred.
  • Taco John’s does not charge a fee for initial training but may charge a fee for any other training programs, workshops, or seminars that it may periodically offer and for additional in-unit training requested by a Franchisee from time to time.

9.  Certified Manager Training:  Shift Supervision and Guest Service Classes online training per class or Prometric-certified food safety course – course book $25, plus shipping, exam $28.

  • Due Date:  As incurred.
  • You must maintain at least three Active Certified Mangers at your Restaurant.

10.  Insurance Cost Reimbursement:  will vary under circumstances

  • Due Date:  As incurred.
  • You are required to obtain the insurance Taco John’s requires. If you do not secure or maintain the specified coverage or give Taco John’s evidence of that coverage, it may obtain the insurance and charge you for it and any expenses it incurs.

11.  Transfer Fee:  15% of Taco John’s then-current Initial Franchise Fee

  • Due Date:  The earlier of completion of the transfer or the date that the proposed new owner (“Proposed New Owner”) begins training.
  • If the transfer is not completed for any reason, you must reimburse Taco John’s for its costs and expenses associated with your transfer (including those for investigating and processing a Proposed New Owner).

12.  Renewal Fee:  10% of Taco John’s then-current Initial Franchise Fee

  • Due Date:  Upon renewal.
  • You must pay Taco John’s a renewal fee for each renewal of your Franchise Agreement.

13.  Conceptual Floor Plan and Conceptual Site Plan:  will vary under circumstances



  • Due Date:  As incurred.
  • Taco John’s will provide one set of conceptual plans at no charge.
  • Additional layouts or revisions will be invoiced at Taco John’s then-current rate. Taco John’s current rate is $75.00 per hour to prepare additional layouts or revisions to your conceptual plans.

14.  Site Evaluation and Site Acquisition Support Services:  will vary under circumstances

  • Due Date:  As incurred.
  • You must reimburse Taco John’s for actual expenses if it assists you with site evaluation and site acquisition support if you request its assistance.

15.  Temporary Management Fee:  will vary under circumstances

  • Due Date:  As incurred.
  • If you cannot operate your Restaurant due to death or permanent disability, Taco John’s may appoint a manager and charge you a fee for the management services.

16.  Advertising Cooperative Bookkeeping Fee:  $150.00 per month

  • Due Date:  As incurred.
  • If Taco John’s provides bookkeeping services for an Advertising Cooperative, the Advertising Cooperative may be charged a monthly service fee.

17.  Gift Card Fee:  $180.00; may change annually

  • Due Date:  Annually.
  • You must participate in the Gift Card System and pay Taco John’s a fee which it will submit to the gift card processor on your behalf.

18.  Relocation Fee:  15% of Taco John’s then-current Initial Franchise Fee

  • Due Date:  As incurred.
  • If you lose the right to possess the Premises, if you request relocation of the Restaurant, or if Taco John’s determines that your current location is not suitable under its standards, you may relocate within your Protected Territory to a site which meets Taco John’s then-current criteria, and Taco John’s may charge you this fee for its time and efforts in approving your new location.

19.  Interest on Late Payments:  not more than 1.5% on amounts due per month

  • Due Date:  As incurred.
  • After the date that they are due, all payments you owe to Taco John’s or its affiliates will bear interest of up to 1.5% per month.

20.  Fee for Failure to Submit Reports:  $50.00

  • Due Date:  On the 20th of each month.
  • If reports are not submitted (after the date the P&L is due), Taco John’s may charge you the fee for not submitting reports.

21.  Remodeling Expenses:  varies

  • Due Date:  As incurred.
  • At Taco John’s request, you must remodel, reimage, expand, redecorate, re-equip, and/or refurbish the Premises and the Restaurant to reflect changes in the operations of Taco John’s Restaurants, which Taco John’s prescribes and requires of new Franchisees.
  • Taco John’s currently cannot estimate a range of these expenses.
  • Material alterations will not be required more often than once every 10 years.

22.  Independent Feedback Program Fee:  currently, none

  • Due Date:  As determined.
  • If Taco John’s establishes an independent feedback program to evaluate guest satisfaction of your Restaurant, you must participate in it and pay the fees or charges associated with it.
  • Taco John’s will give you not less than 30 days’ notice of the implementation of this program. Taco John’s has the right to review the results of the service evaluation.

23.  Indemnification:  will vary under circumstances

  • Due Date:  As incurred.
  • You must reimburse Taco John’s if it defends against or is held liable for claims that arise from your Restaurant operations unless your operations were in strict compliance with Taco John’s Operations Manual, standards, or procedures or the claims result from negligence or willful or reckless misconduct on Taco John’s part or on the part of its agents.

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