Taco John’s Franchise: Average Sales ($1.21M) vs. Cost ($1.31M-$1.99M)

In this exclusive Franchise Chatter FDD Talk post, you’ll learn the following:

Section I – Estimated initial investment (franchise costs) for a Taco John’s franchise, based on Item 7 of the company’s 2023 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for a Taco John’s franchise, based on Items 5 and 6 of the company’s 2023 FDD

Section III – Number of franchised and company-owned Taco John’s outlets at the start of the year and the end of the year for 2020, 2021, and 2022, based on Item 20 of the company’s 2023 FDD

Section IV – News updates on the Taco John’s franchise opportunity

Section V – Presentation and analysis of Taco John’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2023 FDD, including information on the:

• 2022 average, median, high, and low sales, by quartile, for the 281 franchised freestanding traditional Taco John’s Restaurants with drive-thru windows that reported sales to Taco John’s through its approved Point of Sale System for all of calendar year 2022

• 2022 average, median, high, and low sales, by quartile, for the 28 franchised endcap traditional Taco John’s Restaurants with drive-thru windows that reported sales to Taco John’s through its approved Point of Sale System for all of calendar year 2022

• 2022 average, median, high, and low sales, by quartile, for the 22 franchised Taco John’s Restaurants in convenience stores and travel plazas with drive-thru windows that reported sales to Taco John’s through its approved Point of Sale System for all of calendar year 2022

• 2022 total sales for the sole franchised Olé Taco John’s Restaurant with drive-thru windows that reported sales to Taco John’s through its approved Point of Sale System for all of calendar year 2022

Section VI – Key ratios, comparables, computations, and analyses for the Taco John’s franchise opportunity (exclusive content for Platinum subscribers)

Section I – Taco John’s Franchise Costs

• Taco John’s franchise costs (for freestanding traditional restaurants), based on Item 7 of the company’s 2023 FDD:

• Initial Franchise Fee:  $20,000 to $25,000
• Real Estate Purchase or Lease:  Varies
• Site Preparation and Completion Costs:  $250,000 to $500,000
• Construction Costs:  $650,000 to $850,000
• Operating Equipment:  $175,000 to $225,000
• Furniture, Fixtures, and Decor:  $35,000 to $55,000
• Signage and Installation:  $30,000 to $60,000
• Point of Sale System:  $20,000 to $35,000
• Digital Menu Boards:  $35,000 to $65,000
• Initial Inventory:  $15,000 to $22,000
• Grand Opening Marketing:  $8,000 to $12,000
• Pre-Opening Training (Travel and Living Expenses):  $35,000 to $45,000
• Miscellaneous Opening Costs:  $20,000 to $60,000
• Additional Funds:  $25,000 to $40,000
• Total Estimated Initial Investment (without real estate costs):  $1,318,000 to $1,994,000

Section II – Taco John’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Taco John’s initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2023 FDD:

• Initial Franchise Fee:  $10,000 to $25,000
• Royalty:  5% of Net Sales
• Advertising and Marketing Fees:  4% of Net Sales for traditional Restaurants; 2% of Net Sales for non-traditional Restaurants

Section III – Number of Franchised and Company-Owned Taco John’s Outlets

Franchised

2020

• Outlets at the Start of the Year:  376
• Outlets at the End of the Year:  378
• Net Change:  +2

2021

• Outlets at the Start of the Year:  378
• Outlets at the End of the Year:  367
• Net Change:  -11

2022

• Outlets at the Start of the Year:  367
• Outlets at the End of the Year:  361
• Net Change:  -6

Company-Owned

2020

• Outlets at the Start of the Year:  11
• Outlets at the End of the Year:  11
• Net Change:  0

2021

• Outlets at the Start of the Year:  11
• Outlets at the End of the Year:  6
• Net Change:  -5

2022

• Outlets at the Start of the Year:  6
• Outlets at the End of the Year:  7
• Net Change:  +1

Section IV – News Updates on the Taco John’s Franchise

• Taco John’s Launches Into the New Year With More Momentum Than Ever

• Taco John’s Is Heading “Back to the Future” With Its Newest Store Design

• Taco John’s to Share Taco Tuesday; Issues Challenge to Competitors (and LeB***) to Support Workers, Not Lawyers

• Meritage Opens First Taco John’s Restaurant Under 50 Unit Development Agreement

• Taco John’s Cruises Into Cadillac, Michigan

• Taco John’s Ranked No. 154 on Entrepreneur’s 2023 Franchise 500 List

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Taco John’s Franchise (Item 19, 2023 FDD)

Charts of Per Franchised Restaurant Average Sales and Actual Sales

• Included in the charts below are all of the 332 franchised Taco John’s Restaurants with drive-thru windows that operated for all of calendar year 2022 and reported their sales to Taco John’s through its approved Point of Sale System (or an alternative reporting method that Taco John’s believes to be accurate and has approved) for all of calendar year 2022.

Part 1 – Average Sales of Freestanding Traditional Taco John’s Restaurants with Drive-Thru Windows During Calendar Year 2022

Top Quartile

• Number of Restaurants in Group:  71
• Average Sales:  $1,800,718
• Number and Percentage of Restaurants in the Group That Met or Exceeded the Average Sales of the Group:  30 (42.3%)
• High Performer:  $3,061,308
• Median Performer:  $1,697,299
• Low Performer:  $1,409,931

Second Quartile

• Number of Restaurants in Group:  70
• Average Sales:  $1,266,961
• Number and Percentage of Restaurants in the Group That Met or Exceeded the Average Sales of the Group:  31 (44.3%)
• High Performer:  $1,409,086
• Median Performer:  $1,259,861
• Low Performer:  $1,139,439

Third Quartile

• Number of Restaurants in Group:  70
• Average Sales:  $1,034,407
• Number and Percentage of Restaurants in the Group That Met or Exceeded the Average Sales of the Group:  36 (51.4%)
• High Performer:  $1,132,676
• Median Performer:  $1,040,430
• Low Performer:  $921,991

Lower Quartile

• Number of Restaurants in Group:  70
• Average Sales:  $743,924
• Number and Percentage of Restaurants in the Group That Met or Exceeded the Average Sales of the Group:  33 (47.1%)
• High Performer:  $921,477
• Median Performer:  $761,393
• Low Performer:  $463,926

Combined Average

• Number of Restaurants in Group:  281
• Average Sales:  $1,213,600
• Number and Percentage of Restaurants in the Group That Met or Exceeded the Average Sales of the Group:  138 (49.1%)

Part 2 – Average Sales of Endap Traditional Taco John’s Restaurants with Drive-Thru Windows During Calendar Year 2022

Top Quartile

• Number of Restaurants in Group:  7
• Average Sales:  $1,490,032
• Number and Percentage of Restaurants in the Group That Met or Exceeded the Average Sales of the Group:  3 (42.9%)
• High Performer:  $1,659,897
• Median Performer:  $1,426,001
• Low Performer:  $1,360,014

Second Quartile

• Number of Restaurants in Group:  7
• Average Sales:  $1,195,410
• Number and Percentage of Restaurants in the Group That Met or Exceeded the Average Sales of the Group:  3 (42.9%)
• High Performer:  $1,304,162
• Median Performer:  $1,168,090
• Low Performer:  $1,093,362

Third Quartile

• Number of Restaurants in Group:  7
• Average Sales:  $948,454
• Number and Percentage of Restaurants in the Group That Met or Exceeded the Average Sales of the Group:  3 (42.9%)
• High Performer:  $1,090,342
• Median Performer:  $927,439
• Low Performer:  $854,268

Lower Quartile

• Number of Restaurants in Group:  7
• Average Sales:  $671,126
• Number and Percentage of Restaurants in the Group That Met or Exceeded the Average Sales of the Group:  5 (71.4%)
• High Performer:  $836,110
• Median Performer:  $690,323
• Low Performer:  $445,372

Combined Average

• Number of Restaurants in Group:  28
• Average Sales:  $1,037,526
• Number and Percentage of Restaurants in the Group That Met or Exceeded the Average Sales of the Group:  15 (53.6%)

Part 3 – Average Sales of Taco John’s Restaurants in Convenience Stores or Travel Plazas with Drive-Thru Windows During Calendar Year 2022

Top Quartile

• Number of Restaurants in Group:  6
• Average Sales:  $1,523,961
• Number and Percentage of Restaurants in the Group That Met or Exceeded the Average Sales of the Group:  2 (33.3%)
• High Performer:  $2,056,939
• Median Performer:  $1,543,651
• Low Performer:  $1,303,959

Second Quartile

• Number of Restaurants in Group:  6
• Average Sales:  $961,282
• Number and Percentage of Restaurants in the Group That Met or Exceeded the Average Sales of the Group:  2 (33.3%)
• High Performer:  $1,131,659
• Median Performer:  $1,234,701
• Low Performer:  $891,204

Third Quartile

• Number of Restaurants in Group:  5
• Average Sales:  $777,564
• Number and Percentage of Restaurants in the Group That Met or Exceeded the Average Sales of the Group:  1 (20.0%)
• High Performer:  $846,269
• Median Performer:  $868,546
• Low Performer:  $734,727

Lower Quartile

• Number of Restaurants in Group:  5
• Average Sales:  $519,184
• Number and Percentage of Restaurants in the Group That Met or Exceeded the Average Sales of the Group:  2 (40.0%)
• High Performer:  $686,947
• Median Performer:  $739,123
• Low Performer:  $335,925

Combined Average

• Number of Restaurants in Group:  22
• Average Sales:  $1,094,662
• Number and Percentage of Restaurants in the Group That Met or Exceeded the Average Sales of the Group:  13 (59.1%)

Part 4 – Total Sales of the Sole Drive Thru Olé Taco John’s Restaurant During Calendar Year 2022

• Total Sales of Sole Drive Thru Olé Taco John’s Restaurant:  $1,382,500

• Taco John’s had a total of 361 franchised Taco John’s Restaurants in its system as of December 31, 2022.

• Of those, 2 Restaurants do not report their sales through Taco John’s approved Point of Sale System (or an Approved Alternative System), and 14 Restaurants do not have drive-thru windows as part of their Restaurants. Because the restaurant models Taco John’s is offering under the Disclosure Document require the use of its approved Point of Sale System and are expected to have a drive-thru window, Taco John’s did not include those Restaurants in these charts.

• Further, 13 of Taco’s John’s franchised Restaurants did not operate for the full 2022 calendar year, comprised of Restaurants that opened or closed permanently during 2022, or were closed for part of the year due to remodeling. None of the outlets that closed permanently in calendar year 2022 had been open for less than 12 months.

• Taco John’s also had a total of five company-owned Taco John’s Restaurants that operated for the full 2022 calendar year that are not included in these charts.

• “Sales” means the total receipts of the Restaurant, but does not include sales tax or equivalent taxes.

• The Taco John’s Restaurants included in these charts sell substantially the same products and services as the franchised Taco John’s Restaurants offered pursuant to the Disclosure Document.

• As of the start of calendar year 2022, the Taco John’s Restaurants included in these charts had been in operation for periods ranging from one year to 54 years.

• There is a large variation in the range of sales generated by Taco John’s franchisees during calendar year 2022. During calendar year 2022, sales by the Taco John’s Restaurants reported in these charts varied from a high of $3,061,308 to a low of $335,925.

Section VI – Taco John’s Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️