Taco Bell is having a “go big or go home” moment -- announcing this year that it plans to expand from 6,500 to 9,000 restaurants globally, and to reach $15 billion in sales by 2022. The focus is on adding restaurants in Brazil, Canada, China and India, but it will also press harder in pedestrian-heavy urban markets in the U.S. with its new Cantina-style restaurants. (That’s basically Taco Bell, but with booze on the menu as well -- including, of course, spiked slushies.)
This heavy push, and the enthusiasm it has attracted from customers and franchisees, has launched America’s favorite Mexican joint back into our top 10 for the first time since 2003. But to CEO Brian Niccol, these ambitious goals are merely an extension of the fast-moving attitude Taco Bell has been pushing for years. “As the restaurant continues to add menu items like the Naked Chicken Chalupas and Power Bowls, franchisees have embraced that what’s successful in the past won’t necessarily be so in the future,” Niccol says. “They are very passionate about learning, new ideas and connecting with youth.”
Those creative menu items aren’t just for jokes or PR, either. They drive big-time sales. In 2012, when the company adopted its “Live más” tagline and launched the Doritos Locos Taco, its average sales per unit were $1.3 million. Many a wacky-food creation later, including this year’s fried-egg-for-a-taco-shell Naked Egg Taco, that number is more like $1.6 million -- with 10 percent of stores surpassing $2 million. In 2016, even though it is the smallest of the Yum! Brands stores, Taco Bell was the most profitable among them -- with a GAAP operating margin of 11 percent, compared with 7 percent for Pizza Hut and 5 percent for KFC.
The brand also stays au courant with profitable collaborations in music, sports and fashion (including a cheeky clothing line with Forever 21 that includes shirts that say things like fire! don’t wait up and too much sauce). And it has increased its focus on food quality, which has played well in the media; the site Food Beast, for example, ran a story headlined “Taco Bell Has Low Key Become One of America’s Healthiest Fast Food Chains.” All of this gives Taco Bell many paths forward, and many ways to excite new franchisees around the world. “It’s important for a brand to stay multidimensional,” Niccol says, “and we’ve done it in a way that stays true to the brand.”
For more on franchises, check out 2018's Franchise 500 list.