#2 on the Franchise 500: Delivery and Booze Are Boosting Taco Bell's Sales
The #2 company on our Franchise 500 list is now looking to find its next big success overseas.
When Trea Turner stole second base in the World Series this fall, it was tacos on the house for everyone in the country. As part of an annual Taco Bell promotion (the brand calls it “Steal a Base, Steal a Taco”), the freebies sent America a subtle reminder that, yes, the chain faces increasing competition in the crowded Mexican fast-food market it created, but no, you can’t beat it on value -- just try.
If America got a little pudgier that Wednesday, Taco Bell itself has continued to grow in every direction, including two notches higher on our list. Sales were up 6 percent, to $11 billion, in 2018, and as of third quarter 2019, year-to-date same-store and overall sales were up 5 and 8 percent, respectively.
Driving the growth, in part, is the company’s focus on convenience. To better serve pickup customers, Taco Bell was the first restaurant to integrate its POS system directly into the Grubhub app, which provides a geofence function that allows franchisees to hand over food within a minute of the driver’s arrival. And with more than 4,800 U.S. Taco Bells now offering delivery, the brand has inspired more than 14 million customers to register for at-home taco service. “Already, we see about double the check size for delivery orders compared to what we see in-store,” says Mike Grams, global chief operating officer.
Those healthy sales are fueling the next big Taco Bell boom. In 2018, the company added 329 franchise locations, and through its Cantina concept, it’s continuing its reverse sprawl from strip malls into cities, with upscale, urbanized, booze-pouring Taco Bells.
So what happens when the taco giant runs out of corners to put new stores on? Simple: It’ll travel abroad. As of 2018, only 7 percent of Taco Bells were international. “Earlier this year, we signed our largest master franchise agreement to date,” says Grams. “We’ve committed to opening 600 restaurants in India in the next 10 years.”