We are a Delaware limited liability company formed on February 23, 2016. We conduct business under the names Taco Bell and Taco Bell Express. Our principal business address is 1 Glen Bell Way, Irvine, California 92618. Our predecessor and intermediate corporate parent is Taco Bell Corp. (“TBC”), a corporation organized in the state of California in 1962. TBC also conducts business under the names Taco Bell and Taco Bell Express. TBC’s principal business address is 1 Glen Bell Way, Irvine, California 92618. TBC has been in the quick-service restaurant business for over 55 years, has operated Taco Bell Units since 1962 (when the first such Unit opened) and has operated Taco Bell Express Units since 1991 (when the first such Express Unit opened). TBC had offered and sold franchises in the United States between 1964 and the date on which the financing transaction described below was consummated, which was on May 11, 2016. On that date, we became the franchisor of Taco Bell and Taco Bell Express Units in the United States.
Our predecessor and intermediate corporate parent is Taco Bell Corp. (“TBC”), a corporation organized in the state of California in 1962. TBC also conducts business under the names Taco Bell and Taco Bell Express. TBC’s principal business address is 1 Glen Bell Way, Irvine, California 92618. TBC has been in the quick-service restaurant business for over 55 years, has operated Taco Bell Units since 1962 (when the first such Unit opened) and has operated Taco Bell Express Units since 1991 (when the first such Express Unit opened). TBC had offered and sold franchises in the United States between 1964 and the date on which the financing transaction described below was consummated, which was on May 11, 2016. On that date, we became the franchisor of Taco Bell and Taco Bell Express Units in the United States. Our other intermediate corporate parent is Taco Bell Funding, LLC, a Delaware limited liability company formed on February 23, 2016 in connection with the financing transaction described below. The principal business address of Taco Bell Funding, LLC is 1 Glen Bell Way, Irvine, California 92618. Our direct corporate parent is Taco Bell Franchisor Holdings, LLC (“TB Holder”), a Delaware limited liability company formed on March 10, 2016 in connection with the financing transaction described below. The principal address of TB Holder is 1 Glen Bell Way, Irvine, California 92618. Our ultimate corporate parent is YUM! Brands, Inc. (“YUM”). YUM’s offices are located at 1441 Gardiner Lane, Louisville, Kentucky 40213.
We grant non-exclusive rights ("licenses") to you to operate, by utilizing the Taco Bell name, trademarks, tradenames, trade secrets, logotypes, commercial symbols, service marks, and other intellectual property (the "Trademarks"), a variety of quick-service consumer feeding facilities presenting various items of inexpensively priced, quality Mexican-style food for take-out and on-premises eating by the general public. We and our affiliates operate facilities of the same kind, as well as other types of feeding facilities. You will be an independent business person and will assume all business risk associated with operating a Taco Bell facility. Traditionally, Taco Bell buildings include a kitchen facility where food is prepared and assembled, a counter where orders are placed and paid for and food is delivered, tables and seats for customers and, frequently, an automobile drive thru ("Traditional Units"). We offer franchises for Taco Bell Traditional Units in our separate disclosure document for Traditional Units. This disclosure document offers our licenses for less elaborate facilities known as Taco Bell “Express Units.” As we determine for each specific location, the Express Unit will offer either the full Taco Bell menu or a limited menu composed of items from the full menu. At some Express Units, a few items from the limited menu are prepared somewhat differently than items of the same or similar name from the full menu. The Express Units are generally known as Custom Facades, Power Pumpers, or InLines. Custom Facades include stand-alone units constructed on sites within larger buildings and permanently constructed installations of various configurations taking advantage of available space in various types of locations. Power Pumpers are Express Units with several of the above features that share a facility with a gas and convenience store and In-Lines are Express Units that also include the other above features but may or may not have a drive thru. In our discretion, certain Power Pumpers or InLines may be categorized as Traditional Units; franchises for these restaurants will be offered under our disclosure document for Traditional Units. For the purposes of this disclosure document we will describe the Express Units only, which we will occasionally refer to as the Units or Express Units. Several other versions of Taco Bell Express Units that have been and will in the future be tested, developed, and operated by us or our affiliates, are not now available to licensees.
The initial license fee is $22,500. We may modify the initial license fees for atypical locations or unusual development or operational circumstances. These initial license fees are part of the general revenues for us and are not set aside for any particular purpose. The initial license fees are due upon your execution of the License Agreement, are to be paid electronically via the MYTACOBELL website, which web site will be made available once you are approved by us as eligible to become a licensee, and are not refundable. You apply for a license for a specific location by registering the site on MYTACOBELL and paying a $10,000 non-refundable deposit towards the initial license fee. The deposit as well as other fees due to us is to be paid electronically via the MYTACOBELL website. After your receipt of notification that we have approved your location and upon ground break of the Unit, the balance of the initial license fee is due. After receipt of payment, we will prepare and send to you for your execution the License Agreement (See Exhibit B). If the initial license fee is not paid in full or the license documents are not timely signed and returned to us, we will not approve the opening of the Unit. On occasion we or an affiliate will sell to certain licensees or franchisees one or more existing restaurants including KT Units operated by us or an affiliate. Where the license is intended for an existing restaurant, the total purchase price for the restaurant may exceed $1,766,250, excluding real property costs, and will include costs for the building, equipment, signs and inventory. The purchase price for the sale of one or more existing restaurants varies and is typically based on a multiple of cash flow. If the restaurant is a KT Unit, the initial license fee will be prorated for the specific term of the License Agreement at a rate of $2,250 for each partial or full year. Additionally, if the sale includes a KT Unit or other multi-brand restaurant, the initial license or franchise fee for the other brand is not included in the purchase price and must be paid separately and you will be required to comply with the other brand’s standards and sign additional documentation. You will enter into an Asset Purchase Agreement (“APA”) with us or our affiliate in a format substantially similar to that attached as Exhibit I. The APA will define the purchase price and other expenditures and obligations you are to pay or assume to purchase the restaurants covered by the APA. You will be required to pay a deposit that will vary in amount depending on the size of the transaction but is generally 2% of the purchase price. The deposit is refundable only in certain situations as specified in the APA. You may be required to enter into a Development Agreement, in the form similar to that included in the APA as Exhibit G, for the development of one or more Units. When more than one Unit is being sold, the Units are not individually priced but are sold as a group and may or may not include purchase of the real property. During 2018, our predecessor, TBC, and/or its affiliates sold groups of Restaurants, ranging from 5 to 25 Restaurants with the sales prices ranging from $6,900,000 to $67,300,000 per group. To assist you in the design of your first Express Unit that you open, we require that you use the Design Services Program offered by Yum! Brands’ Architecture and Engineering Department. The Design Services Fee for a Custom Façade (see Item 7) ranges from $2,000 to $5,000 and for an In-Line or Power Pumper ranges from $3,500 to $5,000, plus an additional cost of $1,000 for a dining area. For this fee, you will receive an electronic Schematic Design Drawing Set that includes an equipment plan, an equipment schedule, and interior elevations. You may also need to purchase a sample board, equipment cut sheet booklet, and printed 11 x17 drawings at an approximate cost of $100 each. Additional renderings, site plan and exterior elevations are also available for purchase. The Design Services Fee is not refundable. Notes: A. All drawings are generated in AutoCAD version 2009 and translated into Adobe pdf and supplied electronically. B. All drawings are provided as design drawings, not construction documents. Additional site specific detail will need to be added to these drawings by a local architect to obtain the permits needed to begin construction.
We may attempt periodically to identify lenders willing to extend financing to you. Our assistance in identifying lenders is not an approval or endorsement by us of any of the lenders or of the financing arrangements. The terms of any such financing arrangements will be agreed upon between you and the lender and may vary widely. Provided your accounts are in good standing, we do not currently require you to execute notes, contracts, or other instruments containing waivers of defenses or confessions of judgment under ordinary circumstances. TBC had no past practice, and we have no present practice, of selling, assigning or discounting your obligations under the License Agreement to third parties. However, in the past, TBC sold the promissory notes of franchisees and assigned its right to receive rents under leases with franchisees to third parties. We may continue this practice, if we deem it to be in our best interest. We do not offer, directly or indirectly, any arrangements for financing your initial investment or the continuing operation of your Taco Bell business. We are unable to predict whether you will be able to obtain financing for any part of or all of your investment and, if you are able to obtain financing, we cannot predict the terms of such financing.
We do not make any representations about future financial performance or the past financial performance of any company-owned or licensed Express Units. We also do not authorize our employees or representatives to make any such representations either orally or in writing. If you are purchasing an existing Express Unit, however, we may provide you with the actual records of that Unit. If you receive any other financial performance information or projections of your future income, you should report it to our management by contacting Eric Hayden, Director, Global Franchise Counsel, at Taco Bell Franchisor, LLC 1 Glen Bell Way, Irvine, California 92618, Phone: 949-863-4500, the Federal Trade Commission, and the appropriate state regulatory agencies.