The vendor opportunity at Taco John's
Taco John's operates 368 restaurants: 361 franchised and 7 company-owned. Franchised outlets fell 1.6% year over year. Royalty runs at 5.0% of sales over a 20-year initial term for freestanding and endcap restaurants, and the 2023 FDD reports an Item 19 average of $1,213,600 in 2022 sales for the 281 freestanding traditional restaurants with drive-thru windows.
Who controls software purchasing
Officers named in the filing include President and Chief Executive Officer James J. Creel, Chief Operating Officer Mark Kocer, Chief Financial Officer Richard Bundy and Vice President for Supply Chain Michael D'Amico. The mapped operator base is small and entirely single-unit: 8 operators across 8 located units, one each in Iowa, New York, Idaho, Wisconsin and Kansas. The franchise agreement's Point of Sale, gift card and loyalty system requirements are set and changed by Taco John's at its discretion, which keeps the technology decision at headquarters.
Tech named in the FDD, and what is actually required
Each restaurant must purchase, from an approved vendor, and install the Point of Sale System Taco John's specifies — an electronic cash register, kitchen video monitors, receipt printers, a drive-thru speed-of-service timing system and a headset system — along with the computer hardware, software and internet connectivity that support it, plus the back of house information system Taco John's specifies. Restaurants must also participate in the franchisor's gift card program, offering purchases through the system Taco John's specifies (currently provided and managed by Bank of America Merchant Services, with First Data's Prepaid Implementation and Boarding Form required), and must participate in its guest loyalty program using the system it specifies. Franchisees also pay for access to The Olé! Way, Taco John's online learning management system. Taco John's may change the required Point of Sale System and other Computer System elements at its discretion, and franchisees must acquire any updated system at their own expense.
Procurement, renewals, and timing
Taco John's runs an approved-supplier list: franchisees must buy food products, beverages, paper and plastic goods, packaging and utensils only from approved distributors and suppliers, and equipment, fixtures, furnishings and signs must meet the franchisor's standards and come from approved suppliers. Some items are designated to specific suppliers, including Pepsi, Dr Pepper and DMAI. The initial term is 20 years for freestanding and endcap restaurants (10 years for Drive Thru Olè and non-traditional restaurants); successor terms run 10 years and require compliance, a remodel if Taco John's requires it, notice, a renewal fee, and signing the then-current Franchise Agreement.
How to read the Taco John's FDD
The embedded PDF viewer below holds Taco John's 2023 Franchise Disclosure Document. Item 11 sets out the Point of Sale and Computer System requirements in full; Item 8 covers the gift card and loyalty requirements and the approved-supplier rules. Talk to FranCloud for a ranked target list of quick-service brands with a franchisor-specified POS mandate.