When you’re hankering for something Mexican or Mexican-related, then you might head to your local Taco Bell.
Taco Bell has everything from salads to meat-stuffed burritos.
It’s rare that you’ll ever walk away from Taco Bell still feeling hungry.
However, you also tend to have to pay high prices at Taco Bell despite it being a fast-food restaurant.
You may wonder why the items at Taco Bell are so expensive.
Why Is Taco Bell So Expensive? (10 Reasons)
The average price of a menu item at Taco Bell is anywhere from $1.50 to $6.00.
Taco Bell is expensive because of its higher labor costs, its operational costs, certain stressors on food increasing food costs, and limited-time menu items.
Let’s look at these factors in more detail.
1. Higher Labor Costs
One of the reasons Taco Bell has become more expensive is that they’ve taken on more costs.
In particular, in an effort to hold onto good workers and attract new workers to join their restaurants, they’ve increased their labor wages.
Some Taco Bell locations have raised their wages significantly while others have kept close to the original amount.
Since employees are earning more, Taco Bell has had to adjust its prices to make up for those costs.
While there are different ways that a company can handle increased costs, Taco Bell chose to raise its prices.
Part of the reason labor wages have increased is because of the increase in the cost of living in certain parts of the country.
It’s becoming more expensive to buy food or even to travel to work.
As such, workers need more money or else they’re going to have to leave the area to find a more affordable place to live.
Taco Bell is expensive because the cost of labor is a bit higher in some parts of the country.
2. High Franchise Fees
Taco Bell is a franchise.
While a larger company owns Taco Bell, each restaurant is essentially owned by an independent person.
They contact Taco Bell to discuss opening up a restaurant in their area.
Representatives will take a look at the market, then either agree to open up a franchise in the area or deny the application.
As a franchise, the individual owner usually has to spend a good portion of their own money to get the store up and running.
They may need to take on business loans to do so.
The franchisee also needs to pay certain fees to the overarching company.
This gives the franchisee the right to use the company’s logo, menu, and other benefits.
The problem with franchise fees is that they can be quite high.
In some restaurants, the fees combined with the rest of the operational costs may even be so high that the owner doesn’t make much of a profit.
If Taco Bell notices that certain franchises are struggling to pay their fees, then it will allow franchises in certain areas to make their prices higher than others.
Taco Bell relies on the fees from the franchises to earn a profit.
Taco Bell is expensive because of the high franchise fees.
3. Limited-Time Menu Items
Like many other restaurants, there are times when Taco Bell will debut a new menu item for a limited time.
It may be a new special taco that they’re testing.
It may be a special partnership with another company.
Whatever the item might be, it’s typically a limited release.
The item is only available for a short period before it’s gone forever.
You’ll often notice that these items tend to be more expensive than some of the other items that Taco Bell sells.
That’s because the fact that it’s limited means that it’s also scarce.
Even if the cooks are able to produce as much of that item as they can through the day, eventually, that item is no longer going to be available.
Since it will be scarce, Taco Bell can get away with putting a higher price on it.
The demand for the item is usually high, too.
Everyone who likes Taco Bell is likely going to want to try the limited item.
Since demand is high, that also makes the price high.
Taco Bell is expensive when you’re ordering a limited-edition menu item.
4. Expensive Rental Areas
Another big problem that makes Taco Bell expensive is high rental costs.
Some Taco Bell restaurants are more expensive than others because of where they’re located.
For example, Taco Bell restaurants that are in big cities tend to be more expensive than Taco Bell restaurants that are out in suburban or rural areas.
One reason city-based Taco Bell restaurants are more expensive is that there’s limited retail space.
Since there isn’t much room to build new shops and restaurants, landlords charge high rental fees for each space.
A Taco Bell restaurant that has a prime location in the city is going to have high rental costs.
To cover those costs, they need to have high prices.
Another factor is whether the city is a big tourist attraction or not.
Taco Bell restaurants in New York City might be more expensive than restaurants in cities in the middle of nowhere, for example.
That’s because tourist locations are normally crowded, so there will be a lot of people visiting that Taco Bell.
Since the demand is higher for their products, they have high prices.
Taco Bell is expensive when it’s in an area that charges high rent.
5. Corn Prices
One of the key ingredients that Taco Bell uses is corn.
Whether it’s corn, itself, or corn-produced products like oil, it’s become an expensive vegetable.
Part of that is due to the problems with the supply chain.
Taco Bell isn’t able to buy as much corn oil or coin as it might like.
That’s because there are a lot of problems impacting suppliers.
For one, drought is impacting a lot of cornfields.
Without enough water, corn is unable to grow.
It also means farmers are unable to plant new corn seeds for next year.
Another big factor is the cost of fertilizer.
Farmers need fertilizer to feed their crops and help them have higher yields.
Since they’re taking on higher costs to acquire fertilizer, they’re going to sell their corn at higher prices.
Taco Bell ends up incurring these higher prices.
Since they’re facing higher prices, they’re going to sell their menu items at higher prices.
It helps them offset the costs and generate revenue.
Since Taco Bell is reliant on corn and corn oil, it doesn’t have much of a choice but to pay higher prices.
Taco Bell is expensive because the cost of corn and its related products are expensive.
6. Sunflower Oil Prices
Another high cost that Taco Bell has been dealing with is sunflower oil.
Sunflower oil is a popular cooking ingredient.
The problem with it is that it’s also become quite expensive.
The disruption of the supply chain in Europe is primarily to blame.
Without a steady supply of sunflowers, and thus sunflower oil, a shortage occurs.
Since Taco Bell isn’t the only company in need of sunflower oil, the demand is typically higher than the supply.
As a result, the price of sunflower oil has increased.
This makes Taco Bell’s operations a bit more expensive.
To offset the higher costs, they sell their food at higher prices.
Drought and fertilizer costs are also to blame for the higher prices of sunflowers.
Drought isn’t something that’s easily fixed.
It also impacts the current harvest as well as the future harvest of sunflowers.
As such, these ongoing high prices might remain unchanged for some time.
To ensure it’s still able to generate a profit, Taco Bell increased its prices.
Taco Bell is expensive because of the high cost of sunflowers and sunflower oil.
7. Dorito Partnership
One of Taco Bell’s biggest claims to fame is its partnership with Doritos.
Doritos is best known for its cheesy chips that are extremely addictive.
Taco Bell has taken the beloved cheesy chip and turned it into a shell for some of its tacos.
The response was positive enough that Taco Bell has continued its partnership with Doritos.
While that’s great for Taco Bell fans, it also means that the Taco Bell corporation is a bit more expensive to run.
That sort of partnership rarely comes cheap.
As a result, Taco Bell likely has to share some of its revenue with Doritos.
Since they’re not getting the total profits from the partnership, they have to make more money on the food products to generate the income they want to see from it.
That allows them to pay Doritos’ share of the revenue while still making enough to make a profit for themselves.
Doritos isn’t the only company that Taco Bell has partnered with in the past.
They like to experiment with different flavors and menu items from time to time by bringing in other partnerships.
Those partnerships cost them a bit of money, so the products that come from those partnerships tend to be a bit more expensive.
Taco Bell is expensive because of its different partnerships with other companies like Doritos.
8. Value Menu Costs
Not unlike McDonald’s, Taco Bell also has its own value menu.
Its value menu features extremely cheap food that you can order for a few dollars.
While this is great for customers, it means that Taco Bell may be taking a loss or at least making less money from those orders.
While these deals help bring customers into their restaurants, they likely don’t generate that much money.
As such, Taco Bell has to earn its money through the other more expensive menu items.
Since they need to cover the costs of a discounted menu, they need to have higher prices on other food.
Taco Bell is expensive because they have to make up for the low prices of their value menu food by pricing regular menu items higher.
9. Rewards Program Costs
The value menu isn’t the only way that customers can save a lot of money.
Taco Bell also has a rewards program.
After making a certain number of purchases or hitting a certain dollar amount, you’re able to redeem certain rewards.
Most of those rewards result in free food.
This is costly for Taco Bell because they aren’t earning money on the food they give away.
To run a rewards program without bleeding money, Taco Bell must ensure the rest of its menu is expensive enough to cover the costs.
Taco Bell is expensive because of the costs of its rewards program.
10. Sustainable Meat And Eggs
A final reason Taco Bell is expensive is that it procures its meat and eggs from sustainable sources.
In an effort to source its meat from more humane suppliers, Taco Bell has started to do business with farmers who don’t use antibiotics or other questionable chemicals on their livestock.
While this means Taco Bell customers can enjoy cleaner food, it also means Taco Bell’s costs are higher.
Sustainable meat and eggs are more expensive since it usually entails raising livestock with higher costs.
To offset those costs, Taco Bell has high prices.
Taco Bell is expensive because of the costs associated with sourcing sustainable meat and eggs.