Today: How Glen Bell started Taco Bell with just $4,000.
Today, Taco Bell has 5,850 restaurants, employs 153,000 and serves over 36 million customers each week. But in 1962, it was just a dream in the mind of Glen Bell, a small businessman with little money.
Glen, born in 1923, had grown up poor in the San Bernardino area, 60 miles east of Los Angeles, the second of six children.
The family was so poor, that during the Great Depression, as their father struggled to find work, Glen’s mother made some of their clothing from old cloth chicken feed sacks and other pieces of material she could scrounge.
Their home in the San Bernardino Mountains was a tiny wood framed cabin barely big enough to house the family in its 20 by 20 foot all purpose room and 10 by 10 foot bedroom. At first, it had no electricity so they could not refrigerate food and they used kerosene lamps instead of electric lights. The bathroom was an outhouse.
What heat they had was from a cooking stove and in the winter, the icy, sometimes snow filled air whipped through the cabin, chilling everyone inside.
Food was often scarce. Their main staple was old bread purchased in volume for 75 cents from a nearby bakery. They often ate oatmeal and old fruits and vegetables as well.
Times were so hard, that when Glen was 14, at one point he rode the rails as millions of men did, looking for work. And in city after city, there often wasn’t any.
After graduating from high school, Glen worked on a cattle ranch and in 1943, joined the Marines during World War ll. After the War, he got married and took whatever jobs he could get. He rebuilt freight cars and later became a gas company meter reader.
But owing in part to the scarcity of food during his childhood, Glen was determined to start a fast food restaurant, and he studied the enormously successful McDonald’s operation, also located in San Bernardino, founded and run by brothers Dick and Mac McDonald. They later sold it to Ray Kroc and it became the famous global fast food chain.
Glen had a tiny hamburger stand, but now he had a wife and baby to support, and after working long hours to build the business, sold it at a small profit and looked for a job.
But the food business was in his blood and soon he had another fast food stand. But hamburgers were dominated by McDonald’s and Glen looked for something different to offer.
Tacos were largely unknown among non-Mexicans and were laborious and expensive to prepare. But Glen felt if he could develop a quickly prepared, high quality, inexpensive Taco, he could take what was then a largely non-existent mass market by storm. By trial and error, he created such a Taco and in 1951, began selling it for 19 cents.
His customers loved it, some of them calling it “Take-Ohs” and Glen’s dreams grew huge, as he dreamed of opening many more fast food restaurants to sell Tacos and other Mexican food. But he had little money and had to take on partners, which he did in multiple ventures.
Glen worked very long hours, often from mid-morning to the wee hours of the morning striving for success and while his partners loved the financial results, none shared his willingness to risk it all by opening many restaurants.
In 1962, Glen had little money to show for all his years of hard work, and in a little over a year, he would turn 40 years old. Meanwhile, some of the major restaurant chains had noticed his success with Mexican fast food and were starting to copy his menu.
Glen knew if he was ever going to succeed, it had to be now, before the marketplace seized his ideas and left him behind. So he and his wife Marty risked their $4,000 and launched Taco Bell.
But it soon became apparent their $4,000 was not enough, yet Glen refused to take-on partners. He went to various banks, all of whom saw how risky the venture was and turned him away.
However, his friends and their friends, who had seen how well his earlier ventures had done only to be stopped by partners fearful of risk, listened to him.
Glen promised them astronomical interest rates if they would loan him money. He raised $18,000 and soon opened his first Taco Bell, in Downey, California. When that one quickly caught on, this time he had enough money to speedily open more. As the profits pored in, they were reinvested in the business and were used to repay the people who had loaned him money.
Business was great, but it was still a small Southern California operation. In late 1964, 41 year old Glen looked to McDonald’s once again. They aggressively franchised and had almost 700 stores in 44 states.
Glen was willing to risk his company to attain what McDonald’s had. But to successfully franchise Taco Bell it was crucial to start with the right franchisee, the right location, the right marketing and to do everything possible to make it a success.
In early 1965, a 17 year veteran of the Los Angeles Police Department, 43 year old Kermitt Bekke [“Becky”] borrowed $5,000 from the Police Credit Union and took out a $10,000 second mortgage on his home and he became that franchisee.
The store opened in Torrance, California and with Glen’s help, it was an immediate success. The first month’s profits were nearly ten times this police officer’s monthly salary and by the end of the second month, he had recouped his franchise fee. And the money kept coming in.
Soon Taco Bell was inundated by police officers and others who wanted to buy franchises and it was on its way to becoming a national company. It had taken Glen Bell 20 years to become an overnight success but now his dreams were coming true.
Success Tip of the Week:
“People who support your vision and take risks for you should share your success,” said Glen.* “I needed money to expand my business and when lenders turned me down, I went to my friends.
“I gave them generous terms because I wanted to show them how much I appreciated their help. They understood what I was trying to achieve, and they deserved to be rewarded for taking risks on my behalf.”
*This quote was taken from Taco Titan: The Glen Bell Story (1999) by Debra Lee Baldwin. This book is an excellent in depth look with Glen and his family and business associates into his life, and how he became successful.
In the next KazanToday:
Glen sells the Taco Bell chain to PepsiCo and becomes a vastly wealthy man, then is stricken with a life threatening disease but ultimately finds some of the greatest joy in his career.