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Taco Bell Reportedly Will License Hamburger Chain : Fast food: In policy turnaround, 'a select group' will get Hot 'n Now franchises, a trade publication says.

November 16, 1994|GREG JOHNSON | TIMES STAFF WRITER

IRVINE — Reversing its field, Taco Bell has decided to license some of its Hot 'n Now burger restaurants to franchisees, according to a national restaurant industry trade publication.

Nation's Restaurant News reported this week that Hot 'n Now, an Irvine-based subsidiary of Taco Bell, will license an unspecified number of restaurants to "a select group" of Hot 'n Now and Taco Bell franchisees.

Taco Bell on Tuesday would not comment on the report or the status of Hot 'n Now, a chain of double-drive-through restaurants. In the past, Taco Bell has said that growth in its mainstay Taco Bell system would be achieved by adding company-owned stores, rather than selling franchises.

Nation's Restaurant News, a weekly trade publication based in New York, quoted Taco Bell Chairman John Martin as saying that he didn't "feel comfortable having franchisees invest a lot of money in Hot 'n Now until we had it right."

In March, Taco Bell said there were more than 100 Hot 'n Now restaurants operating "as a test concept." The company described Hot 'n Now as a no-frills restaurant with a "limited value menu" that included 49-cent, 69-cent and 99-cent burgers, french fries and soft drinks.

Restaurant companies have historically used franchising to expand the size of their chains.

"You can grow faster through franchising and limit the corporate expense," said Janet Lowder, a consultant with Restaurant Management Services in Rancho Palos Verdes. "If you open restaurants through franchising, you have lots of other people opening them for you."

Pepsico Inc., Taco Bell's parent company, acquired Hot n' Now in 1990. The burger chain was founded in Kalamazoo, Mich., in 1984.

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