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Companies That Almost Weren't: Taco Bell

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The hot dogs were going fast, and tacos were an afterthought.

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"Yo quiero Miniature Golf Bell."

Can you imagine those words coming out of the Taco Bell (YUM) Chihuahua's mouth?

When the late Glen Bell left the US Marine Corps in 1946, he returned to his hometown of San Bernardino, California, with a big idea -- to open a miniature golf course.

Unfortunately, his wallet was a bit too thin to finance such an undertaking. So he opened Bell's Drive-In instead, specializing in hamburgers and hot dogs.

Bell's stand got off to a slow start, bringing in a grand total of $20 his first day. But by the end of the first year, he was averaging about $150 a day. He sold the stand a few years later to open a new and improved version of his fast-food eatery.

By sheer coincidence, as Bell opened his new take-out joint, two brothers named McDonald and a traveling milkshake machine salesman, Ray Kroc, happened to be opening a similar business in the same town.

McDonald's (MCD) was a success, as was Bell's Drive-In. However, Bell decided give himself a leg up against the competition and expanded his menu to include tacos. He sold them out of a side window on his hot dog stand.

A Mexican food lover, Bell knew the frustrations of ordering tacos to-go from full-service restaurants.

"If you wanted a dozen," he said, "you were in for a wait. They stuffed them first, quickly fried them and stuck them together with a toothpick. I thought they were delicious, but something had to be done about the method of preparation."

Voila -- the Taco Bell concept was born, although the Taco Bell name had yet to be born. For now, Bell called his fledgling enterprise Taco Tia.

"My plan for experimenting with tacos was to obtain a location in a Mexican neighborhood," Bell would later tell the author of Taco Titan: The Glen Bell Story (Bookworld, 1999). "That way, if tacos were successful, potential competitors would write it off to the location and assume that the idea wouldn't sell anywhere else."

Bell dove headfirst into the world of tacos. The first hurdle to overcome was making the shells. They had to be prepared quickly -- fried first and stuffed later. Bell had seen a rudimentary version of a stainless steel deep-fat fry basket for tortillas and decided to try to improve upon it.

"It was very experimental, but I went ahead and had someone make one for me. We hadn't thought about using wire yet, so we came up with a heavy stainless version which stayed very hot and fried one at a time," he said.

Bell tinkered with his recipe until his tacos were as close to perfect as he could get.

In short order, he developed a recipe for his own taco sauce. He also figured out how to make taco shells that could be quickly fried and stuffed with fillings.

The price per taco? $0.19.

"I'll never forget the first taco customer because naturally, I was really concerned about his reaction," Bell recounted. "He was dressed in a suit, and as he bit into the taco the juice ran down his sleeve and dripped on his tie. I thought, 'We've lost this one,' but he came back, amazingly enough, and said, 'That was good, I'll take another one!' "

In 1956, Bell was ready to expand, but a recessionary economic climate had hit and Glen was stretched financially. Enter the Los Angeles Rams.

As Bell explained, "The LA Rams trained in Redlands where we had a Taco Tia. They liked the food. They'd order a dozen tacos and stand out at the counter and eat them. We really became kind of a hangout for them, and as it turned out, my very first franchise was the Taco Tia two of them bought in Los Angeles. They were football heroes, and their enthusiasm was exciting."

The excitement led to yet another name change. Taco Tia was now El Tacos -- for a six years. Bell sold out to his partners and opened the first Taco Bell in Downey, Califonia.

Franchising came next. Kermit Becky, a former LAPD cop, bought the first one in 1964. Becky was so successful, other prospective franchisees clamored to get in.

While this was financially rewarding, Bell found himself disenchanted with being big.

"Once we got up to 100 restaurants, it changed for me," he remarked. "I hated the day when we had to start numbering the units."

In 1975, Glen tendered his resignation. Three years later, the business was sold for $130 million to PepsiCo (PEP), which spun it off in 1997.

So, the next time you're inhaling a gordita, consider yourself lucky -- if things had gone slightly differently for Glen Bell, you could be eating a golf club.

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