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A History of Taco Bell

In 1962, Glen Bell opened the doors to the first Taco Bell in Downey, CA. In

1964, the first Taco Bell franchise was purchased by Kermit Becky, a former member of

the LAPD. (Tacobell.com) The Taco Bell chain became a publicly traded company in

1969 and has continued to expand.

In 1978, three years after Bell’s resignation as Chairman of the Board, PepsiCo

showed tremendous interest in buying the Taco Bell Franchises. “The deal was some six

months in the making and ended with Glen Bell as a major PepsiCo shareholder and

millions richer”. (Tacobell.com) In 1988, Taco Bell started its value menu initiative

which was an industry first and offered three tier pricing on its menus making Taco Bell

an affordable alternative to other fast food restaurants. In 1997, Tricon Global

Restaurants buys the Taco Bell franchise from PepsiCo and later that year “Taco Bell

introduced its new multi-spot advertising campaign featuring the popular talking

Chihuahua, and TacoBell.com was born”.(tacobell.com)

Today taco bell has a vast franchise network with over 5800 restaurants in the U.S

of which 80% are owned and operated by individual franchises. With over 1.8 billion in

revenue in 2005 and over 175,000 employees Taco Bell has come a long way since its

inception in 1962.

Crisis I: E-coli outbreak. November- December 2006.

In late November of 2006, E. coli was discovered in the green onions at Taco Bell

establishments in New Jersey. Shortly after, more E. coli bacteria were discovered in

locations in New York, Pennsylvania, and Delaware. It was confirmed that more than 65
people were infected. The outbreak was described as the largest E. coli outbreak in the

Northeast in numerous years. (Johnson, Alex, et al.)

Due to the gravity of the issue, strict precautions were put in place. Numerous

Taco Bell locations were closed in New Jersey, New York, Pennsylvania, and Delaware.

In early December 2006, state and federal officials went to McClane Food Services in

Southern New Jersey, which is the regional distribution center for Taco Bell. In addition

to the preliminary tests performed on the green onions, the New Jersey health department

tested them, as well. (NPR)

While the outbreak was great, the intensity of the illness from the bacteria varied.

In New Jersey, two individuals were in critical condition with hemolytic uremic

syndrome, which can permanently harm the kidneys. Other victims were hospitalized and

later realized, while others did not become sick but were infected when tested. (Serrano)

By mid-December 2006, the Centers for Disease Control (CDC) stated that the E.

coli outbreak was over. Taco Bell then released a statement stating that the contaminated

food had been discarded and the affected establishments were “re-sanitized”. (Taco Bell

Corp.)

Fast food, poor PR, & consequences: “Taco Bell le duéle en la

cartera.”

The worst aspect of Taco Bell’s public relations strategy was their delay to

address the issue. According to their first press release, the outbreak began November

29th. Their first press release addressing the problem was dated December 4th (Taco Bell

Corp.). It took Taco Bell five days to address the issue. Had they addressed the problem
immediately, Taco Bell could have prevented more customers from being ill from E-Coli

and prevented more lawsuits.

Taco Bell president, Greg Creed finally addressed the situation December 14th in a

commercial video addressed to the public after the situation was declared “over” by the

CDC. (This video can be seen by going to our company> latest news> December 14,

2006. The video will be in the right hand corner as well as a company letter from Greg

Creed.) Taco Bell restating the tragedy after it has happened makes the situation worse by

allowing the public to remember the incident longer.

Greg Creed as a speaker did not deliver the message in an ideal method.

Immediately upon speaking one can tell that the president has an accent from a different

country. American audiences must have someone that they can relate to. By using a

representative from a different country, Taco Bell distanced themselves from their

audience. This leaves the audience to ponder: As a foreigner, does the president even eat

Taco Bell products?

During the commercial, Creed’s displays a lack of facial expression. This shows

that the commercial was rehearsed but not genuine. In a time of crisis, the public needs a

company figure that they can relate to. Taco Bell would have done better to use the

northeast regional manager or a more charismatic figure to speak. Taco Bell also needed

to address the issue as soon and as frequently as possible. Taco Bell was invited to

participate on MSNBC to discuss the tragedy and declined the offer on December 5th.

MSNBC would have offered Taco Bell an immediate free nationwide opportunity to

reassure their customers in a truthful objective manner.


Taco Bell’s negligence cost them big: twenty million dollars to be exact. Most of

it was found in lost sales. During this crisis, YUM! stocks had dropped 6 points on the

NYSE and had incurred several lawsuits as a direct result of this tragedy (MSNBC). Prior

planning prevents poor performance and keeps the profits in your pockets Taco Bell.

Crisis II: Rats found in NYC store. February 2007

A little over a year later, Taco Bell is then hit with a second crisis involving a rat

infestation in a Taco Bell restaurant in Greenwich Village, New York City. The

infestation was first noticed in early February, 2007. A video, recorded by a customer and

given to the media, was released showing the Taco Bell/ KFC restaurant completely

infested with rats. According to a video clip from Fox 5 News, there was “Evidence of

rats in the food areas,” at this restaurant. The clip continues, “One employee says that

workers don’t wear gloves and that rats come into contact with food on a regular basis.”

(Rats).

After the health department saw this video clip on television, the restaurant was

closed indefinitely and health officials had to have meetings with the managers of the

restaurant. This was also not the first time that this restaurant had health department

violations. However, according to QSR magazine, this restaurant passed health inspection

the Thursday before the crisis broke out.

After sanitizing the store and getting a clean bill of health, owner of the Taco Bell

franchise, YUM Brands issued a statement, “We want to assure our customers that

nothing is more important to us than food safety and their health” (Minnick). However,

brand experts think that it is going to be very difficult for Taco Bell to regain its
reputation after two crises right in a row.

Crisis II “Resolution:” Strike two, shame on you!

No crisis is a small crisis. What happened in Greenwich Village over a short span

before the company could even release a statement addressing the issue, the video of rats

on the floor of the Taco Bell had already crossed through the internet and other news

stations were reporting on this event as well.

According to Ad Age reports 1,000 blogs had cited or spread the story and

footage of the rats in the restaurant the day after the incident occurred. A search on

Google News for “rats and Taco Bell” yielded 600 stories posted on websites all over.

Yum Brands eventually caught on, despite the fact that they were a little late in

responding to the rat crisis, it’s good to see that marketers are finally starting to

understand the role of search in the distribution of information online.

Yum saw the crisis as local which was a huge miscalculation ‘There’s nothing

more viral on the negative side than rate”, said Pete Blackshaw, chief marketing officer,

Nielsen Buzzmetrics. “IN the world of fast food, hygiene is the number 1 driver, and rats

take it to the food hygiene on steroids level. Rats are Defcon 5.”

A response that someone put in an article is that when the rat infestation happened

and Taco Bell finally put out their press release saying “there is no immediate threat” to

consumers. What the reviewer took this to mean, was that the company seems to be more

interested in reopening its restaurants quickly rather than taking time to make sure that

every taco Bell in the country has been sanitized by employees and then inspected by

health officials. With the PR response to this the viewer stated “actions speak louder than

words. Yum is putting out a message that profits come before people’s safety by rushing
to reopen stores
Works Cited

Hershberg, Peter. “Taco Bell, Connoisseurs of Damage Control.” Reprise Media. N.p., 1

Mar. 2007. Web. 5 Nov. 2009.

<http://www.searchviews.com/‌index.php/‌archives/‌2007/‌03/‌taco-bell-

connoisseurs-of-damage-control.php>.

Johnson, Alex, et al. “Taco Bell Acts after E. Coli Outbreak.” MSNBC.com.

MSNBC.com, 6 Dec. 2006. Web. 7 Nov. 2009.

<http://www.msnbc.msn.com/‌id/‌16035176/>.

Macarthur, Kate. “Taco Hell: Rodent Video Signals New Era in PR Crises.” Advertizing

Age. N.p., 26 Feb. 2007. Web. 6 Nov. 2009. <http://adage.com/‌article?

article_id=115184>.

Minnick, Fred. "Taco Bell Franchises Can't Discuss Rat Problem." QRS Magazine.com.

NPR. “E. Coli Forces Taco Bell to Pull Green Onions.” NPR.org. NPR, 6 Dec.

2006. Web. 7 Nov. 2009.

<http://www.npr.org/‌templates/‌story/‌story.php?storyId=6588685>.

“On the Money.” CNBC On the Money. MSNBC. MSNBC, n.p., Dec. 2006.

Television.

<http://www.msnbc.msn.com/id/21134540/vp/16169419#16169419>

QRS Magazine, 26 Feb. 2007. Web. 4 Nov. 2009. <www.qrsmagazine.com>.

"Rats Take Over KFC/Taco Bell." Youtube.com. Fox 5 News, 23 Feb. 2007. Web. 4 Nov.
2009. <www.youtube.com>.

Serrano, Alfonso. “E. Coli Outbreak Linked to Taco Bell.” CBSNews.com. CBS

News, 4 Dec. 2006. Web. 7 Nov. 2009.

<http://www.cbsnews.com/‌stories/‌2006/‌12/‌04/‌health/‌main2227678.sht

ml>.

Taco Bell. A Message from Greg Creed. http://www.tacobell.com. N.p., n.d.

Web. 7 Nov. 2009. <http://www.tacobell.com>

Taco Bell Corp. “Our Company: Latest News.” TacoBell.com. Taco Bell

Corp., 2009. Web. 7 Nov. 2009. <http://www.tacobell.com/>.