This Fast Food Taco Chain Went Bankrupt Trying To Take Down Taco Bell

Everyone loves a David and Goliath story, especially when the David character — the little guy — ends up coming out on top against the giant — the powerful Goliath. Who doesn't want victory for the underdog? It's a great story, but it's not always the realistic outcome, and sometimes the Goliath is just too darn strong. In the case of two fast-food taco chains, Del Taco (David) tried its best to overtake its rival, Taco Bell (Goliath), but to no avail.

The two taco restaurants began around the same time in the 1960s, with Del Taco opening just two years after Taco Bell. Del Taco has always seen Taco Bell as its rival, while today, Taco Bell's competitors are really the other fast-food giants like McDonald's, Wendy's and Burger King. In the early 1990s the smaller company was led by Kevin Moriarty, who wanted to emulate the success of Taco Bell. However, Del Taco's plans for mass expansion sadly didn't quite work out.

After being open for almost 30 years, Del Taco filed for bankruptcy in 1993, after an "onerous debt load" taken on in a buyout was simply too much, according to Greg Johnson of the Los Angeles Times. While Del Taco claimed to be a profitable company despite having nearly $100 million worth of debt, it wasn't enough to go head to head with Taco Bell, which as a subsidiary of Pepsico, controlled 70% of the Mexican-style fast-food market at the time. When Del Taco filed for bankruptcy, they had plans to expand the chain to 500 restaurants by 1995. Meanwhile, Taco Bell had 3,700 locations in 49 states and 15 foreign countries, with no signs of slowing down. The bankruptcy protection didn't completely put Del Taco out of business, but it did slow down its expansion plans significantly.

Like the Chumbawumba song goes, Del Taco may have gotten knocked down, but they got up again, and not even Taco Bell was going to keep them down. When Del Taco first opened its doors in 1964 in Yermo, California, they were off to a roaring start with a menu of inexpensive tacos, tostadas, fries, and cheeseburgers. The number of restaurants grew in the 1970s to 100, and in 1988, Del Taco joined forces with Naugles restaurant chain, which came with more locations around the country and the ability to keep its doors open 24/7, a major perk that many of the Del Taco locations still practice. The 90s brought a new logo design and an overall makeover to the brand's image, and by continuing to expand and make improvements to the menu, like adding a $2 value menu, Del Taco has acquired a loyal and loving fan base.

Despite the setback in 1993, Del Taco is still a thriving business, with 587 locations currently around the United States. The taco chain is proud of its use of fresh ingredients and reasonable prices. While it doesn't even come close to the success of Taco Bell, which currently has 8,500 locations worldwide, Del Taco's David and Goliath story is ultimately one of success. Did David defeat Goliath? No, but they still found a way to be in the arena nonetheless, giving Mexican-style fast-food lovers even more options to choose from and indulge in.