Bottom line
- Total investment $889K – $1.4M including a $40K franchise fee, 6.0% ongoing royalty.
- Average unit revenue of $2.1M/year (median $1.6M).
- Rated MODERATE with a risk score of 60/100. SBA loan default rate of 0.0% across 6 loans (below the industry average).
Item 1 · who you're contracting with
The Franchisor
Yale framework · single-unit ROIC
Returns Analysis
Pulls Item 7 (investment) and Item 19 (revenue) from this brand's FDD into the Yale unlevered-ROIC formula. Override any input to stress-test it against your own assumptions.
The model · Yale framework
What would one Barrio unit return on the cash you put in?
Unlevered ROIC · per unit
24%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Barrio units return on equity?
Equity IRR · 5-yr
31.8%
3.97× MOIC
Year-1 DSCR
2.54×
EBITDA ÷ debt service
Equity required
$7.0M
on $17.1M purchase
Total debt
$10.1M
SBA $5.0M + senior + seller note
Overview
About
Barrio franchisees operate a Latin food/beverage concept focusing on authentic cuisine and beverage service. Day-to-day operations include food preparation, inventory management, staffing, customer service, and point-of-sale management across high-volume service periods. Franchisees manage all local P&L responsibility while paying 6% royalties on gross sales to corporate.
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
Item 20 · unit dynamics
The Growth Chart
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 14 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator — not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee phone area codes (Item 20). Approximate — ported numbers may show the original state, not the franchisee's current location.
Government records
SBA Loan Data
Aggregated from SBA 7(a) loan disclosures, public data unique to FranchiseVerdict.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Early-stage, rapidly expanding food/beverage franchisor with undisclosed profitability metrics, no verified revenue data, and questionable franchisor financial health despite unit growth.
Score breakdown · what drove the 60 / 100 rating
- 01MEDNo Item 19 (Average Unit Volume) disclosed—unable to validate the $2.1M avg revenue claim independently
- 02MEDNet income not disclosed—royalty burden (6% + operating costs) could leave minimal profit despite $2.1M revenue
- 03HIGHGoing Concern status is False—suggests potential financial instability at franchisor level despite 71.4% unit growth
- 04MINORHigh total investment range ($889K–$1.36M) with modest $40K franchise fee creates significant unit-level risk if revenues don't materialize
- 05MINORRapid 71.4% YoY growth (20 units total) may indicate unsustainable expansion or selection of lower-quality franchisees; insufficient operating history
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
Item 11
Training & Operations
Item 20
Franchisee Contacts
Phone numbers extracted directly from this brand's FDD Item 20. After purchase, you'll also receive a list of validation questions tailored to this brand.
Franchisee contacts
28 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Barrio · FDD (2024) PDF