Bottom line
- Total investment $1.3M – $5.5M including a $50K franchise fee, 5.0% ongoing royalty.
- Average unit revenue of $4.8M/year (median $4.9M).
- Rated CAUTION with a risk score of 77/100. SBA loan default rate of 0.0% across 6 loans (below the industry average).
- No protected territory and the franchisor reserves the right to compete in your area. Clarify territorial boundaries before signing.
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 Queen 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 Queen units return on equity?
Equity IRR · 5-yr
23.5%
2.88× MOIC
Year-1 DSCR
3.71×
EBITDA ÷ debt service
Equity required
$28.4M
on $47.7M purchase
Total debt
$19.3M
SBA $5.0M + senior + seller note
Overview
About
Barrio Queen franchisees operate casual Mexican restaurants serving traditional regional cuisine. Day-to-day operations include food preparation, front-of-house service, inventory management, and local marketing to drive the $4.77M average unit volume.
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 · 6 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
Barrio Queen exhibits HIGH RISK characteristics: a stalled 7-unit system with regulatory violations, litigation history, going concern status, missing financial disclosures, and no territorial protection.
Score breakdown · what drove the 77 / 100 rating
- 01MINOROnly 7 units with unknown/stagnant growth trajectory suggests system contraction or failed expansion
- 02MINORMultiple regulatory violations and consent orders from Maryland, Virginia, and New York indicate systemic disclosure/compliance failures
- 03HIGHGoing concern status is FALSE — franchisor may face operational viability issues
- 04HIGHLitigation history includes FIPA violations and misrepresentation by predecessor entities, creating legal/reputational liability
- 05MINORNo net income disclosure (Item 19) prevents ROI validation despite $1.3M–$5.5M investment range
- 06MINORUnprotected territory creates direct competition risk from other Barrio Queen franchisees or franchisor's own locations
- 07MINORHigh royalty structure (5% + $10/week surcharge) on $4.77M average revenue = ~$250K annual franchisor fees with unclear profitability at unit level
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
14 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Barrio Queen · FDD (2023) PDF