Bottom line
- Total investment $558K – $1.2M including a $35K franchise fee.
- Average unit revenue of $2.4M/year (median $2.3M). Estimated payback in 1.9 years.
- Rated STRONG with a risk score of 53/100.
- Auditor disclosed a going-concern note — flagged doubt about the franchisor's ability to continue operations. Verify against the latest FDD.
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 Café Mexicali unit return on the cash you put in?
Unlevered ROIC · per unit
32%
In Yale's "attractive" band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Café Mexicali units return on equity?
Equity IRR · 5-yr
35.5%
4.57× MOIC
Year-1 DSCR
2.30×
EBITDA ÷ debt service
Equity required
$4.9M
on $14.2M purchase
Total debt
$9.3M
SBA $5.0M + senior + seller note
Overview
About
Franchisees operate quick-service Mexican restaurants focused on authentic cuisine, likely managing kitchen operations, food prep, customer service, and staff supervision. Day-to-day responsibilities include inventory management, food cost control, labor scheduling, and maintaining brand standards across menu items and customer experience.
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 · 3 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.
No SBA loan data available for this brand.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Café Mexicali presents moderate-to-cautious risk due to minimal system scale (5 units), unclear growth prospects, and a punitive royalty escalation that doubles in year two, though unit economics and absence of litigation provide some stability.
Score breakdown · what drove the 53 / 100 rating
- 01MINOROnly 5 units in system with unknown growth trajectory suggests minimal scale and potentially stagnant expansion
- 02MINORRoyalty structure doubles from 3% to 6% in week 21, creating significant cost increase that could compress margins substantially
- 03MINORLarge investment range ($558K-$1.24M) with only 5 units makes performance benchmarking difficult and suggests inconsistent unit economics
- 04HIGHNo disclosed litigation is positive, but extremely small unit count limits meaningful litigation history
- 05MINORAverage net income of $466K on $2.36M revenue (19.7% net margin) is solid but unclear if this reflects mature units, new units, or company-operated locations
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
3 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Café Mexicali · FDD (2025) PDF