California Tortilla
Bottom line
- Total investment $444K – $837K including a $40K franchise fee, 5.0% ongoing royalty.
- Average unit revenue of $935K/year (median $869K). Estimated payback in 5.0 years.
- Rated MODERATE with a risk score of 64/100. SBA loan default rate of 0.0% across 29 loans (below the industry average).
- System contracting at -38.7% CAGR over 3 years. Investigate whether closures are franchisor-driven (consolidation) or franchisee-driven (economics).
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 California Tortilla unit return on the cash you put in?
Unlevered ROIC · per unit
21%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 California Tortilla units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$1.5M
on $7.5M purchase
Total debt
$6.0M
SBA $3.7M + senior + seller note
Overview
About
California Tortilla franchisees operate quick-service restaurant locations specializing in customizable Mexican fare (burritos, tacos, bowls). Day-to-day operations include food prep, customer service, inventory management, staff scheduling, and local marketing to drive the $935K average annual revenue.
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 · 21 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
California Tortilla presents high risk due to catastrophic 34.5% unit decline, absence of financial performance data, false going concern status, and thin margins that may not support initial investment recovery.
Score breakdown · what drove the 64 / 100 rating
- 01MEDUnit count collapsed 34.5% YoY (27 units remaining) — severe system contraction indicating franchisee failures or brand decline
- 02MEDNo Item 19 (financial performance representations) disclosed — cannot verify if $935K avg revenue is achievable or representative
- 03HIGHGoing Concern = False suggests franchisor may lack financial stability or confidence in long-term viability
- 04MINORThin unit margins: $128.7K net income on $935K revenue (13.8% net margin) leaves minimal buffer for underperformance
- 05MINORHigh initial investment ($443.7K-$836.5K) relative to average net income ($128.7K) = 3.4-6.5 year payback before accounting for debt service
- 06HIGHNo litigation disclosed but massive unit decline suggests systemic operational or support failures not yet formalized
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
46 numbers
One-time purchase · CSV download · Validation questions included
FDD download
California Tortilla · FDD (2025) PDF