Chronic Tacos
Bottom line
- Total investment $284K – $884K including a $30K franchise fee.
- Average unit revenue of $858K/year (median $781K).
- Rated MODERATE with a risk score of 63/100. SBA loan default rate of 0.0% across 18 loans (below the industry average).
- System contracting at -35.6% 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 Chronic Tacos 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 Chronic Tacos units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$1.4M
on $6.9M purchase
Total debt
$5.5M
SBA $3.4M + senior + seller note
Overview
About
Franchisees operate fast-casual taco restaurants serving customizable tacos, burritos, and related Mexican-inspired fare. Day-to-day operations include food preparation, customer service, inventory management, and local marketing while adhering to Chronic Tacos' brand standards and recipes. Franchisees manage 5-20 employees and handle P&L responsibility under a royalty-based model.
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
Chronic Tacos presents HIGH RISK due to accelerating unit decline, missing financial disclosures, and unclear profitability metrics that prevent proper due diligence on a $284K-$884K investment.
Score breakdown · what drove the 63 / 100 rating
- 01MEDUnit count declined 19.4% YoY (31 units) indicating system contraction and potential franchisee dissatisfaction
- 02MEDNet income not disclosed in Item 19 prevents ROI analysis and suggests franchisor may be hiding unfavorable profitability data
- 03MEDHigh investment range ($284K-$884K) combined with undisclosed net income creates unclear payback period and return visibility
- 04MINORRoyalty structure with $600 monthly minimum may be burdensome for underperforming locations, especially given average revenue of $858K
- 05MINOR10-year term is lengthy given system instability; difficult to exit if brand continues declining
- 06HIGHGoing Concern status is FALSE, which may indicate financial viability concerns at franchisor 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
51 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Chronic Tacos · FDD (2024) PDF