Fresca Palapa Franchise Cost, Revenue & Review 2026
Data from FDD filing
Analysis by FranchiseVerdict Research · Methodology
Fresca Palapa is a fast-casual franchise serving fresh Mexican and Latin-inspired food in a tropical setting. Franchisees run the restaurants, managing food prep, staffing, and counter service.
FranchiseVerdict summary · 2026
A Fresca Palapa franchise requires a total initial investment of $153K – $304K, including a $35K franchise fee and an ongoing 6.0% royalty[2]. Per the 2025 FDD, average unit revenue was $1.2M[2]. FranchiseVerdict grade: B (Above average), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2025 FDD issuance
Overview
- Investment
- $153K – $304K
- 13th pct Service Resta…
- Avg gross sales
- $1.2M
- n=120th pct Service Resta…
- Royalty
- 6.0%
- 46th pct Service Resta…
- Units
- 14
- 44th pct Service Resta…
- SBA charge-off
- N/A
Quick verdict · Quick-Service Restaurants · color = vs category peers
Green = favorable by >10% vs Quick-Service Restaurants avg · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- COSTTotal investment $153K – $304K including a $35K franchise fee, 6.0% ongoing royalty.
- RETURNSAverage unit revenue of $1.2M/year.
- RISKVerdict B (Above average), verdict score 56/100 (higher is better).
- FLAGRevenue data based on only 1 reporting unit. Treat as directional, not definitive. Ask franchisees directly for current unit economics.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Fresca Palapa Franchising, LLC
- CEO title
- CEO
- Maximo Cruz
- Founder active
- Yes
- Original founder still leading the business
- Incorporated in
- TX
- HQ
- 1812 Corinth Street, Ste 110, Dallas, TX 75215
- Auditor
- A. Andrew Gianiodis, CPA
- Audited financials
- Franchisor revenue
- $177K
- vs $68K prior year
Overview
About
- CEO
- Maximo Cruz
- Headquarters
- TX
- Founded
- 2022
- FDD year
- 2025
- States available
- 1
Can you afford it, and what does the money buy?
Entry cost runs 65% below the typical quick-service restaurants franchise.
Source: FDD 2025 · Items 5–7
FDD Item 7 · 2025 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $35K | $35K |
| Working capital (3–6 mo) | $30K | $50K |
| Equipment, build-out, other | $88K | $219K |
| Total initial investment | $153K | $304K |
Source: Fresca Palapa 2025 FDD, Items 5 and 7[2]. “Equipment, build-out, other” is computed as total minus disclosed line items above.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $153K – $304K
- Top 40% of category vs category
- Liquid capital req'd
- $30K – $50K
- Middle of category vs category
- Franchise fee
- $35K – $35K
- Middle of category vs category
- Royalty
- 6.0%
- percentage · typical 6–8%
- Ad fund
- 1.0%
- typical 3–5%
- Total fee load
- 7.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 6.0% of gross sales |
| Marketing / ad fund | 1.0% of gross sales |
| Technology fee | $125 |
| Training fee | $350 |
| Transfer fee | $10K |
| Renewal fee | $0 |
| Inventory (initial) | $3K – $5K |
| Total fee load | 7.0% of rev |
What do units actually make?
Average unit sales land near the quick-service restaurants norm.
Based on a single reporting unit - not a system average
Source: FDD 2025 · Item 19
Single-unit · estimated
Returns at a glance
Indicative numbers using FDD Item 7 / Item 19 inputs and category-benchmarked cost ratios. Full single-unit, 25-unit portfolio, and LBO models (with every input editable to stress-test your own scenario) live on the financials page.
Store EBITDA · annual
$182K
15.0% margin
Unlevered ROIC
68%
EBITDA / total invested capital
Payback
18 mo
cash-on-cash, unlevered
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
What one unit earns on your invested capital
Model A · Single-Unit Return
Computes unlevered return on invested capital (ROIC) for a single franchise unit. The target band for an attractive franchise is 30–60% ROIC. Below that and a passive index fund likely outperforms; above that and the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses. It's the top line only. Operating costs below are category estimates. Override them to match your real lease quote, labor market, and build-out budget.
Returns model · single-unit ROIC
What would one Fresca Palapa unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
68%
Above the 30–60% band. Verify revenue is per-unit average
What 25 units return when you use SBA financing
Model B · Return on Equity: Debt-Financed Acquisition
Models a 25-unit portfolio acquisition financed with an SBA 7(a) loan. Shows equity IRR (your return on cash invested), DSCR (how safely the cash flow covers debt service), and the capital stack (SBA + seller + equity breakdown).
This is the “search fund” or “entrepreneurship through acquisition” scenario: you buy an existing multi-unit operator, use leverage to amplify returns, and either operate or hire management. The 25-unit size is the typical minimum for an SBA-backed franchise portfolio acquisition to pencil as a full-time income.
What “return on equity” means here: if you put in $500K of your own cash and the business generates enough EBITDA to pay down debt and grow, your equity IRR is the annual return on that $500K, including the value created when you eventually sell. Target IRR for a search fund is typically 25–35%.
Levered LBO scenario · Yale Crease Capital framing
What would 25 Fresca Palapa units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$1.9M
on $9.7M purchase
Total debt
$7.8M
SBA $4.8M + senior + seller note
These models are for research and scenario planning only. Not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.
Item 19 · Source: 2025 FDD
Financial Performance
Based on a single reporting unit - not a system average
- Avg gross sales
- $1.2M
- Per unit, per year
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- gross sales with pnl
- Sample size
- 1
- vs category median 20 · small
- Reported figure
- $1.2M
- A single outlet — not a range
- Reporting year
- 2024
- Fiscal year the figures cover
- Source filing
- FDD 2025
- Disclosed in the 2025 filing, covering 2024
- Transparency
- 8 / 10
- vs category median 4 / 10 · above
Compared against 782 Quick-Service Restaurants brands
Revenue is 5.3x the investment midpoint. At typical franchise margins, this suggests a payback under 3 years.
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Unit economics
Average unit generates $1.2M/year in gross sales. Revenue-to-investment ratio: 5.3x.
Fee burden
Total ongoing fee load of 7.0% (near the Quick-Service Restaurants average).
Disclosure
Transparency score 8/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence. Sample size of 1 unit — treat as directional only.
Operator retention
Net unit growth of +50.0% over 3 years (1 opened, 0 closed).
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Quick-Service Restaurants averages
How Fresca Palapa Compares
Is the system healthy?
Source: FDD 2025 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 14
- Opened
- 1
- Last reporting year
- Closed
- 0
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 0.0%
- Company-owned
- 11
- Corporate units in the system
- % franchised
- 21%
- vs corporate-owned
- Net growth (3-yr)
- +50.0%
- Net unit change over 3 years
3-year detail · Item 20
- Opened (3yr)
- 1
- Closed (3yr)
- 0
- Terminated (3yr)
- 0
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 0
- Reacquired (3yr)
- 0
- Franchisor bought back
- Projected new
- 4
- Franchisor's next-year forecast
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 12 · 1 state reported
The Territory Map
FDD Item 12 reports the state count, but the specific list isn't in our current data. The map will appear once we re-extract from the FDD or enough franchisee contacts are available.
1
states with franchisees (per FDD Item 12)
Fast growth in a small system. Newer franchisors expanding quickly may not yet have the support infrastructure of larger systems.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
No SBA loan data available for this brand.
What could kill this investment?
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
Risk & Legal
Fresca Palapa presents a cautionary profile with concerning franchisor financial health, rapid unproven growth trajectory, and lack of transparent financial validation—requiring extensive franchisee reference calls before commitment.
Litigation (Item 3)
No litigation required to be disclosed (FDD Item 3).
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · A. Andrew Gianiodis, CPA
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Kickbacks from required suppliers: Yes
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 56 / 100 verdict
- 01HIGHGoing Concern status is False — franchisor may face financial viability issues despite healthy unit economics
- 02MINORExplosive 50% YoY unit growth may indicate unsustainable expansion or inflated recruitment claims rather than organic demand
- 03MEDNo Item 19 financial performance representations disclosed — franchisees cannot independently verify the $238,739 average net income claim
- 04MINORWide investment range ($153,200-$303,900) suggests inconsistent build-out costs or undefined territory sizes, creating unpredictable capital requirements
- 05MINOROnly 14 units system-wide limits franchisee support infrastructure and brand recognition leverage
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 7.0% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2025 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 5 years |
| Allowed renewalsℹ | 3 |
| Territory type | exclusive |
| Protected territory | Yes |
| Exclusive territoryℹ | Yes |
| Territory population | 50,000 |
| Online sales rightsℹ | Granted |
| Franchisor can compete | No |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 5 mi |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | Yes |
| Arbitration location | Dallas, Texas |
| Jury trial waiver | Yes |
| Governing law | TX |
| Litigation count | 0 |
View Item 3 litigation summary
No litigation required to be disclosed (FDD Item 3).
Items 10, 11
Training & Operations
- Classroom training
- 57 hrs
- On-the-job training
- 34 hrs
- Training location
- Dallas, TX or franchisee's location
- Ongoing training
- Optional
- Time to open
- 4 mo
- From signing to launch
- Site selection
- franchisee with franchisor approval
- Franchisor financing
- Not offered
- Item 10
- POS system
- Clover
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Clover
Item 20 · call current owners
Franchisee Contacts
3 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Fresca Palapa · FDD (2025) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Fresca Palapa franchise?
The total investment to open a Fresca Palapa franchise ranges from $153K – $304K, with an initial franchise fee of $35K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Fresca Palapa franchise owners earn?
According to Item 19 of the Fresca Palapa FDD, the average gross sales per unit is $1.2M. Important context: Based on a single reporting unit - not a system average. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Item 19 in the Fresca Palapa FDD?
The FDD section where a franchisor may disclose financial performance of its outlets. Disclosure is optional and formats vary; figures are typically gross sales, which is revenue before expenses, not profit. FranchiseVerdict extracts these figures directly from the Fresca Palapa FDD and qualifies whose outlets they describe.
What is Fresca Palapa's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Fresca Palapa (fewer than 10 loans on file). Charge-off rates are one way to gauge franchise risk, but not all franchise loans go through the SBA program. We recommend reviewing turnover and closure data in the FDD and speaking with current franchisees.
How many Fresca Palapa franchise locations are there?
As of their most recent FDD filing, Fresca Palapa has 14 total units in the United States, including 3 franchised units and 11 company-owned units. 1 new units were opened in the latest reporting year.
Is Fresca Palapa a good franchise to buy?
FranchiseVerdict rates Fresca Palapa as a B-grade franchise with a verdict score of 56 out of 100 (higher is better), based on our analysis of investment costs, revenue data, SBA loan performance, and growth trends. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
For franchisors
Are you the franchisor?
If you represent Fresca Palapa, you can request corrections or provide updated information.
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.