Hot Head Burritos Franchise Cost, Revenue & Review 2026
- Investment
- $215K – $705K
- Disclosed sales
- $721K
- gross sales, not profit
- SBA charge-off
- Limited · 20 loans
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Hot Head Burritos is a fast-casual franchise serving build-your-own burritos, bowls, tacos, and nachos. Franchisees run restaurants managing food prep, counter service, and staffing.
FranchiseVerdict summary · 2026
A Hot Head Burritos franchise requires a total initial investment of $215K – $705K, including a $26K franchise fee and an ongoing 6.0% royalty[2]. Per the 2025 FDD, average unit revenue was $721K[2]. FranchiseVerdict grade: A (Strongest tier), an editorial assessment, not investment advice. Run a live ROI scan →
Sources, dates and evidence
FDD issued: · Data extracted: · Last cited check: · Staleness risk: medium - issued 12 to 24 months ago; a newer filing is likely on file
Evidence: strong✓ Investment (Item 7)✓ Item 19 status✓ Units and owners (Item 20)✓ SBA loan coverage✓ Litigation (Item 3)✓ Financial statements (Item 21)✓ Franchisor identityhow this is scored8 of 8 headline figures on this page cite a page of the filing.
Overview
- Investment
- $215K – $705K
- 28th pct Service Resta…
- Avg gross sales
- $721K
- Net sales11th pct Service Resta…
- Royalty
- 6.0%
- 48th pct Service Resta…
- Units
- 81
- 73rd 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 median · 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 $215K – $705K including a $26K franchise fee, 6.0% ongoing royalty.
- RETURNSAverage unit revenue of $721K/year (median $661K).
- RISKVerdict A (Strongest tier), verdict score 83/100 (higher is better).
- GROWTHPositive: net +3 franchised outlets in the latest year (3 opened, 0 closed); 5 signed but not yet open (Item 20).
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Hot Head Franchising, LLC
- CEO title
- CEO and President
- Ray Wiley
- CEO experience
- 2009 yrs
- Years in role or industry
- Founder active
- Yes
- Original founder still leading the business
- Incorporated in
- OH
- HQ
- 2795 Culver Ave, Kettering, Ohio 45429
- Auditor
- Muhammad Zubairy, CPA PC
- Audited financials
- Franchisor revenue
- $3.3M
- vs $3.3M prior year
Overview
About
- CEO
- Ray Wiley
- Headquarters
- OH
- Founded
- 2009
- FDD year
- 2025
- States available
- 8
Can you afford it, and what does the money buy?
Entry cost is about typical for a quick-service restaurants franchise (near the category median).
Source: FDD 2025 · Items 5–7
Full Item 7 breakdown11 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Feenot refundable | $17K | $26K | |
| Lease Deposit, Utility Deposit and Rent - 3 months | $9K | $34K | |
| Leasehold Improvements | $96K | $300K | |
| Equipment, Signs, Fixtures and Furniture | $51K | $210K | |
| Initial Inventory | $4K | $7K | |
| POS System | $5K | $12K | |
| Miscellaneous Pre-opening Expenses | $7K | $50K | |
| Training Expenses | $7K | $15K | |
| Opening Advertising and Promotion | $7K | $8K | |
| Liquor License | $1K | $14K | |
| Additional Funds - 3 months | $12K | $30K | |
| Total initial investment | $215K | $705K |
Line items extracted from FDD Item 7. Ranges reflect the franchisor's stated low and high per line. Total is the sum of line-item lows / highs — actual costs may fall outside this range depending on market and build-out scope.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $215K – $705K
- Top 40% of category vs category
- Liquid capital req'd
- $12K – $30K
- Top 40% of category vs category
- Franchise fee
- $26K – $26K
- Top 40% of category vs category
- Royalty
- 6.0%
- typical 6–8%
- Ad fund
- 1.0%
- typical 3–5%
- Total fee load
- 0.1%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 6.0% of net sales |
| Marketing / ad fund | 1.0% of net sales |
| Technology fee | $500 |
| Transfer fee | $10K |
| Renewal fee | $3K |
| Inventory (initial) | $4K – $7K |
| Total fee load | 0.1% of rev |
A 0.1% total fee load is unusually lean. More of each revenue dollar stays with the franchisee.
What do units actually make?
Average unit sales run 26% below the quick-service restaurants norm.
Reported as net sales, not gross sales
Source: FDD 2025 · Item 19
Single-unit · not modelled
Returns at a glance
An FDD discloses gross sales, not profit, and the operating costs that turn one into the other are in no filing. We publish no modelled return for Hot Head Burritos until someone supplies them — yours, in the models below.
—
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
Total invested capital · disclosed
$481K
Item 7 initial investment plus working capital, as filed — the one figure here that needs no assumption.
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, read against the 30–60% reference band · Yale SOM, Post-MBA Path Exhibit 2 (2023). Below that band a passive index fund likely outperforms; above it the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses, and it is the top line only — gross sales are not profit. No FDD discloses the operating costs that turn one into the other, so those fields start empty and nothing is modelled until you supply them from your own lease quote, labor market and build-out budget.
Returns model · single-unit ROIC
What would one Hot Head Burritos unit return on the cash you put in?
Illustrative category typicals — not sourced to any filing, survey or sample. Replace them with figures from franchisee validation calls before you rely on the output.
Unlevered ROIC · per unit
Your modelled return on total invested capital, before any debt financing.
—
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
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%.
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
A 25-unit return is built on a per-unit EBITDA. Fill in the operating costs in Model A above and this model runs on that figure, or take the whole scenario to the full ROI workbench, where the portfolio and LBO models accept your own per-unit economics directly.
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
Reported as net sales, not gross sales
- Avg gross sales
- $721K
- Per unit, per year
- Median gross sales
- $661K
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- net sales plus p and l
- Sample size
- 68 outlets
- vs category median 19 · large
- Range (low → high)
- $270K→$1.6MCited, not corroborated — printed on page 39 of the 2025 FDD. Nothing else in our record independently restates or re-derives it.
- Cohort dispersion (min → max)
- Quartile band
- $450K→$1.1M
- Bottom 25% → top 25%
- Reporting year
- 2024
- Fiscal year the figures cover
- Source filing
- FDD 2025
- Disclosed in the 2025 filing, covering 2024
- Transparency
- 10 / 10
- vs category median 4 / 10 · above
Compared against 781 Quick-Service Restaurants brands
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 $721K/year in gross sales. Revenue-to-investment ratio: 1.6x.
Fee burden
Total ongoing fee load of 0.1% — below the Quick-Service Restaurants median of 7.5%.
Disclosure
Transparency score 10/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence.
Operator retention
System roughly stable (+2.9% 3-year CAGR) with 81 units.
Multi-unit rate
Only 1% of franchisees own multiple units. Could indicate challenging economics or a young system where operators haven't had time to expand.
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 medians
How Hot Head Burritos Compares
Category median of published Quick-Service Restaurants brands that report the figure; the middle half spans the 25th to 75th percentile and n counts the brands behind it. Medians are used because a few very large systems pull an average far from the typical brand. Revenue is disclosed gross sales, not profit.
Is the system healthy?
Source: FDD 2025 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 81
- Opened
- 3
- 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
- N/A
- Company-owned
- 11
- Corporate units in the system
- % franchised
- 86%
- vs corporate-owned
- Multi-unit owners
- 1.0%
- Net growth (3-yr)
- +2.9%
- Net unit change over 3 years
- 3-yr CAGR
- +2.9%
- Compounded over last 3 years
Last fiscal year · Item 20 exits and transfers
- Terminated
- 0
- Not renewed
- 0
- Transferred
- 2
- Reacquired
- 0
- Franchisor bought back
- Signed, not yet open
- 5
- 0.06 per open outlet · Item 20 Table 5
- Projected new
- 5
- Franchisor's next-year forecast
- Transfer rate
- 2.5%
- Owners selling to other franchisees
- Ceased ops
- 1.2%
- Units that stopped operating
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 7 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 contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
Where the owners are · Item 20 owner list
67 current owners across 7 states.
- OH 46
- IN 9
- KY 5
- FL 3
- PA 2
- CT 1
- TX 1
Counts only, from the list the franchisor prints in Item 20. Names and phone numbers are for your own due diligence and are not shown here.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 20
- Loan volume
- $8.5M
- Median loan
- $252K
- 50th percentile
- Charge-off rate
- Limited · 20 loans
- Limited SBA coverage: 20 loans, rate hidden until 10 have resolved and loans reach 2% of franchised units
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- Limited · 20 loans
- 5-yr charge-off
- Limited · 20 loans
- Loans approved 2021+
- Active lenders
- 7
- Defaults
- 1
- Typical loan rate
- 7.1%
- avg rate to borrowers
- Franchised industry avg
- 10.8%
- n=12,827 loans
- Jobs supported
- 288
- 4.1 per loan
- Lender concentration
- 50%
- top lender's share
Borrower mix: 50% went to startups / new businesses, 50% to established operators
Franchise vs independent — in limited-service restaurants, franchised businesses charge off at 10.8% vs 10.0% for independents — franchising is associated with 8% higher SBA default risk in this category.
Top lenders financing Hot Head Burritos franchisees
Showing 3 of 7 lenders. The full breakdown — every lender, state distribution, interest rates & risk ratings — is in the SBA Lending Report below.
Explore lender portfolios on Bank Reports or regional data on State Reports.
Lender network · 7(a) + 504
SBA Lending Report
Full lending analysis for Hot Head Burritos from SBA 7(a) FOIA data.
- Principal loss rate
- 3.8%
- Avg SBA guarantee
- 70%
- Avg interest rate
- 7.12%
- Avg chargeoff amount
- $266K
- Lender concentration
- 50.0%
- Job velocity
- 4.1 per $100K
- NAICS benchmark
- 8.7%
- NAICS 722513
- Jobs supported
- 288
Top SBA lendersTop lender holds 50% of loans
| # | Lender | Loans | Volume | Default % |
|---|---|---|---|---|
| 1 | The Huntington National Bank | 8 | $4.2M | 20.0% |
| 2 | JPMorgan Chase Bank, National Association | 3 | $413K | 0.0% |
| 3 | Readycap Lending, LLC | 1 | $260K | N/A |
| 4 | Peoples State Bank | 1 | $200K | 0.0% |
| 5 | Grow America Fund, Incorporated | 1 | $500K | N/A |
| 6 | Newtek Bank, National Association | 1 | $250K | N/A |
| 7 | Gulf Coast Bank and Trust Company | 1 | $1.2M | N/A |
Geographic failure vector
| State | Loans | Defaults | Rate |
|---|---|---|---|
| OHOhio | 11 | 0 | 0.0% |
| INIndiana | 3 | 0 | 0.0% |
| MIMichigan | 2 | 1 | 50.0% |
SBA 7(a) lending trend
Borrower profile
Source: SBA 7(a) + 504 FOIA loan-level data, matched by FranchiseVerdict
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
Modest growth, undocumented financial claims, and unclear franchisor stability create moderate-to-caution risk requiring extensive validation before committing $215K-$704K.
Litigation (Item 3)
Subject: officers or affiliates. The franchisor is not a named party in these cases.
No litigation required to be disclosed in Item 3
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Muhammad Zubairy, CPA PC
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 83 / 100 verdict
- 01MINORSlow unit growth of only 4.5% YoY with 81 total units suggests mature/stagnant system rather than expansion momentum
- 02MINORWide investment range ($215K-$704K) indicates inconsistent unit economics or unclear cost structure for franchisees
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 0.1% 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 | 10 years |
| Allowed renewalsℹ | 3 |
| Territory type | Protected territory |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| Territory radius | 2 mi |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | Yes |
| 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 |
| Curable defaultsℹ | 5 |
| Mandatory arbitration | Yes |
| Arbitration location | Kettering/corporate headquarters, Ohio |
| Jury trial waiver | No |
| Governing law | OH |
| Litigation count | 0 |
View Item 3 litigation summary
No litigation required to be disclosed in Item 3
Items 10, 11
Training & Operations
- Classroom training
- 37 hrs
- On-the-job training
- 80 hrs
- Training location
- Kettering, OH (corporate training center) and designated Restaurant locations
- Ongoing training
- Required
- Site selection
- franchisee with franchisor approval
- Franchisor financing
- Not offered
- Item 10
- POS system
- Qu POS
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Qu POS
Item 20 · call current owners
Franchisee Contacts
67 owners to call
Name · phone · city · state. Extracted from FDD Item 20
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Hot Head Burritos franchise?
The total investment to open a Hot Head Burritos franchise ranges from $215K – $705K, with an initial franchise fee of $26K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Hot Head Burritos franchise owners earn?
According to Item 19 of the Hot Head Burritos FDD, the average gross sales per unit is $721K. The median is $661K. Important context: Reported as net sales, not gross sales. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
Who owns Hot Head Burritos?
Hot Head Burritos is franchised by Hot Head Franchising, LLC. Source: FDD Item 1, 2025 filing.
What is Item 19 in the Hot Head Burritos 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 Hot Head Burritos FDD and qualifies whose outlets they describe.
What is Hot Head Burritos's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Hot Head Burritos (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 Hot Head Burritos franchise locations are there?
As of their most recent FDD filing, Hot Head Burritos has 81 total units in the United States, including 70 franchised units and 11 company-owned units. 3 new units were opened in the latest reporting year.
Is Hot Head Burritos a good franchise to buy?
FranchiseVerdict rates Hot Head Burritos as a A-grade franchise with a verdict score of 83 out of 100 (higher is better). The grade is a deterministic score built from six weighted dimensions — financial health, unit economics, unit growth, scale, legal, and transparency — then calibrated against SBA loan charge-off rates and FDD age. Transparency is one of the six, so a filing that discloses less scores lower on that dimension than one that discloses more. 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?
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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.