Hot Head Burritos Franchise Cost, Revenue & Review 2026
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 →
Data last verified · figures per the 2025 FDD issuance
Overview
- Investment
- $215K – $705K
- 29th pct Service Resta…
- Avg gross sales
- $721K
- Net sales9th pct Service Resta…
- Royalty
- 6.0%
- 46th 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 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 $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).
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 runs 30% below the typical quick-service restaurants franchise.
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%
- percentage · 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 gross sales |
| Marketing / ad fund | 1.0% of gross 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 40% below the quick-service restaurants norm.
Reported as net sales, not gross sales
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
$108K
15.0% margin
Unlevered ROIC
22%
EBITDA / total invested capital
Payback
4.4 yrs
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 Hot Head Burritos unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
22%
Below the 30–60% attractive-franchise band
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 Hot Head Burritos units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$1.2M
on $5.8M purchase
Total debt
$4.6M
SBA $2.9M + 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
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 20 · large
- Range (low → high)
- $270K→$1.6M
- 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 782 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 average of 7.9%.
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 averages
How Hot Head Burritos Compares
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
- 7.1%
- 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
3-year detail · Item 20
- Opened (3yr)
- 7
- Closed (3yr)
- 5
- Terminated (3yr)
- 0
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 12
- Reacquired (3yr)
- 1
- Franchisor bought back
- 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.
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
- N/A
- no resolved loans yet — rate needs a terminal outcome
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- N/A
- 5-yr charge-off
- N/A
- 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.
Premium insight
SBA Lending Report
Deep-dive into Hot Head Burritos's SBA lending history: lender network, geographic footprint, interest rates, and more.
SBA Lending Report
- Principal loss rate and NAICS industry benchmark
- 7 lenders with concentration factor
- Per-state charge-off rates across 3 states
- Startup risk premium and job creation velocity
- 10-year lending trend
Instant access. No subscription.
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)
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
- 01MEDNo Item 19 financial performance representations disclosed — cannot verify claimed average revenue of $720,577 or net income of $264,591
- 02MINORSlow unit growth of only 4.5% YoY with 81 total units suggests mature/stagnant system rather than expansion momentum
- 03MINORWide investment range ($215K-$704K) indicates inconsistent unit economics or unclear cost structure for franchisees
- 04HIGHGoing Concern status is FALSE — unclear if franchisor itself has financial stability concerns or if this refers to franchise viability
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 |
| 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
FDD download
Hot Head Burritos · FDD (2025) PDF
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. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
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), 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?
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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.