Hot Head Burritos
Bottom line
- Total investment $215K – $705K including a $26K franchise fee, 6.0% ongoing royalty.
- Average unit revenue of $721K/year (median $661K). Estimated payback in 1.7 years.
- Rated STRONG with a risk score of 39/100. SBA loan default rate of 0.0% across 24 loans (below the industry average).
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 Hot Head Burritos unit return on the cash you put in?
Unlevered ROIC · per unit
24%
Below typical band (30–60%)
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
$1.3M
on $6.5M purchase
Total debt
$5.2M
SBA $3.2M + senior + seller note
Overview
About
Hot Head Burritos franchisees operate fast-casual Mexican restaurants where customers order customizable burritos, bowls, and related items at counter service. Day-to-day operations involve food preparation, inventory management, staffing, POS systems, marketing, and customer service in high-traffic retail or co-branded locations.
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 · 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 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
Modest growth, undocumented financial claims, and unclear franchisor stability create moderate-to-caution risk requiring extensive validation before committing $215K-$704K.
Score breakdown · what drove the 39 / 100 rating
- 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
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
77 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Hot Head Burritos · FDD (2025) PDF