Hot Head BurritosFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
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]. SBA 7(a) loans show a 12.5% charge-off rate across 20 loans[1]. Verdict grade: A. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2025 FDD issuance
Overview
- Investment
- $215K – $705K
- 11th pct Service Resta…
- Avg gross sales
- $721K
- 5th pct Service Resta…
- Royalty
- 6.0%
- 26th pct Service Resta…
- Units
- 81
- 40th pct Service Resta…
- SBA default
- 12.5%
- system-wide median varies by category
Quick verdict · Full-Service Restaurants · color = vs category peers
Green = >15% above Full-Service Restaurants avg · No shading = within ±15% · Red = >15% below avg · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Franchised units fell from 70 to 68 over 3 years. Investigate why operators are leaving.
58% cash-on-cash return (based on P&L Bottom Line). Above the 20% threshold most investors target.
Bottom line
- Total investment $215K – $705K including a $26K franchise fee, 6.0% ongoing royalty.
- Average unit revenue of $721K/year (median $661K), with an estimated 58% cash-on-cash return (based on P&L Bottom Line).
- Verdict A (Top Quintile) with a risk score of 25/100. SBA loan charge-off rate of 12.5% across 20 loans (above the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2024).
Item 1 · who you're contracting with
The Franchisor
- 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
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.
- CEO
- Ray Wiley
- Headquarters
- OH
- Founded
- 2009
- FDD year
- 2025
- States available
- 8
FDD Item 7 · 2025 filing · 11 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.
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
$79K
11.0% margin
Unlevered ROIC
16%
EBITDA / total invested capital
Payback
6.1 yrs
cash-on-cash, unlevered
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $215K – $705K
- Better than avg vs category
- Liquid capital req'd
- $12K – $30K
- Better than avg vs category
- Franchise fee
- $17K – $26K
- Better than avg vs category
- Royalty
- 6.0%
- Net Sales · typical 6–8%
- Ad fund
- 1.0%
- typical 3–5%
- Total fee load
- 7.0%
- vs 9–13% typical
- Payback period
- 1.7 yrs
- From FDD / Item 19
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 6.0% of gross sales |
| Marketing / ad fund | 1.0% of gross sales |
| Technology fee | $1K |
| Transfer fee | $10K |
| Renewal fee | $3K |
| Total fee load | 7.0% of rev |
Financial Performance
- Avg gross sales
- $721K
- Per unit, per year
- Median gross sales
- $661K
- Avg p&l bottom line
- $265K
- Reported as P&L Bottom Line in FDD Item 19
- Cash-on-cash
- 57.5%
- Based on P&L Bottom Line / investment midpoint
- Item 19 type
- net_sales
- Sample size
- 68 units
- vs category median 13 · 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
- Transparency
- 10 / 5
- vs category median 4 / 5 · above
Compared against 1264 Full-Service Restaurants brands
vs Full-Service Restaurants averages
How Hot Head Burritos Compares
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
- 0.0%
- Company-owned
- 11
- Corporate units in the system
- % franchised
- 86%
- vs corporate-owned
- Multi-unit owners
- 1.0%
- Net growth (yr3)
- +4.5%
- Net unit change last year
- 3-yr CAGR
- +2.9%
- Compounded over last 3 years
3-year detail · Item 20
- Transfers (3yr)
- 2
- 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
- 12.5%
- rates vary by category · see methodology
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- 87.5%
- 5-yr charge-off
- 0.0%
- Loans approved 2021+
- Active lenders
- 7
- Defaults
- 1
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.
Risk analysis
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.
Litigation (Item 3)
No litigation information required to be disclosed. See Exhibit F for area developer disclosures.
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 25 / 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
| Initial term | 10 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 3 |
| Territory type | Radius |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| Territory radius | 2 mi |
| Online sales rights | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| 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 | corporate headquarters |
| Jury trial waiver | No |
| Governing law | Ohio |
| Litigation count | 0 |
View Item 3 litigation summary
No litigation information required to be disclosed. See Exhibit F for area developer disclosures.
Items 10, 11
Training & Operations
- Classroom training
- 37 hrs
- On-the-job training
- 80 hrs
- Training location
- On-site and corporate
- 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 Hot Head Burritos's franchise failure rate?
Based on SBA 7(a) loan data, Hot Head Burritos has a charge-off rate of 12.5% across 20 loans, meaning 12.5% of franchise loans were charged off. Charge-off rates are one proxy for franchise risk, though they do not capture all closures. This data comes from FOIA-sourced SBA lending records.
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 risk score of 25 out of 100, 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.
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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.