Mike’s Red TacosFranchise Cost, Revenue & Review 2026
Data from FDD filing
FranchiseVerdict summary · 2026
A Mike’s Red Tacos franchise requires a total initial investment of $640K – $2.0M, including a $40K franchise fee and an ongoing 5.0% royalty[2]. The 2025 FDD does not disclose unit-level revenue (no Item 19). Verdict grade: A. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2025 FDD issuance
Overview
- Investment
- $640K – $2.0M
- 38th pct Service Resta…
- Avg gross sales
- N/A
- 28th pct Service Resta…
- Royalty
- 5.0%
- 7th pct Service Resta…
- Units
- 2
- 6th pct Service Resta…
- SBA default
- N/A
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
Started franchising in 2025. Newer systems carry more uncertainty but may offer better territories.
Bottom line
- Total investment $640K – $2.0M including a $40K franchise fee, 5.0% ongoing royalty.
- Item 19 disclosed $3.0M from 1 affiliate-owned outlet across 2 total units. This reflects franchisor operations, not franchisee performance.
- Verdict A (Top Quintile) with a risk score of 39/100.
- Item 19 reports "Historical Performance - Affiliate Location" instead of annual gross sales. Ask franchisees directly for full unit-level revenue.
Item 1 · who you're contracting with
The Franchisor
- Legal entity
- Mike’s Red Tacos Franchise Co, LLC
- Predecessor
- or parent entities
- Prior franchisor entity
- Incorporated in
- DE
- HQ
- 1308 E Colorado Blvd., Suite 2216, Pasadena, California 91106
- Auditor
- Talley LLP
- Audited financials
Overview
About
Franchisees operate quick-service Mexican casual dining restaurants featuring tacos and related fare. Daily operations include food preparation, inventory management, customer service, and staffing across lunch and dinner service windows, likely with 15-30 employees per location.
- CEO
- Vincent Montanelli
- Headquarters
- CA
- Founded
- 2024
- FDD year
- 2025
- States available
- 1
FDD Item 7 · 2025 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $40K | $40K |
| Working capital (3–6 mo) | $16K | $48K |
| Equipment, build-out, other | $584K | $1.9M |
| Total initial investment | $640K | $2.0M |
Source: Mike’s Red Tacos 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
- $640K – $2.0M
- Better than avg vs category
- Liquid capital req'd
- $16K – $48K
- Better than avg vs category
- Franchise fee
- $40K – $40K
- Better than avg vs category
- Royalty
- 5.0%
- percentage_of_gross · typical 6–8%
- Ad fund
- 3.0%
- typical 3–5%
- Total fee load
- 8.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 5.0% of gross sales |
| Marketing / ad fund | 3.0% of gross sales |
| Transfer fee | $20K |
| Renewal fee | $20K |
| Inventory (initial) | $20K – $50K |
| Total fee load | 8.0% of rev |
Financial Performance
Item 19 disclosed $3.0M from 1 affiliate-owned outlet across 2 total units. This reflects franchisor operations, not franchisee performance.
vs Full-Service Restaurants averages
How Mike’s Red Tacos Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 2
- Opened
- 0
- Last reporting year
- Closed
- 0
- Turnover rate
- 0.0%
- Company-owned
- 2
- Corporate units in the system
- % franchised
- 0%
- vs corporate-owned
3-year detail · Item 20
- Opened (3yr)
- 0
- Closed (3yr)
- 0
- Transfers (3yr)
- 0
- Projected new
- 8
- Franchisor's next-year forecast
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 13 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.
Available to sell in · Item 12
- Michigan
States where the franchisor is registered to sell new franchises (FDD registration filings).
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.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Extremely early-stage franchisor (2 units) with undisclosed profitability, going concern issues, and insufficient data to validate business model viability.
Litigation (Item 3)
0 case reference(s): 0 pending, 0 settled.
Largest disclosed settlement: $40,000
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Talley LLP
Supplier relationship · Items 8 & 16
- Franchisor sells you products: No
- Must buy proprietary products: Yes
- Restricted to system-approved products: No
Score breakdown · what drove the 39 / 100 rating
- 01MEDOnly 2 units in system with unknown growth trajectory suggests extremely limited track record and replicability validation
- 02MEDNet income not disclosed in FDD Item 19 prevents franchisee from assessing actual profitability despite $2.96M average revenue claim
- 03HIGHGoing Concern status is False, indicating potential financial instability or undisclosed operational challenges at franchisor level
- 04MINORWide investment range ($639.8K–$1.99M) with no clear cost breakdown suggests inconsistent unit economics or hidden variables
- 05MINORMicro-franchise system (2 units) creates high risk of franchisor collapse before franchisee reaches profitability
- 06HIGHNo litigation disclosed but minimal system size limits statistical relevance of this claim
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 | 2 |
| Territory type | radius or geographic area |
| Protected territory | Yes |
| Online sales rights | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 2 years |
| Right of first refusalℹ | Yes |
| Termination notice | 30 days |
| Curable defaultsℹ | 4 |
| Mandatory arbitration | Yes |
| Jury trial waiver | Yes |
| Governing law | Franchisor’s Choice of Law State |
| Litigation count | 0 |
View Item 3 litigation summary
0 case reference(s): 0 pending, 0 settled.
Items 10, 11
Training & Operations
- Classroom training
- 36 hrs
- On-the-job training
- 254 hrs
- Training location
- On-site and corporate
- Site selection
- franchisee
Items 5 & 11
Franchisor Support
Item 20 · call current owners
Franchisee Contacts
13 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Mike’s Red Tacos · FDD (2025) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Mike’s Red Tacos franchise?
The total investment to open a Mike’s Red Tacos franchise ranges from $640K – $2.0M, with an initial franchise fee of $40K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Mike’s Red Tacos franchise owners earn?
Mike’s Red Tacos does not disclose average franchise owner earnings in their FDD Item 19. Not all franchisors are required to make financial performance representations. We recommend asking existing franchisees directly about their financial experience.
What is Mike’s Red Tacos's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Mike’s Red Tacos (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 Mike’s Red Tacos franchise locations are there?
As of their most recent FDD filing, Mike’s Red Tacos has 2 total units in the United States, including 0 franchised units and 2 company-owned units.
Is Mike’s Red Tacos a good franchise to buy?
FranchiseVerdict rates Mike’s Red Tacos as a A-grade franchise with a risk score of 39 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.