Mike’s Red Tacos
Bottom line
- Total investment $640K – $2.0M including a $40K franchise fee, 5.0% ongoing royalty.
- Average unit revenue of $3.0M/year.
- Rated MODERATE with a risk score of 63/100.
- Emerging franchise — only 1 year of franchising with 2 units. Early-stage systems carry higher risk but may offer better territory availability.
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 Mike’s Red Tacos unit return on the cash you put in?
Unlevered ROIC · per unit
33%
In Yale's "attractive" band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Mike’s Red Tacos units return on equity?
Equity IRR · 5-yr
27.7%
3.39× MOIC
Year-1 DSCR
2.94×
EBITDA ÷ debt service
Equity required
$11.6M
on $23.7M purchase
Total debt
$12.1M
SBA $5.0M + senior + seller note
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.
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 · 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 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.
No SBA loan data available for this brand.
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.
Score breakdown · what drove the 63 / 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
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
13 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Mike’s Red Tacos · FDD (2025) PDF