Panchero's Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
FranchiseVerdict summary · 2026
A Panchero's franchise requires a total initial investment of $755K – $1.6M, including a $30K franchise fee and an ongoing 5.0% royalty[2]. Per the 2026 FDD, average unit revenue was $1.6M[2]. SBA 7(a) loans show a 26.1% charge-off rate across 36 loans[1]. FranchiseVerdict grade: C (Average), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2026 FDD issuance
Overview
- Investment
- $755K – $1.6M
- 30th pct Service Resta…
- Avg gross sales
- $1.6M
- 7th pct Service Resta…
- Royalty
- 5.0%
- 8th pct Service Resta…
- Units
- 73
- 29th pct Service Resta…
- SBA charge-off
- 26.1%
- % of SBA 7(a) loans not repaid · median varies by category
Quick verdict · Full-Service Restaurants · color = vs category peers
Green = favorable by >10% vs Full-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 $755K – $1.6M including a $30K franchise fee, 5.0% ongoing royalty.
- RETURNSAverage unit revenue of $1.6M/year (median $1.4M).
- RISKVerdict C (Average), verdict score 40/100 (higher is better). SBA loan charge-off rate of 26.1% across 36 loans (well above the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Panchero's Franchise Corporation
- Parent company
- Little Donkeys, Inc. (LDI) / LDIP Inc. (affiliates)
- CEO title
- President/Treasurer and Director
- Rodney L. Anderson
- Incorporated in
- Illinois
- HQ
- 2475 Coral Court, Suite B, Coralville, Iowa 52241
Overview
About
Franchisor of PANCHEROS restaurants offering carry-out and on-premises dining featuring burritos, quesadillas, tacos, burrito bowls, salads, rice, salsa and related Mexican-style food and beverage products.
- CEO
- Rodney L. Anderson
- Headquarters
- Iowa
- Founded
- 1994
- FDD year
- 2026
- States available
- 13
Can you afford it, and what does the money buy?
Entry cost is about average for a full-service restaurants franchise.
Source: FDD 2026 · Items 5–7
FDD Item 7 · 2026 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $30K | $30K |
| Working capital (3–6 mo) | $25K | $150K |
| Equipment, build-out, other | $700K | $1.4M |
| Total initial investment | $755K | $1.6M |
Source: Panchero's 2026 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
- $755K – $1.6M
- Top 40% of category vs category
- Liquid capital req'd
- $25K – $150K
- Top 40% of category vs category
- Franchise fee
- $30K
- Top 40% of category vs category
- Royalty
- 5.0%
- typical 6–8%
- Ad fund
- 2.0%
- typical 3–5%
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 5.0% of gross sales |
| Marketing / ad fund | 2.0% |
| Technology fee | $3K |
| Transfer fee | $10K |
| Inventory (initial) | $2K – $5K |
What do units actually make?
Average unit sales run 10% below the full-service restaurants norm.
Source: FDD 2026 · Item 19
Single-unit · not modelled
Returns at a glance
An FDD discloses gross sales, not profit, and the operating costs that turn one into the other are in no filing. We publish no modelled return for Panchero's until someone supplies them — yours, in the models below.
—
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
Total invested capital · disclosed
$1.2M
Item 7 initial investment plus working capital, as filed — the one figure here that needs no assumption.
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, read against the 30–60% reference band · Yale SOM, Post-MBA Path Exhibit 2 (2023). Below that band a passive index fund likely outperforms; above it the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses, and it is the top line only — gross sales are not profit. No FDD discloses the operating costs that turn one into the other, so those fields start empty and nothing is modelled until you supply them from your own lease quote, labor market and build-out budget.
Returns model · single-unit ROIC
What would one Panchero's unit return on the cash you put in?
Illustrative category typicals — not sourced to any filing, survey or sample. Replace them with figures from franchisee validation calls before you rely on the output.
Unlevered ROIC · per unit
Your modelled return on total invested capital, before any debt financing.
—
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
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%.
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
A 25-unit return is built on a per-unit EBITDA. Fill in the operating costs in Model A above and this model runs on that figure, or take the whole scenario to the full ROI workbench, where the portfolio and LBO models accept your own per-unit economics directly.
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: 2026 FDD
Financial Performance
- Avg gross sales
- $1.6M
- Per unit, per year
- Median gross sales
- $1.4M
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- Historical Gross Sales (average/median/high/low), Table 1 and Table 2
- Sample size
- 47 outlets
- vs category median 18 · large
- Range (low → high)
- $312K→$5.1M
- Cohort dispersion (min → max)
- Reporting year
- 2025
- Fiscal year the figures cover
- Source filing
- FDD 2026
- Disclosed in the 2026 filing, covering 2025
Compared against 802 Full-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 $1.6M/year in gross sales. Median is $1.4M — top performers pull the average up, so a typical unit earns less. Revenue-to-investment ratio: 1.4x.
Fee burden
5.0% royalty + 2.0% ad fund.
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 Full-Service Restaurants averages
How Panchero's Compares
Is the system healthy?
Source: FDD 2026 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 73
- Opened
- 1
- Last reporting year
- Closed
- 3
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 2.1%
- Company-owned
- 25
- Corporate units in the system
- % franchised
- 66%
- vs corporate-owned
3-year detail · Item 20
- Opened (3yr)
- 1
- Closed (3yr)
- 0
- Terminated (3yr)
- 0
- Non-renewed (3yr)
- 1
- Transfers (3yr)
- 4
- Reacquired (3yr)
- 0
- Franchisor bought back
Last reporting year only, multi-year history not disclosed in this brand's FDD.
Item 12 · 13 states reported
The Territory Map
FDD Item 12 reports the state count, but the specific list isn't in our current data. The map will appear once we re-extract from the FDD or enough franchisee contacts are available.
13
states with franchisees (per FDD Item 12)
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 36
- Loan volume
- $12.0M
- Median loan
- $386K
- 50th percentile
- Charge-off rate
- 26.1%
- 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)
- 73.9%
- 5-yr charge-off
- N/A
- Loans approved 2021+
- Active lenders
- 23
- Defaults
- 6
- Typical loan rate
- 6.1%
- avg rate to borrowers
- vs industry
- N/A
- NAICS 7225
- Jobs supported
- 208
- 7.7 per loan
- Lender concentration
- 14%
- top lender's share
Borrower mix: 0% went to startups / new businesses, 100% to established operators
Top lenders financing Panchero's franchisees
Showing 3 of 23 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.
A 26.1% charge-off rate means roughly 1 in 4 franchisees failed to repay their SBA loan. Investigate what changed.
What could kill this investment?
SBA loans charge off at 26.1% — 63% above the 16.0% national norm, i.e. higher lender-observed risk.
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
Risk & Legal
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
What are you signing up for?
Ongoing fees run about 7.0% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2026 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 5 years |
| Allowed renewalsℹ | 2 |
| Territory type | none |
| Protected territory | No |
| Exclusive territoryℹ | No |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 10 mi |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Mandatory arbitration | No |
| Governing law | Iowa |
| Litigation count | 0 |
Items 10, 11
Training & Operations
- Classroom training
- 16 hrs
- On-the-job training
- 120 hrs
- Training location
- PANCHEROS Headquarters, Coralville, Iowa (classroom); Franchisor's Selected Training Restaurant (on-the-job)
- Ongoing training
- Required
- Time to open
- 12 mo
- From signing to launch
- Site selection
- Franchisee, subject to franchisor approval
- Franchisor financing
- Not offered
- Item 10
- POS system
- Third-party proprietary POS System (name not specified)
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Third-party proprietary POS System (name not specified)
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Panchero's franchise?
The total investment to open a Panchero's franchise ranges from $755K – $1.6M, with an initial franchise fee of $30K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Panchero's franchise owners earn?
According to Item 19 of the Panchero's FDD, the average gross sales per unit is $1.6M. The median is $1.4M. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Item 19 in the Panchero's 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 Panchero's FDD and qualifies whose outlets they describe.
What is Panchero's's franchise failure rate?
Based on SBA 7(a) loan data, Panchero's has a charge-off rate of 26.1% across 36 loans, meaning 26.1% 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 Panchero's franchise locations are there?
As of their most recent FDD filing, Panchero's has 73 total units in the United States, including 48 franchised units and 25 company-owned units. 1 new units were opened in the latest reporting year.
Is Panchero's a good franchise to buy?
FranchiseVerdict rates Panchero's as a C-grade franchise with a verdict score of 40 out of 100 (higher is better). The grade is a deterministic score built from six weighted dimensions — financial health, unit economics, unit growth, scale, legal, and transparency — then calibrated against SBA loan charge-off rates and FDD age. Transparency is one of the six, so a filing that discloses less scores lower on that dimension than one that discloses more. 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?
If you represent Panchero's, you can request corrections or provide updated information.
Other Full-Service Restaurants franchises
Compare similar franchise opportunities in the Full-Service Restaurants category
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.