Panchero's Franchise Cost & 2026 FDD Data
55/100
Second tier
55 this brand53 Full-Service Restaurants medianlikely 49–61: narrower with more SBA loans (high confidence)
Higher is better · an editorial assessment, not investment advice
#1,376 of 3,068 graded brands
Why a B: Helped by scale, legal record and transparency. Held back by unit economics. See all six factors
- Total investment
- $755K – $1.6M
- Avg gross sales
- $1.6M
- “Franchised Restaurants (full CY2025)”, 47 outlets; not profit
- SBA charge-off
- 23.8%
1 in 4 SBA 7(a) loans to Panchero's owners charged off (5 of 21 resolved loans, approved FY2007 to FY2009); Full-Service Restaurants median 14.5%.
Data from the FDD filing + SBA 7(a) records. Analysis by FranchiseVerdict · Methodology · Website · Report an error · Franchisor? Claim this listing
FranchiseVerdict summary · 2026 FDD
Per the 2026 FDD, a Panchero's franchise requires a total initial investment of $755K – $1.6M, including a $30K franchise fee. Once open, the ongoing royalty is 5.0%. Per the 2026 FDD, average gross sales were $1.6M (Item 19 group “Franchised Restaurants (full CY2025)”, 47 outlets; gross sales, not profit). SBA 7(a) loans show a 23.8% charge-off rate on 21 resolved loans. Verdict grade: B (Second tier), an editorial assessment, not investment advice.
Sources: 2026 FDD · SBA 7(a) loan records (FOIA) · What one unit could make and lose →
Sources, dates and evidence
FDD issued: · Data extracted: · Last cited check: · Staleness risk: low (issued within the last 12 months)
Evidence for the headline figures: strong✓ Investment (Item 7)✓ Item 19 status✓ Units and owners (Item 20)✓ SBA loan coverage✓ Litigation (Item 3)✓ Financial statements (Item 21)✓ Franchisor identityhow this is scored8 of 8 headline figures on this page cite a page of the filing.
Overview
Quick verdict · vs Full-Service Restaurants median
Top edge: green = better than the Full-Service Restaurants median by more than 10%, red = worse by more than 10%, gray = within 10% or no benchmark. Source: FDD filings + SBA 7(a).
Data from public FDD filings and SBA records. Methodology
Bottom line
- RETURNSAverage gross sales of $1.6M/year (outlet median $1.4M; Item 19 group “Franchised Restaurants (full CY2025)”, 47 outlets; gross sales, not profit).
- GROWTHIn the latest Item 20 year, the number of franchised outlets fell by 2 (1 opened, 3 closed).
AT STAKEOne unit at the Item 7 midpoint: $149K a year in payments on assumed SBA 7(a)-style terms.You put in about $231K of your own cash and personally guarantee a $923K loan. Assumptions are labeled in Sales; not investment advice.See what one unit could make and lose
Things to check before you sign (2)
- Net -2 franchised outlets in 2025 (Item 20, outlet counts). Ask owners why outlets closed.
- SBA 7(a) charge-off 23.8% on 21 resolved loans approved FY2007 to FY2009, above the Full-Service Restaurants median of 14.5% (30 brands).
Checked and clear: no auditor doubt that the franchisor can keep operating, no lawsuit naming the franchisor in Item 3, no rule that the owner must run it personally and the full filing on file, and an Item 19 average from 47 units. Not on file here, so ask: competition inside your territory, jury-trial waiver and supplier rebates.
What to do next
Step 1: Read the FDD itself.
Free: the franchisor must give it to you at least 14 days before you sign or pay. Or look it up in a state registry (Wisconsin, Minnesota, California). What to read first.
Step 2: Talk to current and former owners.
Free: Item 20 of the FDD lists every current owner and those who left last year, most with a phone number. Questions to ask.
Step 3: Talk to an SBA lender.
Free: the SBA's Lender Match, or the lenders already lending to this brand in the SBA section. Ask what you would personally guarantee and what the monthly payment would be. If you plan to use retirement savings, ask a CPA about the rules for that first.
Step 4: Have a franchise attorney review the FDD and agreement.
Free: your state bar's lawyer referral service can name franchise lawyers, and many offer a short first consultation. Bring the checks listed above.
Research steps, not investment or legal advice.
Can you afford it, and what does the money buy?
Entry cost (the Item 7 midpoint) is near the Full-Service Restaurants median ($1.1M).
Source: FDD 2026 · Items 5–7 (fees and startup costs)
Do you qualify? The filing states no minimum net worth or liquid capital. Ask Panchero's Franchise Corporation (Item 1: 2475 Coral Court, Suite B, Coralville, Iowa 52241) and your lender what they require, and keep living costs for the first year outside the deal.
Full Item 7 breakdown16 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Fee | $30K | $30K | |
| Real Estate/Rent and Security Deposit | $0 | $30K | |
| Utility Security Deposits | $0 | $5K | |
| Leasehold Improvements | $450K | $900K | |
| Furniture, Fixtures & Equipment | $165K | $220K | |
| Initial Merchandise Purchases | $2K | $5K | |
| Initial Inventory | $8.5K | $15K | |
| Insurance | $3.5K | $17K | |
| Training | $5K | $15K | |
| Initial Marketing Campaign | $30K | $50K | |
| Signage | $12K | $43K | |
| Point-of-Sale System (“POS System”) and Back Office Software | $13.5K | $18K | |
| Office Equipment/ Supplies | $3K | $7K | |
| Licenses and Permits | $1K | $7.5K | |
| Professional Fees | $6K | $40K | |
| Additional Funds (3 months) | $25K | $150K | |
| Total initial investment | $755K | $1.6M |
Line items extracted from FDD Item 7. Ranges reflect the franchisor's stated low and high per line. The total row is the total as printed in Item 7. Actual costs may fall outside this range depending on market and build-out scope.
Item 6 · what you pay once you are open
Ongoing fees
| Fee | Amount |
|---|---|
| Royalty | 5.0% of gross revenues |
| Marketing / ad fundBrand-wide marketing pool. Up to 3% of Gross Revenues; currently 2% | 2.0% |
| Technology feeBack office solution software $2,750-$3,750/year plus POS Supplier support/maintenance $4,500-$6,000/year | $2,750–$3,750/year |
| Transfer fee | $10,000 |
| Total fee loadnear the Full-Service Restaurants median of 6.4% | 7.0% of sales |
What do units actually make?
Average gross sales are 15% below the Full-Service Restaurants median ($1.9M).
Source: FDD 2026 · Item 19 (sales and earnings)
Items 6 (other fees), 7 (startup costs) and 19 (sales and earnings) · assumptions labeled
What you could make and lose: one unit
What one Panchero's unit would ask of you, from the filing's Item 7 total and labeled assumptions.
Average gross sales are $1.6M (FDD p.51), and the royalty and ad fund take about $112K of that a year (Item 6). This brand's Item 19 prints cost or operating-income lines that are not on this page yet. Read them in Item 19 and enter them here. So this box does not estimate a profit. To cover the loan payment alone, one unit has to clear $149K a year after its food, labor, rent and other costs and the franchisor's fees.
How these figures are worked out
- Loan (assumption): 80% of the $1.2M Item 7 midpoint is a $923K loan, paid over 10 years at 10.5%: $149K a year. SBA 7(a)-style terms on a long-term rate; your lender sets yours. Panchero's' past SBA 7(a) loans averaged 6.2% at approval; 7(a) rates move with the prime rate, so 10.5% is a current-rate assumption, not this brand's history.
What you put at risk
Your own cash in: about $231K Assumption (the part the loan does not cover of the $1.2M Item 7 midpoint), plus whatever anything Item 7 leaves out (its notes say what). The loan is $923K.
Personal guarantee. SBA 7(a) loans require a personal guarantee from anyone who owns 20% or more of the business. If the unit cannot pay, the lender can collect from you personally, which can include your savings and your home. The worst case is losing the cash you put in and still owing the rest of the loan.
Gross sales are not profit, and none of these figures is take-home pay until tax and every operating cost are paid. The assumptions are ours, not the filing's. Not investment advice.
Returns modelOne unit · several units · editable
One unit
One unit: what is left after the loan payment
Gross sales, minus the franchisor's fees and the operating costs, is the unit's EBITDA (earnings before interest, taxes, depreciation and amortization). Minus an assumed loan payment, that is what is left for you, before tax. Gross sales are not profit.
This brand's Item 19 prints cost or operating-income lines that are not on this page yet. Read them in Item 19 and enter them here. Invested capital is the Item 7 total, which already includes its working-capital (additional funds) line.
Returns model · one unit
What would one Panchero's unit leave you each year after the loan payment?
Item 19: $1,598,866 average for 47 outlets (Franchised Restaurants (full CY2025)). Use a figure for outlets like yours if yours differ.
Gross sales, not profit: the costs below decide what is left.
Item 6, as stored, a year. A fixed fee, so it comes off EBITDA as dollars, not a share of sales.
This brand's Item 19 prints cost or operating-income lines that are not on this page yet. Read them in Item 19 and enter them here.
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.
Item 7 midpoint of $755K to $1.6M
Item 7's $25K to $150K additional funds are already in the total
Left after the loan payment · per year
The unit's EBITDA minus the assumed loan payment. Before tax, depreciation and any cost your inputs leave out (insurance, accounting and legal, licenses, technology fees): not take-home pay.
Gross sales are not profit. Neither the filing nor a stated assumption on this page supplies COGS, labor, rent / occupancy and other operating costs. Enter your own (a lease quote, owner calls) and the model runs on it.
Loan of $923K at 10.5% over 10 years, an assumption, not a quote. Return and payback are before tax, depreciation and the costs above. The loan usually needs your personal guarantee.
Buying several existing units? The acquisition scenario
Buying several units
What buying a few existing units could return
Prices an existing operator of a few units off the single-unit EBITDA above, after shared services, and finances it with an SBA 7(a) loan, a conventional loan and a seller note. It shows the yearly return on your cash (IRR), whether year-1 earnings cover the loan payments (DSCR) and how the price is paid for. It starts at 5 units; every deal term is an assumption you can change, and none is from the FDD.
Not modelled yet
Gross sales are not profit. Neither the filing nor a stated assumption on this page supplies COGS, labor, rent / occupancy and other operating costs. Enter your own (a lease quote, owner calls) and the model runs on it.
This scenario starts from a per-unit EBITDA. Fill in the operating costs in the one-unit model above and it runs on that figure, or take it to the full ROI workbench, where the multi-unit and acquisition models accept your own per-unit economics.
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 · filed by Panchero's Franchise Corporation
Financial performance
- Range (low → high)
- $312K→$5.1MSource: 2026 FDD, page 51
- Cohort dispersion (min → max)
Percentile ranks within Full-Service Restaurants
Each rank is among the Full-Service Restaurants brands that report that figure (the count is under each bar).
vs Full-Service Restaurants medians
How Panchero's compares
Category median of published Full-Service Restaurants brands that report the figure; the middle half spans the 25th to 75th percentile and n counts the brands behind it. Medians are used because a few very large systems pull an average far from the typical brand. Revenue is disclosed gross sales, not profit.
Who are you contracting with?
Panchero's Franchise Corporation, owned by Little Donkeys, Inc. (LDI) / LDIP Inc. (affiliates).
Same franchisor, other program: Pancheros Mexican Grill. Each is a separate offering with its own page.
Item 1 (the franchisor) · 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)
- FDD Item 1, page 8 of the 2026 FDD
- 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
- States and territories listed
- 13
- registered or offered in, as the filing lists them (DC and territories included); not where units may open
Is the system healthy?
0 franchised outlets over the two years to 2025 (48 to 48, 0.0% in total, 0.0% a year compounded).
Source: FDD 2026 · Item 20 (outlets opened, closed and transferred)
Item 20 (outlet counts) · unit dynamics
The growth chart
- Company-owned
- 25
- Corporate units in the system
- % franchised
- 66%
- vs corporate-owned
Last fiscal year · Item 20 rates and pipeline
- Reacquired
- 0
- Franchisor bought back
- Signed, not yet open
- 7
- 1 for every 10 open outlets · Item 20 Table 5
- Projected new
- 6
- Franchisor's next-year forecast
Item 20 · franchised units at year end
Franchised units held at 48 from 2023 to 2025
Axis does not start at zero.
Source and method
Government records
SBA loan data
Lenders charged off 23.8% of 21 resolved SBA 7(a) loans, above the 14.5% category median. 7(a) is the SBA's main small-business loan; a resolved loan was paid in full or charged off.
- Loans on file
- 25
- SBA 7(a) loans matched to this brand, incl. those still being repaid
- Loan volume
- $8.3M
- Average loan
- $331K
- loan volume divided by loans
- Charge-off rate
- 23.8%
- 5 of 21 resolved loans
- Paid in full
- 76.2%
- of resolved loans
- Recent-loan charge-off
- Too early to judge
- only 0 recent loans have been resolved
- Lenders
- 20
- Average interest rate
- 6.2%
- Jobs reported
- 489
- Lender concentration
- 12%
- top lender's share
Cumulative: every 7(a) loan matched to this brand in the SBA’s FOIA files, approved FY1991 onward. Historical lending data, not predictive of future performance. How SBA charge-off rates are calculated
Benchmark: the median Full-Service Restaurants brand charges off 14.5% (30 brands with a published rate, same cumulative window and source). This brand is 9.3 points above it.
Explore lender portfolios on Bank Reports or regional data on State Reports.
Full SBA lending reportlenders · charge-off rate · trend
Lender network · SBA 7(a)
SBA Lending Report
Lender, state and yearly detail for Panchero's from SBA 7(a) FOIA loan records.
- Average SBA guarantee
- 73%
- Average interest rate
- 6.2%
- Lender concentration
- 12%
- Jobs reported
- 489
Top 10 SBA lenders by loan count
| Loans | Volume | Charge-off |
|---|---|---|
| Stearns Bank National Association | ||
| 1 | $350K | Not on file |
| Bank of Hope | ||
| 1 | $411K | Not on file |
| Dacotah Bank | ||
| 1 | $386K | Not on file |
| TD Bank, National Association | ||
| 1 | $50K | Not on file |
| Webster Bank National Association | ||
| 1 | $667K | Not on file |
A lender’s rate counts only its resolved loans, the loans that have finished (paid in full or charged off); a 0.0% often means few of its loans have finished. Under 10 resolved loans, the rate reads “Too few”.
Charge-off rate by state (top 10 by loans)
| State | Loans | Charged off | Rate |
|---|---|---|---|
| NJ New Jersey | 8 | 1 | Too few8 resolved |
| IL Illinois | 3 | 0 | Too few1 resolved |
| IA Iowa | 2 | 0 | Too few2 resolved |
| MO Missouri | 2 | 2 | Too few2 resolved |
| VA Virginia | 2 | 2 | Too few2 resolved |
| CA California | 1 | 0 | Too few1 resolved |
| CO Colorado | 1 | 0 | Too few1 resolved |
| CT Connecticut | 1 | 0 | Too few1 resolved |
| MA Massachusetts | 1 | 0 | Too few0 resolved |
| MN Minnesota | 1 | 0 | Too few1 resolved |
Rate: charged-off loans over resolved loans (paid in full plus charged off), shown from 10 resolved loans. "Too few": under 10 resolved. The Loans column counts every approval in the window, including loans still being repaid.
SBA 7(a) loans approved per year
Source: SBA 7(a) FOIA loan-level data, matched to the brand by FranchiseVerdict.
A 23.8% charge-off rate means about 1 in 4 resolved SBA 7(a) loans to this brand was charged off. The approval-year chart above shows which years they came from.
What are the risks?
Main risk in the grade: unit economics. The reasons are below.
Source: SBA 7(a) FOIA · FDD Items 3, 21
Verdict grade + FDD Items 3 (litigation), 4 (bankruptcy), 8 (required suppliers), 16 (what you may sell), 21 (audited financials)
Risk and legal
Grade B: Second tier, 55/100 (category median 53); the full grade is at the top of the page.
How the grade is built
Why a B, factor by factor
- Financial health NeutralAudited financials; no going-concern doubt
- Unit economics Weighs on it, weakest dimensionAvg gross sales $1.6M on a $1.2M investment midpoint, 1.4x (gross sales, not profit)
- Unit growth Neutral0 franchised outlets over the two years to 2025 (48 to 48, 0.0% in total, 0.0% a year compounded); turnover 4.1%
- Scale Helps48 franchised units, +25 company-owned (73 in all); franchising since 1995
- Legal HelpsNo litigation naming the franchisor in Item 3
- Transparency HelpsItem 19 discloses financial performance; audited financials; no franchisor financial figures on file
- Adjustments after the six dimensions (-15 points)SBA loan record: the SBA charge-off rate (23.8% on 21 resolved loans approved FY2007 to FY2009) is between 20% and 50%, a range the score counts against a brand, so it took 15 points off. The score uses fixed ranges, not the category median, so a rate below its category median can still cost points.
From the six scored dimensions, an editorial assessment, not investment advice. How the score is built
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes
Supplier relationship · Items 8 & 16
Ask what the franchisor earns on the supplies it sells you or the rebates it takes (Item 8).
- 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 your own operating costs.
Source: FDD 2026 · Items 11, 12, 17
FDD Items 12 (territory), 15 (owner participation) and 17 (renewal, termination and disputes)
Contract and territory detail
| Allowed renewals | 2 |
|---|---|
| Protected territory | No |
| Exclusive territory | No |
| Who runs it (Item 15) | A manager may run it |
| Non-compete (years) | 2 years |
| Non-compete (miles) | 10 mi |
| Right of first refusal | Yes |
| Transfer requires consent | Yes |
| Mandatory arbitration | No |
| Governing law | Iowa |
Items 10 (financing), 11 (training and support)
Training and 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 (initial fees) & 11 (training and support)
Franchisor support
Franchisee contacts
We hold no owner list for this brand. Item 20 of the FDD lists the current and former owners; the free FDD is the source.
Frequently asked questions
How much does it cost to open a Panchero's franchise?
Per the 2026 FDD, the total investment to open a Panchero's franchise ranges from $755K to $1.6M, with an initial franchise fee of $30K. This is the Item 7 total in the Franchise Disclosure Document (FDD): the startup costs the franchisor lists, such as build-out, equipment, inventory and working capital. It usually leaves out buying land or a building; Item 7's notes say what is excluded.
What do Panchero's franchise owners earn?
According to Item 19 of the Panchero's FDD, average gross sales were $1.6M (Item 19 group “Franchised Restaurants (full CY2025)”, 47 outlets; gross sales, not profit). The median is $1.4M. What an owner keeps depends on location, operating costs and management.
Who owns Panchero's?
Panchero's is franchised by Panchero's Franchise Corporation. Its parent company is Little Donkeys, Inc. (LDI) / LDIP Inc. (affiliates). Source: FDD Item 1, 2026 filing.
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' franchise failure rate?
There is no published franchise failure rate. What is measurable is Panchero's' SBA charge-off rate: 23.8% on 21 resolved loans approved FY2007 to FY2009. Put plainly: 1 in 4 SBA 7(a) loans to Panchero's owners charged off (5 of 21 resolved loans, approved FY2007 to FY2009). The SBA charge-off rate is the share of a brand's resolved SBA 7(a) loans to its franchisees that the SBA wrote off, including purchased guarantees. Resolved means paid in full or charged off; active loans are excluded because their outcome is not yet known. It is a lending outcome, not a count of closed businesses. A franchisee can repay and close, or default and keep trading.
How many Panchero's franchise locations are there?
Per the 2026 FDD, Panchero's has 48 franchised units and 25 company-owned (73 in all). In the latest year, the number of franchised outlets fell by 2 (1 opened, 3 closed).
Is Panchero's a good franchise to buy?
FranchiseVerdict gives Panchero's a B Verdict grade (Second tier) with a verdict score of 55 out of 100 (higher is better), an editorial assessment, not investment advice. Helped by scale (48 franchised units, +25 company-owned: 73 in all), legal record and transparency. Held back by unit economics (avg gross sales $1.6M on a $1.2M investment midpoint, 1.4x: gross sales, not profit). The “Why a B” section on this page lists all six dimensions and any adjustment. Speak with current franchisees before making any investment decision.
Other Full-Service Restaurants franchises
Similar investment first, then by grade
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.