Bottom line
- Total investment $528K – $1.1M including a $30K franchise fee, 5.0% ongoing royalty.
- Average unit revenue of $1.1M/year (median $601K).
- Rated STRONG with a risk score of 52/100. SBA loan default rate of 0.0% across 2 loans (below the industry average).
- Emerging franchise — only 3 years of franchising with 37 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 Rusty Taco unit return on the cash you put in?
Unlevered ROIC · per unit
20%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Rusty Taco units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$1.9M
on $9.6M purchase
Total debt
$7.7M
SBA $4.8M + senior + seller note
Overview
About
Franchisees operate fast-casual taco restaurants, managing daily kitchen operations, customer service, inventory, and staff while leveraging Rusty Taco's brand, menu systems, and operational standards. Day-to-day activities include food preparation, point-of-sale management, staffing, and local marketing within their protected territory.
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 · 26 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.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Rusty Taco presents moderate-to-cautious risk: undisclosed profitability metrics, franchisor financial concerns, and sluggish unit growth obscure true franchisee ROI potential.
Score breakdown · what drove the 52 / 100 rating
- 01MINORNo net income disclosure (Item 19) prevents ROI validation despite $1.07M average revenue
- 02HIGHGoing Concern status is False, indicating potential financial instability at franchisor level
- 03MEDSlow unit growth of 9.1% YoY with only 37 total units suggests limited market traction or franchisee satisfaction
- 04MEDWide investment range ($528K-$1.13M) with no disclosed net income makes break-even timeline unpredictable
- 05MINOR5% royalty on $1.07M average revenue = $53,350 annual franchisor income per unit may be insufficient to support system
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
61 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Rusty Taco · FDD (2025) PDF