F87/100FDD 2025
Taco Del Mar — Litigation & Risk
Food & Beverage - Quick Service · FDD Items 3, 4 & 5
Lower Risk
No litigation cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
0
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
87 / 100
FranchiseVerdict composite
Rating
AVOID
STRONG / MODERATE / CAUTION / AVOID
7(a) FOIA data · FY2020–present
SBA Loan Performance
Aggregated from public SBA 7(a) loan disclosures. Default rate is the share of loans that were charged off or settled for less than the full balance.
Total 7(a) loans
85
Government-backed loans issued
Default rate
41.7%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
35 loans
Loans charged off or defaulted
Total loan volume
$13.1M
Avg loan size
$154K
Participating lenders
31
FDD Items 5, 6 & 17 — what you give up
Contract Risk Indicators
Mandatory arbitration
Required
Disputes resolved outside court — limits your legal options
Jury trial waiver
Waived
You give up the right to a jury trial
Non-compete
2 yrs
Post-termination restriction on similar businesses
Franchisor can compete
Yes
Franchisor can open competing locations in or near your territory
Right of first refusal
Yes
Franchisor can match any purchase offer when you try to sell
Governing law
Colorado
State whose law governs disputes — relevant if you're not based there
What drove the 87/100 rating
Risk Score Breakdown
- 01MINORSystem declining rapidly: 40 units with 13% YoY contraction signals franchise model distress
- 02MINORNo Item 19 financial disclosure: Cannot validate revenue/profitability claims, making ROI completely opaque
- 03MINORHigh investment-to-unit ratio: $205k-$596k for a system with only 40 remaining locations raises sustainability questions
- 04HIGHGoing concern indicator absent: Franchisor does not affirm financial stability, suggesting possible liquidity or solvency stress
- 05MINORMinimal franchise fee ($5,000) may indicate low barrier to entry that didn't prevent attrition, or desperation to recruit
Severity inferred from FDD text — not a regulatory or legal classification
Litigation data from FDD Items 3, 4, and 5. SBA data from public 7(a) FOIA records (FY2020–present). Not legal advice — consult a franchise attorney before signing any franchise agreement.