Bottom line
- Total investment $437K – $2.1M including a $25K franchise fee, 5.0% ongoing royalty.
- Average unit revenue of $1.2M/year (median $1.2M).
- Rated STRONG with a risk score of 46/100. SBA loan default rate of 0.0% across 101 loans (below the industry average).
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 Taco John's unit return on the cash you put in?
Unlevered ROIC · per unit
12%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Taco John's units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$1.5M
on $7.4M purchase
Total debt
$5.9M
SBA $3.7M + senior + seller note
Overview
About
Franchisees operate quick-service Mexican food restaurants serving tacos, burritos, and specialty items. Day-to-day operations include food preparation, customer service, inventory management, staff scheduling, and local marketing within a protected territory. Franchisees manage 20-80+ employees depending on location and format.
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 · 11 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
Taco John's presents moderate-to-cautious risk due to declining unit economics, undisclosed profitability data, and a contracting franchise system without transparent financial performance metrics.
Score breakdown · what drove the 46 / 100 rating
- 01MINORDeclining unit count (-1.1% YoY) suggests system contraction and potential market saturation or franchisee dissatisfaction
- 02MEDNet Income not disclosed in Item 19 — cannot validate actual profitability claims or ROI against $437k-$2.08M investment range
- 03MINORWide investment range ($1.64M spread) indicates inconsistent unit economics or unclear cost structure for prospective franchisees
- 04HIGHNo going concern statement is a minor positive, but combined with declining units raises questions about long-term brand viability
- 05MINORAvg revenue of $1.23M is modest for QSR; at 5% royalty this yields only ~$61.7k in gross royalties per unit, suggesting thin margins for franchisees
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
98 numbers
One-time purchase · CSV download · Validation questions included