FranchiseVerdict
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A45/100FDD 2025

Taco Rico / Taco Works — Litigation & Risk

Food & Beverage - Full Service · FDD Items 3, 4 & 5

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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
45 / 100
FranchiseVerdict composite
Rating
STRONG
STRONG / MODERATE / CAUTION / AVOID

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
3 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
Florida
State whose law governs disputes — relevant if you're not based there

What drove the 45/100 rating

Risk Score Breakdown

  1. 01HIGHGoing Concern status is FALSE — indicates potential financial instability or operational uncertainty at franchisor level
  2. 02MEDSmall unit count (8 locations) with only 50% YoY growth suggests nascent/unproven system with limited track record
  3. 03MEDNo Item 19 financial performance representation disclosed — cannot independently verify claimed $1.56M avg revenue or $270K avg net income
  4. 04MINORHigh investment range ($154.8K–$340.8K) against small unit sample creates validation risk
  5. 05MINORRapid growth trajectory (50% YoY) may not be sustainable and could mask underlying operational or financial stress

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.