TacoTimeFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
FranchiseVerdict summary · 2026
A TacoTime franchise requires a total initial investment of $156K – $824K, including a $30K franchise fee. Per the 2025 FDD, average unit revenue was $860K[2]. SBA 7(a) loans show a 31.2% charge-off rate across 89 loans[1]. Verdict grade: C. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2025 FDD issuance
Overview
- Investment
- $156K – $824K
- 20th pct Service Resta…
- Avg gross sales
- $860K
- 28th pct Service Resta…
- Royalty
- N/A
- Units
- 99
- 74th pct Service Resta…
- SBA default
- 31.2%
- system-wide median varies by category
Quick verdict · Quick-Service Restaurants · color = vs category peers
Green = >15% above Quick-Service Restaurants avg · No shading = within ±15% · Red = >15% below avg · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
31.2% of SBA loans charged off across 89 loans, above the 16% franchise average.
Franchising since 1961. Systems this mature have refined operations and brand recognition.
20 legal cases disclosed in the FDD. Read Item 3 before signing.
Bottom line
- Total investment $156K – $824K including a $30K franchise fee.
- Average unit revenue of $860K/year (median $825K).
- Verdict C (Average) with a risk score of 68/100. SBA loan charge-off rate of 31.2% across 89 loans (well above the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2024).
- 20 litigation matters disclosed in Item 3, higher than typical. Review the summary for patterns (franchisor-initiated vs. franchisee-initiated).
Item 1 · who you're contracting with
The Franchisor
- Legal entity
- Kahala Franchising, L.L.C.
- Parent company
- MTY Food Group, Inc.
- CEO title
- Chief Executive Officer
- Eric Lefebvre
- CEO experience
- 2018 yrs
- Years in role or industry
- Incorporated in
- AZ
- HQ
- 9311 E. Via De Ventura, Scottsdale, Arizona 85258
- Auditor
- PricewaterhouseCoopers LLP
- Audited financials
- Franchisor revenue
- $606.6M
- vs $597.5M prior year
- Management churn noted
- Frequent turnover
- Item 2 disclosed frequent executive changes
Overview
About
TacoTime franchisees operate quick-service Mexican food restaurants, managing daily operations including food preparation, customer service, inventory management, and staff oversight. They handle POS systems, maintain brand standards, and manage local marketing while paying royalties based on gross sales or a weekly minimum fee to the franchisor.
- CEO
- Eric Lefebvre
- Headquarters
- AZ
- Founded
- 1960
- FDD year
- 2025
- States available
- 10
FDD Item 7 · 2025 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $30K | $30K |
| Working capital (3–6 mo) | $5K | $20K |
| Equipment, build-out, other | $121K | $774K |
| Total initial investment | $156K | $824K |
Source: TacoTime 2025 FDD, Items 5 and 7[2]. “Equipment, build-out, other” is computed as total minus disclosed line items above.
Single-unit · estimated
Returns at a glance
Indicative numbers using FDD Item 7 / Item 19 inputs and category-benchmarked cost ratios. Full single-unit, 25-unit portfolio, and LBO models (with every input editable to stress-test your own scenario) live on the financials page.
Store EBITDA · annual
$103K
12.0% margin
Unlevered ROIC
21%
EBITDA / total invested capital
Payback
4.9 yrs
cash-on-cash, unlevered
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $156K – $824K
- Better than avg vs category
- Liquid capital req'd
- $5K – $20K
- Better than avg vs category
- Franchise fee
- $8K – $30K
- Better than avg vs category
- Royalty
- greater of 6% of Gross Sales or $400 per week
- Ad fund
- 4.0%
- typical 3–5%
- Total fee load
- 10.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty (flat) | greater of 6% of total weekly Gross Sales or $400 per week |
| Marketing / ad fund | 4.0% of gross sales |
| Training fee | $2K |
| Transfer fee | $8K |
| Renewal fee | $15K |
| Total fee load | 10.0% of rev |
Financial Performance
- Avg gross sales
- $860K
- Per unit, per year
- Median gross sales
- $825K
- Item 19 type
- gross_sales
- Sample size
- 94 units
- vs category median 28 · large
- Quartile band
- $442K→$1.6M
- Bottom 25% → top 25%
- Reporting year
- 2024
- Fiscal year the figures cover
- Transparency
- 4 / 5
- vs category median 4 / 5 · typical
Compared against 453 Quick-Service Restaurants brands
vs Quick-Service Restaurants averages
How TacoTime Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 99
- Opened
- 0
- Last reporting year
- Closed
- 2
- Terminated
- 1
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 1
- Term expired, not renewed (per Item 20)
- Turnover rate
- 2.0%
- Company-owned
- 2
- Corporate units in the system
- % franchised
- 98%
- vs corporate-owned
- Net growth (yr3)
- -2.0%
- Net unit change last year
- 3-yr CAGR
- -7.6%
- Compounded over last 3 years
3-year detail · Item 20
- Transfers (3yr)
- 5
- Projected new
- 1
- Franchisor's next-year forecast
- Transfer rate
- 5.1%
- Owners selling to other franchisees
- Termination rate
- 2.0%
- Franchisor-initiated terminations
- Ceased ops
- 1.0%
- Units that stopped operating
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 12 · 10 states reported
The Territory Map
FDD Item 12 reports the state count, but the specific list isn't in our current data. The map will appear once we re-extract from the FDD or enough franchisee contacts are available.
10
states with franchisees (per FDD Item 12)
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 89
- Loan volume
- $27.6M
- Median loan
- $365K
- 50th percentile
- Charge-off rate
- 31.2%
- rates vary by category · see methodology
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- 100.0%
- 5-yr charge-off
- 0.0%
- Loans approved 2021+
- Active lenders
- 29
- Defaults
- 20
Vintage analysis
TacoTime charge-off rate by loan vintage
Explore lender portfolios on Bank Reports or regional data on State Reports.
Premium insight
SBA Lending Report
Deep-dive into TacoTime's SBA lending history: lender network, geographic footprint, interest rates, and more.
SBA Lending Report
- Principal loss rate and NAICS industry benchmark
- 5 lenders with concentration factor
- Per-state charge-off rates across 3 states
- Startup risk premium and job creation velocity
- 5-year lending trend
- SBA 504 real estate/equipment data
Instant access. No subscription.
A 31.2% charge-off rate means roughly 1 in 3 franchisees failed to repay their SBA loan. Investigate what changed.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
TacoTime presents high investment risk with a contracting franchise system, unresolved litigation history, undisclosed profitability metrics, and an aggressive royalty floor that may exceed cash flow on underperforming units.
Litigation (Item 3)
Two concluded litigation matters disclosed: (1) Purav Enterprises, L.L.C., Balwant Bahia, and Paramjit Samra v. The Extreme Pita Franchising USA, Inc., EP Development, Inc., and Feisal Ramjee (Washington Superior Court, Case No. 15-2-15120-7) - franchisees alleged FIPA violations and misrepresentation; settled March 11, 2016 for $20,000; dismissed March 16, 2016. (2) KOHO, Inc. v. Kahala Franchising, L.L.C. (California Superior Court, Los Angeles County, Case No. BC572565) - area representative sued for breach of contract and unjust enrichment; Kahala cross-complained; court granted judgment for Kahala; awarded Kahala $205,000 in attorney's fees; settled June 19, 2017 with Kahala repurchasing territory for $75,000 and forgiving $130,000 in remaining damages.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · PricewaterhouseCoopers LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: No
- Kickbacks from required suppliers: No
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 68 / 100 rating
- 01MINORDeclining unit count (99 units, -2.0% YoY) indicates system contraction and weakening franchisee demand
- 02HIGHMultiple concluded litigations involving breach of contract and misrepresentation suggest franchisor credibility and operational integrity issues
- 03MINORNo average net income disclosure prevents assessment of actual profitability despite $860K average revenue
- 04MINORUnprotected territory creates cannibalization risk and franchisee competition within same market
- 05MEDDual royalty structure (6% or $400/week minimum) heavily burdens lower-revenue locations and provides limited upside protection
- 06HIGHGoing Concern flag is FALSE but litigation history raises questions about financial stability and long-term viability
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 5 years |
| Allowed renewalsℹ | 1 |
| Protected territory | No |
| Exclusive territoryℹ | No |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 10 mi |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 90 days |
| Mandatory arbitration | Yes |
| Arbitration location | county and state where the Franchised Business is located |
| Jury trial waiver | Yes |
| Governing law | Arizona |
| Litigation count | 20 |
View Item 3 litigation summary
Two concluded litigation matters disclosed: (1) Purav Enterprises, L.L.C., Balwant Bahia, and Paramjit Samra v. The Extreme Pita Franchising USA, Inc., EP Development, Inc., and Feisal Ramjee (Washington Superior Court, Case No. 15-2-15120-7) - franchisees alleged FIPA violations and misrepresentation; settled March 11, 2016 for $20,000; dismissed March 16, 2016. (2) KOHO, Inc. v. Kahala Franchising, L.L.C. (California Superior Court, Los Angeles County, Case No. BC572565) - area representative sued for breach of contract and unjust enrichment; Kahala cross-complained; court granted judgment for Kahala; awarded Kahala $205,000 in attorney's fees; settled June 19, 2017 with Kahala repurchasing territory for $75,000 and forgiving $130,000 in remaining damages.
Items 10, 11
Training & Operations
- Classroom training
- 40 hrs
- On-the-job training
- 120 hrs
- Training location
- Online. KTEC (Kahala Training & Education Center) in Scottsdale
- Time to open
- 9 mo
- From signing to launch
Items 5 & 11
Franchisor Support
Item 20 · call current owners
Franchisee Contacts
3 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
TacoTime · FDD (2025) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a TacoTime franchise?
The total investment to open a TacoTime franchise ranges from $156K – $824K, with an initial franchise fee of $30K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do TacoTime franchise owners earn?
According to Item 19 of the TacoTime FDD, the average gross sales per unit is $860K. The median is $825K. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is TacoTime's franchise failure rate?
Based on SBA 7(a) loan data, TacoTime has a charge-off rate of 31.2% across 89 loans, meaning 31.2% of franchise loans were charged off. Charge-off rates are one proxy for franchise risk, though they do not capture all closures. This data comes from FOIA-sourced SBA lending records.
How many TacoTime franchise locations are there?
As of their most recent FDD filing, TacoTime has 99 total units in the United States, including 97 franchised units and 2 company-owned units.
Is TacoTime a good franchise to buy?
FranchiseVerdict rates TacoTime as a C-grade franchise with a risk score of 68 out of 100, based on our analysis of investment costs, revenue data, SBA loan performance, and growth trends. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). 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.