FranchiseVerdict
TacoTime logo
B66/100FDD 2025

TacoTime — Litigation & Risk

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

Back to overview

Elevated Risk

20 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
20
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
66 / 100
FranchiseVerdict composite
Rating
MODERATE
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
9
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted
Total loan volume
$3.7M
Avg loan size
$408K
Participating lenders
5

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

What drove the 66/100 rating

Risk Score Breakdown

  1. 01MINORDeclining unit count (99 units, -2.0% YoY) indicates system contraction and weakening franchisee demand
  2. 02HIGHMultiple concluded litigations involving breach of contract and misrepresentation suggest franchisor credibility and operational integrity issues
  3. 03MINORNo average net income disclosure prevents assessment of actual profitability despite $860K average revenue
  4. 04MINORUnprotected territory creates cannibalization risk and franchisee competition within same market
  5. 05MEDDual royalty structure (6% or $400/week minimum) heavily burdens lower-revenue locations and provides limited upside protection
  6. 06HIGHGoing Concern flag is FALSE but litigation history raises questions about financial stability and long-term viability

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.