Tio Juan’s Margaritas Mexican Restaurant Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Margaritas Mexican Restaurant is a full-service franchise serving Mexican dishes and margaritas in a colorful, festive setting. Franchisees run the restaurants, managing the kitchen, bar, and dining service.
FranchiseVerdict summary · 2026
A Tio Juan’s Margaritas Mexican Restaurant franchise requires a total initial investment of $489K – $2.9M, including a $40K franchise fee and an ongoing 5.0% royalty[2]. Per the 2024 FDD, average unit revenue was $2.5M[2]. FranchiseVerdict grade: C (Average), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2024 FDD issuance
Overview
- Investment
- $489K – $2.9M
- 23rd pct Service Resta…
- Avg gross sales
- $2.5M
- 11th pct Service Resta…
- Royalty
- 5.0%
- 7th pct Service Resta…
- Units
- 25
- 22nd pct Service Resta…
- SBA charge-off
- N/A
Quick verdict · Full-Service Restaurants · color = vs category peers
Green = favorable by >10% vs Full-Service Restaurants avg · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- COSTTotal investment $489K – $2.9M including a $40K franchise fee, 5.0% ongoing royalty.
- RETURNSAverage unit revenue of $2.5M/year (median $2.7M).
- RISKVerdict C (Average), verdict score 45/100 (higher is better).
- DECLINESystem contracting at -14.3% CAGR over 3 years. Investigate whether closures are franchisor-driven (consolidation) or franchisee-driven (economics).
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Margaritas Franchising Corp.
- Parent company
- Margaritas Management Group, Inc.
- CEO title
- Chief Executive Officer
- Randall (Bob) Ray
- Incorporated in
- Delaware
- HQ
- 273 Locust Street, Suite 200, Dover, New Hampshire 03820
- Auditor
- CohnReznick LLP
- Audited financials
- Franchisor revenue
- $950K
- vs $1.0M prior year
Independent franchisee associations
- Franchise Advisory Council (FAC)
Franchisee-led councils or alliances disclosed in Item 20. Indicates operator voice.
Overview
About
- CEO
- Randall (Bob) Ray
- Headquarters
- NH
- Founded
- 2008
- FDD year
- 2024
- States available
- 3
Can you afford it, and what does the money buy?
Entry cost runs 47% above the typical full-service restaurants franchise.
Source: FDD 2024 · Items 5–7
FDD Item 7 · 2024 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $40K | $40K |
| Working capital (3–6 mo) | $150K | $150K |
| Equipment, build-out, other | $299K | $2.7M |
| Total initial investment | $489K | $2.9M |
Source: Tio Juan’s Margaritas Mexican Restaurant 2024 FDD, Items 5 and 7[2]. “Equipment, build-out, other” is computed as total minus disclosed line items above.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $489K – $2.9M
- Top 40% of category vs category
- Liquid capital req'd
- $150K – $150K
- Top 40% of category vs category
- Franchise fee
- $40K – $40K
- Top 40% of category vs category
- Royalty
- 5.0%
- weekly Gross Sales · typical 6–8%
- Ad fund
- 4.0%
- typical 3–5%
- Total fee load
- 9.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 5.0% of gross sales |
| Marketing / ad fund | 4.0% of gross sales |
| Transfer fee | $10K |
| Inventory (initial) | $21K – $43K |
| Total fee load | 9.0% of rev |
What do units actually make?
Average unit sales run 42% above the full-service restaurants norm.
Source: FDD 2024 · Item 19
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
$222K
9.0% margin
Unlevered ROIC
12%
EBITDA / total invested capital
Payback
8.4 yrs
cash-on-cash, unlevered
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
What one unit earns on your invested capital
Model A · Single-Unit Return
Computes unlevered return on invested capital (ROIC) for a single franchise unit. The target band for an attractive franchise is 30–60% ROIC. Below that and a passive index fund likely outperforms; above that and the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses. It's the top line only. Operating costs below are category estimates. Override them to match your real lease quote, labor market, and build-out budget.
Returns model · single-unit ROIC
What would one Tio Juan’s Margaritas Mexican Restaurant unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
12%
Below the 30–60% attractive-franchise band
What 25 units return when you use SBA financing
Model B · Return on Equity: Debt-Financed Acquisition
Models a 25-unit portfolio acquisition financed with an SBA 7(a) loan. Shows equity IRR (your return on cash invested), DSCR (how safely the cash flow covers debt service), and the capital stack (SBA + seller + equity breakdown).
This is the “search fund” or “entrepreneurship through acquisition” scenario: you buy an existing multi-unit operator, use leverage to amplify returns, and either operate or hire management. The 25-unit size is the typical minimum for an SBA-backed franchise portfolio acquisition to pencil as a full-time income.
What “return on equity” means here: if you put in $500K of your own cash and the business generates enough EBITDA to pay down debt and grow, your equity IRR is the annual return on that $500K, including the value created when you eventually sell. Target IRR for a search fund is typically 25–35%.
Levered LBO scenario · Yale Crease Capital framing
What would 25 Tio Juan’s Margaritas Mexican Restaurant units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$987K
on $4.9M purchase
Total debt
$3.9M
SBA $2.5M + senior + seller note
These models are for research and scenario planning only. Not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.
Item 19 · Source: 2024 FDD
Financial Performance
- Avg gross sales
- $2.5M
- Per unit, per year
- Median gross sales
- $2.7M
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- Historical Financial Performance
- Sample size
- 6 outlets
- vs category median 18 · small
- Range (low → high)
- $719K→$4.1M
- Cohort dispersion (min → max)
- Transparency tier
- full
- Categorical assessment of disclosure depth
- Reporting year
- 2023
- Fiscal year the figures cover
- Source filing
- FDD 2024
- Disclosed in the 2024 filing, covering 2023
- Transparency
- 9 / 10
- vs category median 3 / 10 · above
Compared against 805 Full-Service Restaurants brands
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Unit economics
Average unit generates $2.5M/year in gross sales. Median ($2.7M) exceeds the average — distribution is bottom-heavy but most units perform well. Revenue-to-investment ratio: 1.4x.
Fee burden
Total ongoing fee load of 9.0% — above the Full-Service Restaurants average of 7.6%.
Disclosure
Transparency score 9/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence.
Operator retention
System contracting at -14.3% CAGR over 3 years. Investigate whether closures are franchisor-driven consolidation or franchisee exits.
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Full-Service Restaurants averages
How Tio Juan’s Margaritas Mexican Restaurant Compares
Is the system healthy?
Source: FDD 2024 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 25
- Opened
- 0
- Last reporting year
- Closed
- 1
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 16.7%
- Company-owned
- 19
- Corporate units in the system
- % franchised
- 24%
- vs corporate-owned
- Net growth (3-yr)
- -14.3%
- Net unit change over 3 years
- 3-yr CAGR
- -14.3%
- Compounded over last 3 years
3-year detail · Item 20
- Opened (3yr)
- 0
- Closed (3yr)
- 1
- Terminated (3yr)
- 0
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 0
- Reacquired (3yr)
- 0
- Franchisor bought back
- Continuity rate
- 85.7%
- Units that stayed open
- Ceased ops
- 14.3%
- Units that stopped operating
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 3 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 contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
Available to sell in · Item 12
- Michigan
States where the franchisor is registered to sell new franchises (FDD registration filings).
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA loan disclosures. This brand has only 5 7(a) loans on file; statistical reliability is limited below 10 loans.
- Total loans
- 5
- Loan volume
- $6.8M
- Median loan
- $1.4M
- average
- Charge-off rate
- N/A
- limited sample (5 loans) — rate not shown below 10
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- N/A
- 5-yr charge-off
- N/A
- Loans approved 2021+
- Active lenders
- 4
- Defaults
- N/A
Explore lender portfolios on Bank Reports or regional data on State Reports.
What could kill this investment?
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
Risk & Legal
Clean FDD: no litigation, no bankruptcy, no going-concern, audited financials, and Item 19 disclosed with strong AUV of $2,467,588. The only minor note is negative net unit growth (-14.3%), largely a mature, company-heavy system (19 of 25 company-owned).
Litigation (Item 3)
0 case reference(s): 0 pending, 0 settled.
Largest disclosed settlement: $85,000
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · CohnReznick LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Must buy proprietary products: No
- Restricted to system-approved products: No
Score breakdown · what drove the 45 / 100 verdict
- 01MINORNo litigation, no bankruptcy, no going-concern
- 02MEDAudited financials, Item 19 disclosed
- 03MINORStrong AUV $2,467,588
- 04MINORNet growth -14.3% (mild)
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 9.0% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2024 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 5 years |
| Allowed renewalsℹ | 2 |
| Protected territory | No |
| Online sales rightsℹ | Granted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 2 years |
| Right of first refusalℹ | Yes |
| Termination notice | 15 days |
| Termination groundsℹ | 3 |
| Curable defaultsℹ | 9 |
| Mandatory arbitration | No |
| Jury trial waiver | Yes |
| Governing law | New Hampshire |
| Litigation count | 0 |
View Item 3 litigation summary
0 case reference(s): 0 pending, 0 settled.
Items 10, 11
Training & Operations
- Classroom training
- 110 hrs
- On-the-job training
- 340 hrs
- Training location
- Corporate facility and on-site
- Site selection
- joint
- POS system
- Toast
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Toast
Item 20 · call current owners
Franchisee Contacts
5 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Tio Juan’s Margaritas Mexican Restaurant · FDD (2024) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Tio Juan’s Margaritas Mexican Restaurant franchise?
The total investment to open a Tio Juan’s Margaritas Mexican Restaurant franchise ranges from $489K – $2.9M, with an initial franchise fee of $40K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Tio Juan’s Margaritas Mexican Restaurant franchise owners earn?
According to Item 19 of the Tio Juan’s Margaritas Mexican Restaurant FDD, the average gross sales per unit is $2.5M. The median is $2.7M. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Item 19 in the Tio Juan’s Margaritas Mexican Restaurant FDD?
The FDD section where a franchisor may disclose financial performance of its outlets. Disclosure is optional and formats vary; figures are typically gross sales, which is revenue before expenses, not profit. FranchiseVerdict extracts these figures directly from the Tio Juan’s Margaritas Mexican Restaurant FDD and qualifies whose outlets they describe.
What is Tio Juan’s Margaritas Mexican Restaurant's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Tio Juan’s Margaritas Mexican Restaurant (fewer than 10 loans on file). Charge-off rates are one way to gauge franchise risk, but not all franchise loans go through the SBA program. We recommend reviewing turnover and closure data in the FDD and speaking with current franchisees.
How many Tio Juan’s Margaritas Mexican Restaurant franchise locations are there?
As of their most recent FDD filing, Tio Juan’s Margaritas Mexican Restaurant has 25 total units in the United States, including 6 franchised units and 19 company-owned units.
Is Tio Juan’s Margaritas Mexican Restaurant a good franchise to buy?
FranchiseVerdict rates Tio Juan’s Margaritas Mexican Restaurant as a C-grade franchise with a verdict score of 45 out of 100 (higher is better), 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.
For franchisors
Are you the franchisor?
If you represent Tio Juan’s Margaritas Mexican Restaurant, you can request corrections or provide updated information.
Other Full-Service Restaurants franchises
Compare similar franchise opportunities in the Full-Service Restaurants category
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.