Tio Juan’s Margaritas Mexican RestaurantFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
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 $2.4M[2]. Verdict grade: A. Run a live ROI scan →
Data last verified June 18, 2026 · figures per the 2024 FDD issuance
Overview
- Investment
- $489K – $2.9M
- 32nd pct Service Resta…
- Avg gross sales
- $2.4M
- 23rd pct Service Resta…
- Royalty
- 5.0%
- 7th pct Service Resta…
- Units
- 25
- 30th pct Service Resta…
- SBA default
- N/A
Quick verdict · Full-Service Restaurants · color = vs category peers
Green = >15% above Full-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
Franchised units fell from 7 to 6 over 3 years. Investigate why operators are leaving.
30% cash-on-cash return (based on EBITDAR). Above the 20% threshold most investors target.
Bottom line
- Total investment $489K – $2.9M including a $40K franchise fee, 5.0% ongoing royalty.
- Average unit revenue of $2.4M/year (median $1.9M), with an estimated 30% cash-on-cash return (based on EBITDAR).
- Verdict A (Top Quintile) with a risk score of 51/100.
- System 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
- Legal entity
- Margaritas Franchising Corp.
- Incorporated in
- DE
- HQ
- 273 Locust Street, Suite 200, Dover, NH 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
Franchisees operate full-service Mexican restaurants featuring margaritas, table service dining, and kitchen management. Day-to-day responsibilities include staff management (typically 15-25 employees), food cost control, inventory management, customer service oversight, and local marketing compliance with corporate brand standards across a capital-intensive 2,000-4,000 sq ft location.
- CEO
- Randall (Bob) Ray
- Headquarters
- NH
- Founded
- 1984
- FDD year
- 2024
- States available
- 3
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.
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
$213K
9.0% margin
Unlevered ROIC
11%
EBITDA / total invested capital
Payback
8.7 yrs
cash-on-cash, unlevered
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $489K – $2.9M
- Better than avg vs category
- Liquid capital req'd
- $150K – $150K
- Near category avg vs category
- Franchise fee
- $40K – $40K
- Better than avg 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
- Payback period
- 3.3 yrs
- From FDD / Item 19
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 |
Financial Performance
- Avg gross sales
- $2.4M
- Per unit, per year
- Median gross sales
- $1.9M
- Avg ebitdar
- $515K
- Reported as EBITDAR in FDD Item 19
- Cash-on-cash
- 30.1%
- Based on EBITDAR / investment midpoint
- Item 19 type
- Historical Financial Performance
- Sample size
- 18 units
- vs category median 13
- Range (low → high)
- $1.8M→$2.8M
- Cohort dispersion (min → max)
- Transparency tier
- full
- Categorical assessment of disclosure depth
- Transparency
- 10 / 5
- vs category median 4 / 5 · above
Compared against 1264 Full-Service Restaurants brands
vs Full-Service Restaurants averages
How Tio Juan’s Margaritas Mexican Restaurant Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 25
- Opened
- 0
- Last reporting year
- Closed
- 1
- Turnover rate
- 4.0%
- Company-owned
- 19
- Corporate units in the system
- % franchised
- 24%
- vs corporate-owned
- Net growth (yr3)
- -14.3%
- Net unit change last year
- 3-yr CAGR
- -14.3%
- Compounded over last 3 years
3-year detail · Item 20
- Closed (3yr)
- 0
- 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 · 4 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
- N/A
- Amount data pending
- Median loan
- N/A
- Charge-off rate
- N/A
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
- 0
- Defaults
- 0
Explore lender portfolios on Bank Reports or regional data on State Reports.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
This contracting Mexican restaurant franchise shows critical warning signs including shrinking unit base, absence of territory protection, undisclosed going concern status, and unverified profitability claims—warranting extreme caution.
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 51 / 100 rating
- 01MEDUnit count declined 14.3% YoY (25 units) indicating system contraction and franchisee struggles
- 02MINORNo protected territory creates direct competition risk and cannibalization between locations
- 03MINORHigh initial investment range ($488K-$2.9M) with 5% royalty burden on thin restaurant margins (~22% net margin)
- 04HIGHGoing Concern status is FALSE — suggests corporate financial instability or disclosure issues
- 05MINORNo Item 19 financial performance representation limits ability to validate the $515K average net income claim
- 06MINORWide investment spread ($2.4M variance) indicates inconsistent unit economics and unclear capital requirements
- 07MINORRelatively low franchise fee ($40K) may indicate undervalued system or inability to attract quality franchisees
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 | 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
8 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 $2.4M. The median is $1.9M. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
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 7 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 A-grade franchise with a risk score of 51 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.