Tio Juan’s Margaritas Mexican Restaurant
Formerly known as Maryland Fried Chicken
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). Estimated payback in 3.3 years.
- Rated CAUTION with a risk score of 72/100. SBA loan default rate of 0.0% across 5 loans (below the industry average).
- 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
Yale framework · single-unit ROIC
Returns Analysis
Pulls Item 7 (investment) and Item 19 (revenue) from this brand's FDD into the Yale unlevered-ROIC formula. Override any input to stress-test it against your own assumptions.
The model · Yale framework
What would one Tio Juan’s Margaritas Mexican Restaurant unit return on the cash you put in?
Unlevered ROIC · per unit
18%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Tio Juan’s Margaritas Mexican Restaurant units return on equity?
Equity IRR · 5-yr
32.3%
4.05× MOIC
Year-1 DSCR
2.50×
EBITDA ÷ debt service
Equity required
$6.6M
on $16.6M purchase
Total debt
$10.0M
SBA $5.0M + senior + seller note
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.
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
Item 20 · unit dynamics
The Growth Chart
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 phone area codes (Item 20). Approximate — ported numbers may show the original state, not the franchisee's current location.
Government records
SBA Loan Data
Aggregated from SBA 7(a) loan disclosures, public data unique to FranchiseVerdict.
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.
Score breakdown · what drove the 72 / 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
Item 11
Training & Operations
Item 20
Franchisee Contacts
Phone numbers extracted directly from this brand's FDD Item 20. After purchase, you'll also receive a list of validation questions tailored to this brand.
Franchisee contacts
8 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Tio Juan’s Margaritas Mexican Restaurant · FDD (2024) PDF