Barberitos
Barberitos franchises offer Southwestern cuisine including burritos, tacos, and salads in multiple locations. Known for casual dining with a southwestern twist, Barberitos operates in the quick-service restaurant sector.
About Barberitos
Barberitos is an American franchise restaurant chain of Mission burrito-inspired restaurants based in Athens, Georgia, United States. The company name is a portmanteau of founder Downing Barber's last name and burrito.
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Barberitos franchise FAQ
How much does it cost to open one — the total initial investment?
The total estimated initial investment to open the first BARBERITOS restaurant ranges from $436,000 to $815,360. This includes a development fee of $105,000 upon execution of the Development Agreement and other initial costs as detailed in Chart 7.A., excluding the initial franchise fee which is waived after payment of the development fee. [p.22, p.24]
What is the initial franchise fee?
The initial franchise fee is $35,000 [p.59]. This fee is non-refundable upon payment and covers administrative and other expenses incurred by the franchisor as well as their lost or deferred opportunity to franchise others [p.59].
What are the ongoing royalty and advertising fees?
The franchisee must pay ongoing royalties between 3.00% and 6.00% of net sales (or a minimum as defined) to the company [p.153, p.178]. Advertising service fees are recognized when related restaurant sales occur based on the application of the sales-based royalty exception within ASC 606 [p.179, p.154].
How long is the initial franchise agreement, and can I renew it?
The initial term of the franchise agreement is ten (10) years, commencing from the Effective Date [p.58]. Whether you can renew the agreement depends on Franchisor's discretion, as they may extend the initial term at their sole discretion without any obligation to do so, and such an extension must be memorialized in a writing signed by both parties [p.58].
Can I sell or transfer my franchise, and what does that require?
According to the FDD, you can sell or transfer your franchise, but it is subject to the franchisor's approval for good cause [p.5]. Additionally, a transfer fee equal to 50% of the current initial franchise fee may be required when transferring to an existing franchisee, or 75% when transferring to a new non-franchisee, unless certain conditions are met [p.15].
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement for good cause, which includes the failure of the franchisee to comply with any lawful provision of the franchise agreement and to cure such failure after being given written notice and a reasonable opportunity (no more than 30 days) to do so [p.5]. Additionally, if the franchise does not open within twelve months from the date the franchise agreement is signed, it can be terminated for cause [p.222]. This isn't specified in the excerpts for other grounds of termination by the franchisor.
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts. The FDD does not provide details on specific net worth or liquid capital requirements for qualifying as a franchisee.
Do I get an exclusive or protected territory?
You do not receive an exclusive territory [p.35]. However, you are provided with a protected territory for the approved location [p.35], and there is also an "exclusive 'Site Search Area'" where you must locate your site [p.29]. This isn't specified in the excerpts.
What training and ongoing support does the franchisor provide?
The franchisor provides an initial training program that lasts about 6 weeks, covering various aspects such as financial controls, food preparation, operational techniques, marketing, sanitation, and quality maintenance [p.74]. Additionally, prior to opening, the franchisor assists with required training at the restaurant site and sends a representative for up to 5 days of on-site assistance if it's the franchisee’s first BARBERITOS restaurant or more for subsequent locations under certain conditions [p.65]. Ongoing support includes guidelines, recommendations, and materials that can be accessed through their private internet site, though the franchisor reserves the right to provide additional on-site assistance upon request at the franchisee's expense [p.27, p.65].
How many franchised outlets are there, and how many have closed or been terminated?
As of September 29, 2024, there were 42 franchised outlets in operation. This information is specified on page [p.48].
Does the franchisor share any financial performance or earnings information?
Yes, the franchisor can provide financial performance information if there is a reasonable basis for it and if it includes actual records from existing outlets. However, they do not make any financial performance representations other than what may be included in Item 19 of the disclosure document, and they do not authorize their employees or representatives to make such representations either orally or in writing [p.48].
What am I restricted to selling, and where must I buy supplies?
You are restricted from operating a similar business during the term of the franchise and must purchase all inventory, equipment, fixtures, furnishings, product display units, signs, uniforms, supplies, and materials from designated or approved suppliers, or directly from the franchisor. This includes items like foodstuffs, beverages, or paper goods other than proprietary products [p.22]. Additionally, you may need to buy or lease certain items from the franchisor or a limited group of suppliers they designate, which might be more expensive than alternatives [p.3].