California Tortilla
California Tortilla offers quick-service, fast-casual restaurants specializing in burritos, tacos, and salads. Known for its California-Mexican cuisine, it operates in the casual dining restaurant sector.
About California Tortilla
California Tortilla, also known as Cal Tort, is an American chain of franchised fast casual Mexican-style restaurants, the first of which was opened in August 1995 in Bethesda, Maryland by business partners Pam Felix and Alan Cohen. The chain's menu is comparable to that of its competitors, such as Baja Fresh and Chipotle Mexican Grill. A typical restaurant has 2,500 square feet (230 m2) with seating for 75 people. California Tortilla was voted by readers of Washingtonian magazine as having the best burritos in both 2009 and 2010, and "best Mexican" in 2014 and 2015. In 2019, it was awarded Best Fast Casual by Washington City Paper readers.
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California Tortilla franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operations of a franchised California Tortilla Restaurant ranges from $443,700 to $836,500. This includes a mandatory payment of $40,000 to $125,000 to the franchisor or affiliate for Development Fees and an additional $10,000 that may be paid for Grand Opening Advertising Fees [p.1].
What is the initial franchise fee?
The initial franchise fee is $40,000 and must be paid when the Franchise Agreement is signed [p.13]. This fee is non-refundable and covers administrative and other expenses incurred by the company in granting the franchise [p.203]. However, if you sign an Area Development Agreement and pay a Development Fee, the initial franchise fee for each Restaurant developed under that agreement can be less than $40,000 [p.14].
What are the ongoing royalty and advertising fees?
The franchisee will pay a continuing royalty fee of 5% of Net Sales on a weekly basis. This fee is based on the Net Sales reported by the franchisee for the prior week [p.80]. Advertising fees are not specified in these excerpts, but they may be included in additional terms that could differ from this agreement [p.77].
How long is the initial franchise agreement, and can I renew it?
The initial franchise fee is generally recognized over a franchise term of 10 years [p.203], but this isn't specified in the excerpts regarding the length or renewal process of the initial franchise agreement itself. Therefore, based on the provided information, we cannot determine the exact duration of the initial franchise agreement or its renewal terms.
Can I sell or transfer my franchise, and what does that require?
Yes, you can sell or transfer your franchise, but it requires approval from California Tortilla. The transfer must be accompanied by a transfer of all franchise agreements and rights to the restaurants operated under the franchise. Additionally, you need to pay a non-refundable transfer fee, which is one-half of the current Initial Franchise Fee for new franchisees if the transfer results in a change in control. If the transfer is not consummated or closed (except if disapproved by California Tortilla), you must reimburse them for all costs and expenses incurred, including legal, accounting, training, and other related fees [p.112].
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement on any grounds available by law [p.225]. Additionally, according to the Virginia Retail Franchising Act, a franchisor cannot cancel a franchise without reasonable cause [p.234], and termination provisions must comply with the act's definition of 'reasonable cause' [p.226]. The agreement also permits termination if there is a failure to comply with lawful provisions and such failure is not cured within 30 days after written notice [p.5(c)].
What financial requirements — net worth and liquid capital — do I need to qualify?
The franchisee must demonstrate minimal operating and working capital based on their financial statements, assets, application for the franchise, previously communicated minimum net worth and working capital standards, and the specific situation applicable to the restaurant [p.83]. However, exact net worth and liquid capital requirements are not specified in these excerpts.
Do I get an exclusive or protected territory?
You do receive a protected territory, but it is not exclusive [p.43, p.45]. The protection is limited, and you may face competition from other franchisees, outlets owned by the company, or other channels of distribution or competitive brands that the company controls [p.44, p.46].
What training and ongoing support does the franchisor provide?
The franchisor provides an extensive training program conducted under the supervision of their Franchise Support Team, including individuals like Mike Dolinger and Robert Krupenie. Initial training is mandatory and must be completed at the franchisor's headquarters or a designated affiliate-owned restaurant. Ongoing support includes potential additional training sessions, though these come with associated costs if more than three highly trained personnel are involved. [p.36, p.19]
How many franchised outlets are there, and how many have closed or been terminated?
As of December 31, 2024, there were thirty-four franchised outlets in operation [p.207]. This isn't specified in the excerpts regarding how many franchised outlets have closed or been terminated.
Does the franchisor share any financial performance or earnings information?
The franchisor may provide actual records of an existing outlet if purchased. Otherwise, they do not make financial performance representations and do not authorize their employees to make such representations [p.65]. However, they are permitted to disclose historic financial performance representations about the franchise system's existing outlets or a forecast of the prospective franchisee's future financial performance under certain conditions [p.64].
What am I restricted to selling, and where must I buy supplies?
You are restricted to selling products and services that conform to the franchisor's standards and specifications [p.52], and you must buy all required items from suppliers approved by the franchisor [p.25]. This includes both products and ingredients used in the Restaurant, as well as other supplies [p.25].