Capital Tacos
Capital Tacos offers fun, fast-casual Tex-Mex cuisine from brick-and-mortar restaurants, mobile trailers, or static trailers at events. Known for unique flavors and quality ingredients, it operates in the casual dining segment of the restaurant industry.
Capital Tacos franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation of a single Capital Tacos® franchise business ranges from $129,330 to $427,500. This amount includes the initial franchise fee of $49,000 [p.14].
What is the initial franchise fee?
The initial franchise fee for a single unit franchise is $49,000. For a 3-unit flex pack, the combined initial franchise fees are $110,000, and for a 5-unit empire builder, the combined initial franchise fees are $175,000 (with at least 3 of those units being traditional brick and mortar locations). [p.83], [p.14]
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is a non-refundable, weekly payment as specified in Exhibit 'A-3' [p.83]. Advertising fees are paid into an advertising fund that we may use for marketing programs as we choose; these fees can be increased to 3% of gross sales upon 60 days' notice [p.21, p.22].
How long is the initial franchise agreement, and can I renew it?
The initial duration of the franchise agreement and renewal conditions are not specified in these excerpts.
Can I sell or transfer my franchise, and what does that require?
The franchisor can refuse to permit the transfer of ownership of a franchise except for good cause, which includes but is not limited to unspecified factors. This provision also allows the franchisor to exercise a right of first refusal to purchase the franchise. [p.7]
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the franchise agreement for good cause, which includes the failure of the franchisee to comply with any lawful provision of the franchise agreement and failing to cure such failure after being given written notice and a reasonable opportunity, not exceeding 30 days, to do so [p.6]. Additionally, if any Franchise Agreement for one of Your franchises is terminated for cause, the franchisor has the right to terminate this Agreement upon written notice [p.219].
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts. The FDD focuses on working capital reserves needed to keep the business operational for at least 3 months, which cannot be less than $10,000 or you can secure a line of credit for that amount. There is no mention of net worth or specific liquid capital requirements for qualification as a franchisee.
Do I get an exclusive or protected territory?
You do not receive an exclusive territory for your franchise business [p.47]. However, you may be granted exclusive rights to operate an event trailer within a territory if purchased in conjunction with a brick and mortar or static trailer franchise within two years of opening it [p.46, p.155]. Otherwise, you are allowed to operate in protected areas, which are territories not covered by other traditional franchises or event trailers [p.47, p.155].
What training and ongoing support does the franchisor provide?
The franchisor provides initial training for up to 4 attendees without charge, with an option for up to 2 additional attendees at a cost of $250 per day per person [p.44]. This training includes both classroom and on-the-job components, though the duration varies based on the type of franchise (brick and mortar, static trailers, or event trailers) [p.44]. The franchisor also offers ongoing support through required training and certification programs that transferees and new operating principals must complete [p.108].
How many franchised outlets are there, and how many have closed or been terminated?
This isn't specified in the excerpts.
Does the franchisor share any financial performance or earnings information?
The franchisor does not make any financial performance representations except for providing actual records of an existing outlet if a prospective franchisee is purchasing one. However, they may provide financial statements from company-owned locations and franchisees upon reasonable request [p.65]. This isn't specified in the excerpts for new franchises or outlets.
What am I restricted to selling, and where must I buy supplies?
You are required to sell only those products and services specified and approved by the franchisor in writing. No product or service can be added, altered, or discontinued without prior written approval from the franchisor [p.54]. As for supplies, you may have to purchase items from the franchisor or a limited group of suppliers designated by them, which might be more expensive than other options [p.4; p.147].