Chronic Tacos
Chronic Tacos offers franchises for authentic Mexican food restaurants, including dine-in, take-out, and delivery options. Known for its flavorful menu, this California-based franchise requires an initial investment of $284,000 to $884,000 per restaurant.
About Chronic Tacos
Chronic Tacos is an American chain of fast casual restaurants specializing in tacos, Mission or California burritos, tostada bowls, carne asada fries and churros. The first Chronic Tacos restaurant was opened in 2002 in Newport Beach, California, by Daniel Biello and Randy Wyner. As of 2020, the company operates over 60 locations across the United States, Canada and Japan.
Read more on Wikipedia → · Facts from Wikipedia (CC BY-SA)
Chronic Tacos franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operations of a single Chronic Tacos restaurant ranges from $284,000 to $884,000. This includes an Initial Franchise Fee of $30,000 and other costs as detailed in the FDD [p.1].
What is the initial franchise fee?
The initial franchise fee is $30,000 for your first single Taco Restaurant when you sign the Franchise Agreement [p.9, p.82]. If you are renewing an existing franchise agreement, a renewal fee in lieu of an Initial Franchise Fee will be paid upon signing the renewal agreement [p.9]. This fee is included within deferred franchise fees and amortized over the term of the agreement or renewal [p.247].
What are the ongoing royalty and advertising fees?
The franchisee must pay a weekly royalty fee equal to the greater of 6% of Gross Sales or $600, and an additional 2% of sales as an advertising fee. These fees support the brand's marketing efforts [p.18, p.249].
How long is the initial franchise agreement, and can I renew it?
The initial franchise agreement has a 10-year term [p.247], and you have the right to exercise a renewal option for an additional 10 years [p.85]. If you wish to renew, you must notify the franchisor in writing at least 18 months before the expiration of the initial term [p.85].
Can I sell or transfer my franchise, and what does that require?
This isn't specified in the excerpts. The provided FDD sections do not detail the process or requirements for selling or transferring a franchise. For specific information on termination, transfer, or non-renewal of a franchise, you would need to refer to California Business and Professions Code Sections 20000 through 20043 as mentioned in [p.219], or consult the full Franchise Agreement.
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement on any grounds available by law [p.226]. This isn't specified in the excerpts for specific grounds beyond legal grounds.
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 specific details on net worth or liquid capital requirements for franchise qualification. However, it does state that you must maintain adequate reserves and working capital sufficient to cover risks and contingencies for at least three months [p.100].
Do I get an exclusive or protected territory?
No, you do not receive an exclusive territory. You may face competition from other franchisees, outlets owned by the company, and other channels of distribution or competitive brands that the company controls [p.220, p.39, p.84, p.37]. The company will not own, operate, or issue a franchise for another Taco Restaurant within 2 miles of your location during the initial term, provided you are not in default [p.84], but this does not constitute an exclusive territory [p.84].
What training and ongoing support does the franchisor provide?
The franchisor provides a comprehensive Pre-Opening Initial Training Program consisting of approximately 3-4 weeks at their facilities in Southern California and 2-3 weeks hands-on training at the franchisee's location. This program covers practical aspects like food preparation, portion control, cooking procedures, and more [p.35, p.92]. Additionally, ongoing support includes providing comprehensive initial training programs, additional training programs, and remedial training to ensure all employees are fully trained [p.43]. The franchisor also reserves the right to require franchisees to sign confidentiality agreements [p.43].
How many franchised outlets are there, and how many have closed or been terminated?
Based on the provided excerpts, the number of franchised Taco Restaurants that opened or permanently closed in recent years is as follows: - For 2023, 1 franchised restaurant opened, and 7 permanently closed. - For 2022, 3 franchised restaurants opened, and 8 permanently closed. - For 2021, 3 franchised restaurants opened, and 4 permanently closed. This isn't specified in the excerpts for a specific total number of current franchised outlets.
Does the franchisor share any financial performance or earnings information?
The franchisor only shares actual records of existing outlets if you are purchasing one. Otherwise, they do not provide any financial performance or earnings information [p.69]. This includes both past and projected sales, costs, income, or profits for a Taco Restaurant [p.69].
What am I restricted to selling, and where must I buy supplies?
You are restricted to serving only the products authorized by the franchisor ('Authorized Chronic Tacos Products') and must purchase all Chronic Tacos Proprietary Products from the franchisor or approved suppliers. You may also purchase Non-Proprietary Products from approved suppliers, but you can only use items that the franchisor expressly authorizes. This includes using an online portal provided by the franchisor to buy certain products directly from Approved Suppliers. [p.21, p.3, p.22]