District Taco
District Taco offers Yucatan-style Mexican and Latin cuisine through franchised restaurants, with an initial investment of $733,750 to $1,457,750. Known for its specific recipes and procedures, it operates in the quick-service restaurant sector.
About District Taco
District Taco is a fast-casual Mexican restaurant with 20 locations in the Mid-Atlantic region. District Taco offers a fully customizable menu of tacos, bowls, burritos, and more featuring authentic Yucatán-inspired flavors. It was founded in 2009 as a food truck in Rosslyn, Virginia, and opened its first brick-and-mortar location in 2010 in Arlington, Virginia. Since then, the company has opened many more locations serving the Northeast.
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District Taco franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment to begin operation of a District Taco franchise ranges from approximately $733,750 to $1,457,750. This includes an initial Franchise Fee of $31,000 to $33,500 and the cost of establishing one or more restaurants under a Development Agreement, which is between $60,000 and $550,000. Additional costs such as rent, real estate, and the Computer System (approximately $15,000 to $30,000) are also part of this total investment.
What is the initial franchise fee?
The initial franchise fee is a lump sum payment of $25,000. This fee is fully earned when you sign the Franchise Agreement and is non-refundable under normal circumstances [p.20, p.80, p.11]. However, if certain conditions are met (such as not signing an approved lease within six months or the death/disability of the Operating Principal without the DT Restaurant opening), up to 50% of the initial franchise fee may be refunded [p.20, p.80].
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is 6% of the Gross Sales from the previous week, to be paid on a specified Payment Day each week [p.80]. This isn't specified in the excerpts for advertising fees.
How long is the initial franchise agreement, and can I renew it?
This isn't specified in the excerpts. The provided FDD excerpts do not contain information about the duration of the initial franchise agreement or the renewal process.
Can I sell or transfer my franchise, and what does that require?
According to the FDD, you can transfer your franchise, but it requires your consent [p.5(g)]. Additionally, if you wish to transfer, there is a right of first refusal for the franchisor [p.5(g)]. The transferee must agree to be bound by all terms and conditions of the Franchise Agreement or sign a new agreement with potentially different terms [p.102(9)]. There is also a transfer fee of $5,000 payable to cover evaluation costs [p.102(10)].
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement if there is 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 (not more than 30 days) to do so [p.5]. Additionally, the franchisor may terminate the agreement on any grounds available by law [p.173], but termination without reasonable cause is unlawful under Virginia Retail Franchising Act [p.176].
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts. The provided FDD excerpts focus on the franchisor's financial situation rather than the franchisee's qualification criteria regarding net worth or liquid capital.
Do I get an exclusive or protected territory?
Based on the excerpts, you do not receive an exclusive territory. Your Primary Area of Responsibility is defined but is smaller than the Site Selection Area, and you may face competition from other franchisees, District Taco Restaurants at Non-Traditional Locations, or outlets owned by the franchisor [p.43, p.44]. Additionally, there are no options or rights of first refusal to acquire additional franchises within your Primary Area of Responsibility [p.45].
What training and ongoing support does the franchisor provide?
The franchisor provides an initial training program that includes various components like classroom training, hands-on training at a restaurant, remote training, and self-study programs. This program must be satisfactorily completed by key personnel before opening the restaurant [p.22, p.78]. Additionally, upon request, the franchisor sends an Opening Trainer for up to 10 days to assist with brand standard issues after the opening date [p.39].
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 other than providing actual records of an existing company-operated restaurant if you are purchasing one. Additionally, they do not authorize their employees or representatives to make such representations either orally or in writing [p.58]. However, the franchise disclosure document allows for the inclusion of financial performance information if there is a reasonable basis and it is included as part of Item 19 [p.55]. If you receive any other financial performance information or projections, you should report it to the franchisor's management [p.58].
What am I restricted to selling, and where must I buy supplies?
You are restricted to selling only the products and services authorized by the franchisor [p.83]. You must purchase certain food items, alcoholic and other beverages, supplies, smallwares, largewares, chemicals, hot sauces, and retail merchandise from designated or approved suppliers [p.23], and you must buy your food, beverages, and operating supplies through an approved distributor [p.23].