Pancheros
Pancheros offers burritos, tacos, and other Mexican cuisine in franchised restaurants. Known for its flavorful menu, it operates in the quick-service restaurant sector.
About Pancheros
Pancheros Mexican Grill is a chain of fast casual Tex-Mex restaurants in the United States serving Mexican-style cuisine. The chain was founded on August 14, 1992, by Rodney Anderson, who opened two units simultaneously: one in Iowa City, Iowa, and one in East Lansing, Michigan. As of 2024, the chain has over 70 locations in 13 states, with a strong presence in the Midwest and expanding into the Northeast.
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Pancheros 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 unit PANCHEROS franchise ranges from $752,500 to $1,537,500. This includes the $30,000 Initial Franchise Fee that must be paid to the franchisor or affiliate. [p.1]
What is the initial franchise fee?
The initial franchise fee varies based on the circumstances. It is $30,000 for a standard initial franchise, $25,000 for each Franchised Restaurant developed under an Area Development Agreement, and $25,000 for each additional Franchisee's second or subsequent franchise if they are in good standing. There is no initial franchise fee due upon renewal as stated in [p.119].
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is based on a percentage of Gross Revenues, with contributions up to 3% required. Currently, 2% of Gross Revenues are collected as an advertising fund contribution, which may be increased to 3% in the future [p.31]. These fees are paid weekly along with other payments [p.175].
How long is the initial franchise agreement, and can I renew it?
This isn't specified in the excerpts.
Can I sell or transfer my franchise, and what does that require?
According to the FDD, you cannot freely sell or transfer your franchise ownership; it requires good cause for such a transfer [p.5]. The franchisor has the right to refuse transfers except for good cause, which is defined but not fully detailed in the provided excerpts. Additionally, if the franchisor decides to assign its rights under the agreement, they may do so without your consent, and this could impact your franchise business [p.3, p.102, p.133].
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement on any grounds available by law [p.63]. Additionally, the franchisor has the right to terminate if the franchisee fails to comply with lawful provisions of the franchise agreement and does not cure such failure within a reasonable time frame, which cannot exceed 30 days [p.5].
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 financial requirements such as net worth or liquid capital needed for qualification as a franchisee. However, it mentions that the franchisor reserves the right to modify its minimum requirements at any time [p.26].
Do I get an exclusive or protected territory?
You will receive a protected territory, but it is not exclusive [p.37]. You may face competition from other franchisees and outlets owned by the company or its affiliates within your designated area [p.37]. This protection does not extend to overlapping Designated Areas of other PANCHEROS Restaurants [p.37].
What training and ongoing support does the franchisor provide?
The franchisor provides initial training to franchisees and their managers as part of the franchise agreement [p.120]. Ongoing, if a manager is designated by the franchisee, the franchisor will provide training at then-current published rates, though not individually for each manager [p.91]. Additionally, the franchisor licenses intellectual property and trademarks to franchisees and provides consulting services through these agreements [p.175].
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 may provide actual records of an existing outlet if you are purchasing one. However, they do not make representations about a franchisee's future financial performance or past financial performance of company-owned or franchised outlets, except for the financial performance representations contained in their disclosure document. [p.54, p.109]
What am I restricted to selling, and where must I buy supplies?
You are required to sell menu items and other food/beverage products strictly according to the franchisor's recipes, cooking techniques, and processes [p.43]. The franchisor has the right to approve or disapprove all products and services sold at your Franchised Restaurant and can make changes without limitation [p.43]. You must purchase virtually all goods, services, supplies, fixtures, equipment, and inventory from approved suppliers as specified by the franchisor [p.25], which may be more expensive than other options [p.3].