Risk Score
Pending analysis
Investment Range
$764,500 - $1,527,000
Franchise Fee
$30,000
Min Cash Required
$200,000
Total US Locations
1
Business Summary
5 Tacos & Beers operates sit-down, brick-and-mortar restaurants that serve tacos made with locally sourced ingredients, grass-fed beef and pork, and craft beer beverages.
Corporate History
5 Tacos & Beers Franchising, LLC was established as a California limited liability company on June 16, 2022. The company began offering its 5 Tacos & Beers franchises in June 2023. While 5 Tacos & Beers Franchising, LLC itself does not operate restaurants, its affiliate, 5 Tacos & Beers Inc., has operated a similar restaurant in Albany, CA since June 2020. Other affiliates include 5 Tacos & Beers of Walnut Creek, Inc. (formed May 2020), 5 Tacos & Beers Berkeley, Inc. (formed June 2022), and Los Moles El Cerrito, Inc. (formed January 2017), which is the registered owner of several trademarks used by the franchise.
Financial Overview
Investment Range
$764,500 - $1,527,000
Franchise Fee (Low)
$30,000
Franchise Fee (High)
$30,000
Minimum Cash Required
$200,000
Royalty %
5%
Marketing %
0.5%
Equipment Costs (Low)
$430,000
Equipment Costs (High)
$865,000
Working Capital
$300,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
The FDD highlights a special risk regarding the financial condition of 5 Tacos & Beers Franchising, LLC, stating that the franchisor is undercapitalized and may not be able to meet preopening obligations to all franchisees. The company's financial statements show a recurring members' deficit, indicating negative equity.
Financing Details
5 Tacos & Beers Franchising, LLC does not offer any direct or indirect financing to franchisees. The franchisor also does not guarantee any notes, leases, or other obligations for its franchisees.
Performance Metrics
Total US Locations
1
Franchised Units
0
Corporate Units
1
Avg Square Footage
3,750
Franchising Since
2023
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
5 Tacos & Beers Franchising, LLC has no litigation to report, indicating a clean legal history for the franchise system.
Bankruptcy History
5 Tacos & Beers Franchising, LLC has no bankruptcy history to report for the franchisor or its key personnel.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew their franchise, 5 Tacos & Beers franchisees must provide 180 days prior written notice of their intent to renew. They must have fully complied with all material terms of their current Franchise Agreement and paid all monetary obligations to 5 Tacos & Beers Franchising, LLC. Franchisees are also required to agree in writing to update their business to reflect current system standards and image, sign a general release of claims against 5 Tacos & Beers Franchising, LLC (where permitted by state law), and sign the then-current standard Franchise Agreement, which may include different terms and fees. A nonrefundable renewal fee of $10,000 is due upon signing the new agreement. Additionally, their management staff must successfully complete any prescribed refresher training 30 days before the current term expires.
Training & Support Program
Franchisor Assistance
5 Tacos & Beers Franchising, LLC offers substantial assistance to its franchisees. Before opening, the franchisor helps with site selection and lease agreement review, provides suggested staffing guidelines, grants access to a confidential operating manual, offers prototype plans and specifications for restaurant design and equipment, and approves the grand opening marketing plan. An initial training program must be successfully completed. During ongoing operations, 5 Tacos & Beers Franchising, LLC provides updates on system developments and techniques, offers additional training programs, advises on operating problems found through reports or inspections, and gives guidance on pricing for products and services.
Initial Training Hours
264
Training Location
Franchisor headquarters, franchisee's restaurant, and remote/video call options
Ongoing Support
After opening, 5 Tacos & Beers Franchising, LLC provides ongoing support by sharing information on new developments and improvements for the system, offering suggested staffing guidelines and operational instructions, and providing additional training programs that franchisees may be required to attend. The franchisor also advises on operating problems identified from reports or inspections, offers guidance on pricing for products and services, and may require franchisees to attend an annual conference.
Franchise Requirements
Ideal Candidate Profile
5 Tacos & Beers Franchising, LLC seeks franchisees who, for single unit agreements, will be active owner/operators directly involved in managing all aspects of their business. If the franchisee is a business entity, a Designated Principal owning at least 10% equity must be appointed and actively involved, working no fewer than 20 hours per week on-site. For Area Development agreements, absentee ownership is permitted, though on-premises supervision is recommended. All franchisees must ensure their business is supervised by a fully-trained, approved manager, and the franchisee or their Designated Principal must successfully complete the initial training program.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Retail
Owner Participation
Supervisory
Territory Type
Protected
Territory Size Requirements
5 Tacos & Beers Franchising, LLC defines its franchise territories during the site confirmation process, considering factors such as household numbers, traffic count, foot traffic, local competition, accessibility, and population density. Each territory will include a minimum of 100,000 people, and the exact size will vary for each franchised business.
Staffing Notes
5 Tacos & Beers Franchising, LLC provides franchisees with suggested staffing guidelines and operational instructions for new employees. Franchisees are solely responsible for all hiring decisions, compensation, terms of employment, working conditions, and disciplinary actions for their staff. The franchisor offers training to employees and may require them to attend programs for a fee. The franchisee's Designated Principal must be on-site at least 20 hours per week, and other 10% equity owners must be on-site at least 20 hours per month. The franchised business must also be under the direct on-premises supervision of a fully-trained manager or assistant manager approved by the franchisor.