Baja Fresh Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$224,950 - $1,012,290
Franchise Fee
$8,000
Min Cash Required
$42,400
Total US Locations
73
Business Summary
Baja Fresh operates quick service restaurants that offer fresh, high-quality Mexican-style food products, soft drinks, and related items. Baja Fresh restaurants provide fast service with on-premises dining facilities and take-out options. Franchisees operate these restaurants under the Baja Fresh trade name and utilize a system of food production and operating techniques licensed by the franchisor, identifying the restaurant with the Baja Fresh reputation for quality and service.
Corporate History
The first Baja Fresh Mexican Grill restaurant was opened in August 1990 by Mr. James Magglos in Newbury Park, California. The concept expanded through Triune Corporation and Baja Fresh Westlake Village, Inc., which was incorporated in 1992. In 1997, Fresh Enterprises, Inc. acquired Westlake Village and Triune Corporation. Wendy's International, Inc. then acquired Fresh Enterprises, Inc. in 2002. BF Acquisition Holdings, LLC (BFAH), the current franchisor, was organized in October 2006 and acquired Triune Corporation's franchise assets and Fresh Enterprises, Inc. from Wendy's in November 2006. Triune Corporation and Fresh Enterprises, Inc. later reorganized in 2009, forming Triune, LLC and Fresh Enterprises, LLC. MTY Franchising USA, Inc. purchased BFAH in October 2016, making BFAH a subsidiary of MTY. In July 2017, BFAH acquired assets from Triune, LLC and Fresh Enterprises, LLC, formally becoming the franchisor of Baja Fresh Mexican Grill. Baja Fresh has been offered under Triune, LLC since October 2016 and under BFAH since July 2017.
Financial Overview
Investment Range
$224,950 - $1,012,290
Franchise Fee (Low)
$8,000
Franchise Fee (High)
$30,000
Minimum Cash Required
$42,400
Royalty %
5%
Marketing %
3%
Equipment Costs (Low)
$149,050
Equipment Costs (High)
$832,200
Working Capital
$57,950
Audited Financials
Yes
Offers Financing
Yes
Financial Health Notes
Item 21 of the FDD states that audited consolidated financial statements for Baja Fresh's parent company, MTY Franchising USA, Inc., are attached as Exhibit V. MTY Franchising USA, Inc. provides a performance guaranty for Baja Fresh's obligations to its franchisees. This guarantee ensures that the parent company will assume the duties and obligations of Baja Fresh under its franchise registrations and agreements until all such obligations are satisfied. The FDD text provided for Item 21 does not offer specific details on the financial health, working capital, or any going concern issues related to Baja Fresh itself, only referencing the parent company's consolidated financials in an unprovided exhibit.
Financing Details
Baja Fresh does not offer direct or indirect financing for its franchises, nor does it guarantee obligations under notes or other general obligations. However, in specific situations and at its sole discretion, Baja Fresh or its affiliates may offer financing for the purchase of a corporate-owned restaurant or may guarantee a franchisee's lease for a new location. If a franchisee purchases a corporate-owned restaurant, an affiliate lender (Kahala Holdings, LLC or Kahala Restaurants) may finance up to 100% of the purchase price, including the initial franchise fee, equipment, leasehold improvements, and inventory. Interest rates for this financing range from 0% to 12% annually, based on the franchisee's creditworthiness, the amount financed, and any upfront payment. Repayment occurs in equal monthly installments over 12 to 60 months. Baja Fresh requires a first-position lien on all equipment and a personal guarantee from the franchisee (and their spouse) or entity principals (and their spouses). Prepayment of the note is allowed without penalty. In case of default, the entire amount due may be accelerated (with an 18% annual interest rate), and Baja Fresh may charge collection costs, attorneys' fees, terminate the franchise, and exercise cross-default rights, including taking back the restaurant without compensation to the franchisee. Franchisees must waive certain legal rights upon default, including contesting the take-back rights. If Baja Fresh or an affiliate guarantees a franchisee's lease, the franchisee must pay a lease guarantee fee of 10% of the total guaranteed rental obligations, up to a maximum of $10,000, upon execution of the guarantee.
Performance Metrics
Total US Locations
73
Franchised Units
67
Corporate Units
6
Avg Square Footage
1,800
Franchising Since
2016
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
18
Litigation Summary
Baja Fresh, through its various affiliates and predecessors, has been involved in several past lawsuits and administrative actions across different brands. Historically, cases involving breach of contract and franchise law violations (including for The Extreme Pita, Kahala Franchising, SweetFrog, Fresh Enterprises, Famous Dave's, and Wetzel's Pretzels) were filed between 2013 and 2019, most of which were settled or dismissed by 2021. For example, Papa Murphy's International faced two class-action lawsuits in 2014 from franchisees alleging misrepresentations, which were consolidated and settled by 2020. Additionally, the franchisor's predecessor, Triune, LLC, settled administrative actions with the states of Maryland and Virginia in 2012 for franchise registration and disclosure violations. More recently, Kahala Franchising, LLC, an affiliate of Baja Fresh, filed two lawsuits against franchisees between December 2023 and November 2024: one in Illinois for breach of contract and another in Iowa for forcible entry and detainer. These two recent cases are listed as ongoing.
Bankruptcy History
Baja Fresh has no bankruptcy history to report for the franchisor or its key management personnel.
Agreement Terms
Initial Term
10 years
Renewal Term
5 years
Renewal Conditions
To renew their Baja Fresh franchise, franchisees must provide at least 120 days' written notice before the current term expires. They must not be in default of their franchise agreement or any other agreements with Baja Fresh or its affiliates, and must be current on all financial obligations. Franchisees cannot have received more than three notices of default during the term or more than two in the five years preceding renewal. They must also have an approved premises, sign the then-current franchise agreement (which may have different terms, including higher fees), pay a renewal franchise fee, and complete any required remodeling or refurbishment to meet current Baja Fresh standards. A general release must also be signed as part of the renewal process.
Training & Support Program
Franchisor Assistance
Before opening, Baja Fresh provides assistance with site selection and review of lease or purchase agreements, ensuring locations meet minimum site requirements. Franchisees must use a Baja Fresh-approved third-party design architect for initial drawings, and the franchisor approves plans for adherence to brand standards. Franchisees are responsible for construction, permits, and compliance with all laws, including the ADA. Baja Fresh also provides a confidential operations manual, a training program of approximately 280 hours (240 in-store and 40 new owner training) for up to two individuals, and a representative for up to 15 days during grand opening week to assist with launch and initial operations. After opening, Baja Fresh maintains a continuing advisory relationship, offering consultation on marketing, merchandising, and general business operations. The franchisor provides information on operating standards and conducts periodic inspections to ensure quality. They may also inform franchisees about available software for administrative and inventory control. Baja Fresh will review and approve any proposed restaurant relocations and may offer renewal of the franchise agreement. Upon request, Baja Fresh may assist with pricing strategies (though the final decision rests with the franchisee) and help resolve operating problems. The franchisor also establishes and administers an Advertising Fund for system-wide marketing and advertising campaigns. For technology, Baja Fresh requires franchisees to use an approved point-of-sale (POS) system, with remote access for data collection, and an approved debit, credit, and gift/loyalty card processing system. Franchisees must also maintain a personal computer with Internet access for sales reporting and online orders.
Initial Training Hours
280
Training Location
Online, corporate offices in Scottsdale, Arizona, or affiliated restaurants in metropolitan Phoenix, Arizona.
Ongoing Support
After opening, Baja Fresh maintains a continuing advisory relationship, consulting with franchisees on marketing, merchandising, and general business operations to help improve and develop their restaurants. The franchisor provides information on its operating standards and may modify them periodically. Baja Fresh conducts periodic inspections and quality service checks of restaurants to ensure high and uniform standards. The franchisor may also make franchisees aware of software available from approved third-party vendors to assist with administrative, bookkeeping, accounting, and inventory control procedures. Baja Fresh reviews and must approve substitute locations if a franchisee desires to relocate their restaurant. The franchisor may offer a one-time renewal of the franchise agreement for a maximum term of five years if franchisees meet specific requirements. Upon request, Baja Fresh will reasonably assist franchisees with establishing pricing for products (though the final decision is theirs) and in resolving operating problems. Baja Fresh may also hold mandatory refresher or additional training programs, conferences, and seminars, for which franchisees may pay a registration fee and cover their travel and personal expenses.
Franchise Requirements
Ideal Candidate Profile
Baja Fresh seeks franchisees who are not looking for a passive investment but instead plan to actively participate in the direct operation and daily affairs of their restaurant. The franchisor strongly recommends that franchisees devote a substantial amount of time to their Baja Fresh restaurant, whether or not they hire a manager. Individuals with an equity interest in the franchisee entity and executive officers must sign personal guarantees, confidentiality agreements, and non-disclosure/non-competition agreements. Franchisees are required to employ at least one full-time, on-premises manager who meets the franchisor's criteria as a qualified restaurant operator, devotes their entire time to management, and can read and write English adequately to complete training and communicate with staff and customers.
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
supervisory
Territory Type
non-exclusive
Staff Count
1
Territory Size Requirements
Baja Fresh franchisees will not receive an exclusive territory. The franchise is granted only for a specific, approved location. Baja Fresh, or its affiliates, retains the right to establish other franchised or company-owned Baja Fresh restaurants that may compete with the franchisee's location, including in the immediate vicinity or within the same venue. Baja Fresh also reserves the right to market products through other channels of distribution, such as the Internet, grocery stores, or mobile units, which may compete with a franchisee's location without compensation.
Staffing Notes
Baja Fresh requires franchisees to employ at least one full-time, on-premises manager for each restaurant. This manager must devote their entire time during normal business hours to the management, operation, and development of the Baja Fresh business. Managers are also required to be able to read and understand all written materials from Baja Fresh and communicate effectively in English with employees and customers. All restaurant personnel must maintain established standards of sanitation, cleanliness, and demeanor, and wear approved uniforms. Franchisees are solely responsible for the hiring, firing, training, supervising, and compensation of their employees, as well as maintaining employment records and ensuring employee safety and compliance with Baja Fresh's System Standards.