Barberitos Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$521,000 - $830,360
Franchise Fee
$26,250
Min Cash Required
$104,200
Total US Locations
42
Business Summary
BARBERITOS® operates restaurants specializing in Southwestern cuisine, offering burritos, quesadillas, nachos, tacos, salads, and cold beverages. These restaurants provide options for lunch, dinner, catering, and take-home, serving the general public with fresh, prepared-to-order food.
Corporate History
Barberitos Franchising Co., LLC was formed on February 9, 2022, as a Delaware limited liability company. It exclusively offers franchises under the BARBERITOS® trademarks. Its predecessor, Barberitos Franchising, Inc., a Georgia corporation, was formed on April 9, 2002, and offered Barberitos franchises from April 2002 to April 2022. On May 10, 2022, Barberitos, LLC (the current franchisor's parent) acquired substantially all assets of the predecessor, including 43 franchised locations and 4 corporate-owned outlets. The current entity, Barberitos Franchising Co., LLC, began offering franchises on September 14, 2022. The franchisor is part of a larger parent company structure (WOWorks and CLP Dining, LLC) that also franchises other food service concepts like Saladworks, Garbanzo Mediterranean Fresh, Frutta Bowls, and Z!Eats.
Financial Overview
Investment Range
$521,000 - $830,360
Franchise Fee (Low)
$26,250
Franchise Fee (High)
$35,000
Minimum Cash Required
$104,200
Royalty %
6%
Marketing %
3%
Equipment Costs (Low)
$405,000
Equipment Costs (High)
$663,300
Working Capital
$25,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Going concern qualification
Financial Health Notes
The franchisor's parent company, Restaurant Co., LLC dba WOWorks, has raised concerns about its financial condition, as indicated in its financial statements. The auditors' report mentions that management is required to evaluate whether there are conditions or events that raise substantial doubt about the Company's ability to continue as a going concern within one year. The consolidated statements of operations show a net loss of $3,114,915 for the fiscal year ending September 29, 2024, and $1,009,706 for the fiscal year ending September 24, 2023. Additionally, member's equity was a deficit of $(924,730) at the end of fiscal year 2024, and there is a cumulative net loss since the inception of operations. The Special Risks section of the FDD itself highlights this as a factor calling into question the franchisor's financial ability to provide services and support to franchisees.
Financing Details
Barberitos Franchising Co., LLC does not offer any direct or indirect financing to its franchisees. Additionally, it does not guarantee any notes, leases, or other obligations of the franchisee.
Performance Metrics
Total US Locations
42
Franchised Units
42
Corporate Units
0
Avg Square Footage
1,800
Franchising Since
2002
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
Barberitos Franchising Co., LLC has no litigation that is required to be disclosed in this Franchise Disclosure Document.
Bankruptcy History
Barberitos Franchising Co., LLC has no bankruptcy information that is required to be disclosed in this Franchise Disclosure Document.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew the franchise, Barberitos franchisees must: (i) provide written notice of intent to renew 6 to 12 months before the current term expires; (ii) prove the right to operate the restaurant at the approved or an acceptable substitute location for the renewal term; (iii) complete all required maintenance, refurbishing, renovating, updating, and remodeling of the restaurant premises to meet current system standards at least 90 days before expiration; (iv) be in full compliance with the franchise agreement and all other agreements with the franchisor, its affiliates, and major suppliers/vendors; (v) satisfy all monetary obligations owed to the franchisor, its affiliates, and its suppliers/vendors; (vi) sign the franchisor's then-current franchise agreement, which may contain materially different terms; (vii) complete the franchisor's then-current training requirements for renewing franchisees at their own expense; (viii) meet all operational standards, including those for quality, service, and cleanliness; (ix) sign a general release in the form prescribed by the franchisor; and (x) pay a renewal fee of $17,500.
Training & Support Program
Franchisor Assistance
Before opening, Barberitos Franchising Co., LLC provides franchisees with an electronic copy of its Operations Manuals, offers a Franchise Orientation Seminar, and conducts an initial training program lasting up to 4 weeks (15 hours virtual/classroom, 80 hours on-the-job in Athens, GA, or alternative locations) for the franchisee and up to three managers. It also supplies a Prototype Design Package for restaurant design and specifications for inventory and supplies. The franchisor approves the franchisee's Grand Opening Advertising Program (requiring at least $15,000 in spending) and assists with a mock opening 1-2 days before the public opening, providing 1-5 days of on-site assistance depending on the franchisee's experience level. After opening, Barberitos Franchising Co., LLC offers continuing consultation and advice via phone, fax, intranet, and on-site visits (additional on-site assistance is available for a fee). It manages a Brand Development Fund (3% of Net Sales) for system-wide marketing, implements systemwide marketing promotions (which franchisees must participate in), maintains loyalty and gift card programs, controls master digital marketing and social media accounts (while allowing franchisees to customize local pages), and approves local advertising materials. Franchisees are required to participate in any system-wide computer network and attend annual conventions (with a $1,000 non-attendance fee if missed). The franchisor also provides training materials for franchisee personnel and may offer additional training or refresher courses.
Initial Training Hours
95
Training Location
Virtually via webinar and at a company-owned BARBERITOS restaurant in the Athens, Georgia area, with alternative training restaurants possible based on availability.
Ongoing Support
After opening, Barberitos Franchising Co., LLC provides ongoing consultation and advice through telephone, facsimile, intranet communication, and on-site visits. Additional on-site assistance is available upon request for a fee of $500 per person per day, plus expenses. The franchisor manages a Brand Development Fund for system-wide advertising (3% of Net Sales) and implements systemwide marketing promotions, which franchisees must participate in. This includes honoring loyalty program terms, selling and honoring gift cards, and promoting these programs. Barberitos Franchising Co., LLC also administers master digital marketing and social media accounts, allowing franchisees to customize local pages while adhering to the brand's social media policy. Franchisees must spend 2% of Net Sales on local advertising and submit plans for approval. They are required to participate in any system-wide computer network and attend annual conventions or regional meetings. The franchisor also offers additional training or refresher courses, and charges fees for failed inspections, unresolved guest complaints, and critical operating standards violations.
Franchise Requirements
Ideal Candidate Profile
Barberitos seeks qualified individuals or entities who demonstrate strong educational, managerial, and business standards. Ideal candidates possess good moral character, a solid business reputation, and a healthy credit rating. They should have the aptitude and ability to actively manage and operate the restaurant, committing their best efforts, or ensuring a successfully trained manager is in place. Franchisees must also have adequate financial resources and capital to meet operational obligations. They should not be involved in a competing restaurant business, unless they are an existing Barberitos franchisee.
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
Limited
Territory Size Requirements
Barberitos grants franchisees a protected territory for their approved location, with the scope and size determined at the franchisor's sole discretion. The factors considered include general location, traffic patterns, parking availability, site size, access, visibility, area demographics, population density, surrounding commercial activity, and market demands. At a minimum, the territory may be limited to the approved location itself.
Staffing Notes
Barberitos Franchising Co., LLC requires that the franchisee (or at least one principal, if the franchisee is an entity) devote their best efforts to the management and operation of the restaurant. While day-to-day supervision can be delegated to a Manager, that Manager must successfully complete the franchisor's initial training program before assuming responsibilities and must dedicate full-time best efforts to the restaurant's daily supervision. If a Manager leaves, a replacement must be hired within 30 days and trained within 60 days. All Managers and personnel with access to confidential information must sign a Confidentiality and Restrictive Covenant Agreement.