Barrio Burrito Bar Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$128,750 - $1,119,000
Franchise Fee
$75,000
Min Cash Required
$15,000
Total US Locations
2
Business Summary
BurritoBar USA, Inc. offers master franchises for the operation of businesses that recruit and qualify prospective Barrio Burrito Bar franchisees, sell franchises, and provide ongoing training and support to these franchisees within a designated territory. Master franchisees are also required to operate at least one Barrio Burrito Bar restaurant, which serves grilled burritos, quesadillas, tacos, nachos, salads, and other food and beverage products, to use as a training location for their unit franchisees.
Corporate History
BurritoBar USA, Inc. (BBU) was formed as a Delaware corporation on October 30, 2017. BBU began offering master franchises for its concept in 2017. The company also started offering single unit franchises for Barrio Burrito Bar restaurants in 2021. As of April 30, 2024, BurritoBar USA, Inc. had four single unit franchised businesses. All existing Burrito Bar Master Businesses and Burrito Bar Businesses are expected to rebrand to Barrio Burrito Bar within approximately one year. BurritoBar USA, Inc. does not directly operate the type of master franchise business described in this document. Its Canadian affiliate, BarBurrito Restaurants, Inc. (BBR), has offered franchises in Canada since 2005 and master franchises since 2016. Another affiliate, 2741346 Ontario, Inc., operates one BarBurrito restaurant since 2020, which is also used as a training facility for BBR's franchisees and may be used by BurritoBar USA, Inc.'s franchisees. A new affiliate, BarNaan Franchising, Inc., began offering naan wrap and bowl restaurant franchises in Canada in May 2024.
Financial Overview
Investment Range
$128,750 - $1,119,000
Franchise Fee (Low)
$75,000
Franchise Fee (High)
$500,000
Minimum Cash Required
$15,000
Royalty %
6%
Marketing %
1.5%
Equipment Costs (Low)
$1,500
Equipment Costs (High)
$3,000
Working Capital
$30,000
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Going concern qualification
Financial Health Notes
The auditor for BurritoBar USA, Inc. has issued an unqualified opinion but raised a going concern qualification, indicating substantial doubt about the company's ability to continue operations. BurritoBar USA, Inc. has suffered recurring losses and had negative working capital of approximately $2.6 million and $1.0 million as of April 30, 2024, and 2023, respectively, along with a net capital deficiency of about $2.6 million and $0.9 million for the same periods. Management believes it can raise sufficient capital through additional franchise sales to finance operations for the next twelve months.
Financing Details
BurritoBar USA, Inc. offers master franchisees financing for the Development Fee. This fee can be paid in installments, typically with the first payment (33.3% to 50% of the Development Fee) due at signing. The second installment is due 24 months after signing, and the third is due 36 months after signing. No interest or finance charges are assessed on the outstanding balance. If the Master Franchise Agreement is terminated, any unpaid balance of the Development Fee is forgiven, and no personal guarantees are required for this balance. However, a security deposit (ranging from $75,000 to $500,000) may be required if the Development Fee exceeds $150,000, which can be retained by BurritoBar USA, Inc. upon termination. Beyond these installment payment options for the Development Fee, BurritoBar USA, Inc. does not offer any other direct or indirect financing and does not guarantee any notes, leases, or other obligations.
Performance Metrics
Total US Locations
2
Franchised Units
2
Corporate Units
0
Franchising Since
2017
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
BurritoBar USA, Inc. has no litigation that is required to be disclosed in Item 3 of its Franchise Disclosure Document. This indicates that BurritoBar USA, Inc. and its executives have a clean legal record concerning material litigation.
Bankruptcy History
BurritoBar USA, Inc. has no bankruptcy information that is required to be disclosed in Item 4 of its Franchise Disclosure Document. This means neither the franchisor nor its executives have a history of bankruptcy proceedings.
Agreement Terms
Initial Term
10 years
Renewal Term
5 years
Renewal Conditions
To renew, BurritoBar USA, Inc. master franchisees must notify the franchisor in writing between 180 and 360 days before their term expires, not be in default under their agreement or any affiliate agreements, and not have received more than three default notices in the past 12 months (even if cured). They must also meet their Minimum Quota, pay the applicable renewal fee, negotiate a new development schedule, sign the then-current Master Franchise Agreement and related documents, and execute a general release. Renewal may require signing a contract with materially different terms.
Training & Support Program
Franchisor Assistance
BurritoBar USA, Inc. provides master franchisees with pre-opening assistance, including licensing the necessary trademarks, granting access to its Master Franchise manual, providing an initial virtual training program, and sharing information for the master franchisee's own Franchise Disclosure Document. Ongoing support includes updates on material changes to the underlying business, its marketing, and administration. Master franchisees also receive general advertising and promotional materials, and training materials that they can reproduce. BurritoBar USA, Inc. offers ongoing consulting, guidance, and support. It collects a portion of the Brand Fund Contributions to administer a system-wide fund and provides guidance on advertising and marketing the sale of Barrio Burrito Bar Businesses. Optional assistance may include on-site training or additional training programs, and updates to manuals. Referral fees are paid for qualified candidates that purchase a master franchise.
Initial Training Hours
30
Training Location
Online/virtual
Ongoing Support
BurritoBar USA, Inc. provides ongoing support to master franchisees by updating them on any material changes to the Barrio Burrito Bar business model, its marketing, and administration. It makes available general advertising, promotional, and educational materials that it develops. BurritoBar USA, Inc. also prepares training and educational materials for franchisees, which master franchisees can reproduce with permission. The franchisor offers consulting, guidance, and support throughout the term (subject to monthly allowances and costs). It administers a brand fund using a portion of contributions from master franchisees and provides guidance on advertising and marketing the sale of Barrio Burrito Bar Businesses and the system.
Franchise Requirements
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Hybrid
Owner Participation
Full-Time
Territory Type
exclusive
Territory Size Requirements
BurritoBar USA, Inc. grants master franchise territories that consist of one or more entire states. While there is no specific minimum or maximum size for a development territory, the franchisor intends to grant rights for whole states. The geographic area of a territory will not be reduced upon renewal unless mutually agreed upon by both parties.
Staffing Notes
BurritoBar USA, Inc. requires master franchisees to hire, train, and supervise honest, reliable, competent, and courteous employees for their Master Business operations. This staff must include franchise salespersons, field consultants, and other personnel necessary to perform all activities outlined in the Master Franchise Agreement. Master franchisees are responsible for ensuring their staff holds any required licenses, certifications, or credentials for offering or selling franchises. They must pay all employee wages, commissions, benefits, worker's compensation premiums, and payroll taxes, acknowledging that these individuals are their employees, not the franchisor's. Sufficient trained employees must be maintained to meet operational standards and provide adequate support to franchisees. Employees should only be given minimal information from the Master Franchisee Manual and must not retain copies of it. All employees and representatives with access to confidential information must sign a confidentiality agreement approved by BurritoBar USA, Inc.