Risk Score
Pending analysis
Investment Range
$1,346,250 - $7,515,750
Franchise Fee
$50,000
Total US Locations
8
Business Summary
Barrio Queen franchises restaurants specializing in authentic Southern Mexican food and beverages. These restaurants prepare food using proprietary recipes for both dine-in and take-out customers, and also offer branded, licensed products.
Corporate History
BQ Concepts, LLC was formed in Arizona on February 4, 2022. That same year, in March 2022, BQ Concepts purchased the rights to own, operate, and franchise the Barrio Queen brand from L&S Culinary Concepts, LLC and its affiliates, which at the time operated seven corporate-owned Barrio Queen restaurants. BQ Concepts, LLC began offering Barrio Queen franchises for the first time in March 2023. BQ Concepts, LLC is a subsidiary of BBQ Holdings, Inc., which in turn merged with MTY Food Group, Inc. in September 2022. MTY Food Group, Inc. is a publicly-traded company that owns numerous other restaurant concepts and franchises over 55 different brands primarily in Canada, with several also franchised in the United States through BQ Concepts' affiliates.
Financial Overview
Investment Range
$1,346,250 - $7,515,750
Franchise Fee (Low)
$50,000
Franchise Fee (High)
$50,000
Royalty %
5%
Marketing %
1%
Equipment Costs (Low)
$1,095,000
Equipment Costs (High)
$5,070,000
Working Capital
$7,500
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
The financial statements for BQ Concepts, LLC are consolidated with those of its parent company, MTY Franchising USA, Inc. The independent auditors have issued an unqualified opinion for the consolidated financial statements for the fiscal years ended November 30, 2024, 2023, and 2022. This indicates that the financial statements present the financial position fairly, in all material respects, according to accounting principles generally accepted in the United States. The auditor's reports do not identify any going concern qualification, suggesting that the auditors do not have substantial doubt about MTY Franchising USA, Inc.'s ability to continue as a going concern.
Financing Details
BQ Concepts, LLC does not offer any direct or indirect financing to its franchisees. This means that franchisees are responsible for securing their own funding for the initial investment, ongoing operations, and any other obligations under the franchise agreement. The franchisor also does not guarantee any franchisee's obligations for loans or other financial arrangements.
Performance Metrics
Total US Locations
8
Franchised Units
0
Corporate Units
8
Avg Square Footage
5,250
Franchising Since
2023
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
Yes
Litigation Count
20
Litigation Summary
BQ Concepts, LLC's legal history includes several concluded arbitration and litigation cases, as well as state administrative actions, primarily involving its affiliates such as Kahala Franchising, SweetFrog Enterprises, Famous Dave's of America, and Papa Murphy's International. Many of these cases, dating from 2012 to 2021, involved claims like breach of contract, misrepresentation, and violations of franchise laws, which have since been settled or dismissed. For instance, an arbitration involving Wetzel's Pretzels (an affiliate) regarding intentional misrepresentation was settled in 2021. Several state administrative actions also concluded, mostly concerning registration and disclosure compliance. More recently, between December 1, 2023, and November 30, 2024, Kahala Franchising, L.L.C., an affiliate, filed two lawsuits against franchisees for breach of contract and forcible entry and detainer.
Bankruptcy History
BQ Concepts, LLC's Co-Chief Operating Officer, Adam Lehr, filed for Chapter 13 personal bankruptcy in the U.S. Bankruptcy Court for the District of Minnesota on January 30, 2018. This bankruptcy proceeding was discharged on June 29, 2021. No other bankruptcy history is reported for BQ Concepts, LLC or its other key personnel.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew their franchise agreement, Barrio Queen franchisees must provide at least 120 days' notice before the current term expires. They must not be in default of their franchise agreement or any other agreements with BQ Concepts, LLC or its affiliates, and must be fully compliant with all terms and the Confidential Manual. Franchisees must not have received more than three notices of default during their initial term, or more than two notices in the five years leading up to renewal. They need to either have an existing premises or secure an approved substitute location that meets current site requirements. Upon renewal, franchisees must sign BQ Concepts, LLC's then-current form of franchise agreement, which may have different terms, including potentially higher royalty and advertising fees. They are also required to pay a renewal franchise fee, remodel or refurbish their restaurant if necessary to meet current brand standards, ensure all financial obligations are current, and sign a general release.
Training & Support Program
Franchisor Assistance
Before a Barrio Queen restaurant opens, BQ Concepts, LLC helps franchisees select a site by providing a Site Model Report and issuing a 'no brand standard objection' letter for approved locations. Franchisees must use a designated third-party architect for design. BQ Concepts, LLC identifies necessary equipment, fixtures, and supplies, and provides lists of approved distributors and suppliers. They also offer a 'grand opening celebration' package with advertising materials. For training, BQ Concepts, LLC provides a program for the franchisee's Operating Partner, General Manager, and other management staff, totaling 355 hours of classroom and on-the-job instruction at a certified training location. After opening their first restaurant, BQ Concepts, LLC sends an Opening Team for at least 14 days to assist with system implementation and staff training. Ongoing support includes a continuing advisory relationship, periodic evaluations and inspections by field representatives, and information on operating standards. BQ Concepts, LLC may also offer refresher training programs and host annual conferences, with mandatory attendance for franchisees.
Initial Training Hours
355
Training Location
Certified training location designated by Franchisor, typically in the metropolitan Phoenix, Arizona area, or other locations in the United States as chosen by the franchisor.
Ongoing Support
After a Barrio Queen restaurant opens, BQ Concepts, LLC maintains an ongoing advisory relationship, consulting on marketing, merchandising, and general business operations. They provide updated operating and other standards for the restaurant and conduct periodic inspections and quality service checks. BQ Concepts, LLC also provides additional training if a franchisee hires new management staff who haven't completed the initial program. For franchisees opening subsequent restaurants, BQ Concepts, LLC helps assemble an Opening Team. They may also hold refresher training programs, conferences, and seminars, with mandatory attendance. The franchisor may make franchisees aware of available software from approved third-party vendors for administrative, bookkeeping, accounting, and inventory control procedures.
Franchise Requirements
Ideal Candidate Profile
Barrio Queen is seeking franchisees whose Operating Partner has at least five years of restaurant management experience and will maintain a minimum 20% ownership interest in the franchise entity. The Operating Partner is required to be actively involved full-time in the restaurant's operations. BQ Concepts, LLC does not seek passive investors. Franchisees must also employ a full-time, on-premises Manager who is a qualified restaurant operator and dedicates their entire time during normal business hours to the management, operation, and development of the business. Managers must be able to read and understand written materials and communicate with employees and customers in English.
Industry Experience Required
Yes
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Min Years Experience
5
Operational Details
Location Type
retail
Owner Participation
full-time
Territory Type
non-exclusive
Territory Size Requirements
Barrio Queen franchisees do not receive an exclusive territory. The franchise is granted only for the specific location approved by the franchisor. Franchisees may face competition from other Barrio Queen franchisees, company-owned Barrio Queen restaurants, or other distribution channels and competitive brands controlled by the franchisor or its affiliates, including locations in the immediate vicinity of the franchisee's restaurant.
Staffing Notes
Barrio Queen requires the franchisee's Operating Partner to participate full-time in the restaurant's operations. If the franchisee is an entity, the Operating Partner must have at least five years of restaurant management experience. Franchisees must also employ at least one full-time, on-premises Manager per restaurant. This Manager must meet BQ Concepts, LLC's criteria as a qualified restaurant operator, dedicate their entire time to the restaurant's management and development during business hours, and maintain confidentiality of trade secrets. Managers are required to be proficient in reading and speaking English to effectively communicate with employees and customers on each shift. BQ Concepts, LLC emphasizes that franchisees are solely responsible for hiring, firing, training, supervising, setting employment terms, and compensating their employees, as well as ensuring employee compliance with System Standards.