District Taco Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$733,750 - $1,457,750
Franchise Fee
$25,000
Total US Locations
15
Business Summary
District Taco operates fast-casual restaurants specializing in Yucatan-style Mexican and Latin food. District Taco franchisees feature menu items such as tacos, burritos, bowls, salads, and quesadillas, all prepared according to the brand's specified recipes and operating procedures. The restaurants maintain a casual and fast-casual dining theme.
Corporate History
District Taco, as a brand concept, began with food carts in August 2009, and its affiliate, District Taco, LLC (DTL), has operated District Taco Restaurants since 2009. The parent company, District Brands, Inc., was formed in November 2015. District Franchising, LLC, the franchisor entity, was organized in Virginia in August 2020 and officially started offering franchises for District Taco Restaurants in January 2021. The franchisor itself has not operated any restaurants but leverages the experience of its related companies and their principals.
Financial Overview
Investment Range
$733,750 - $1,457,750
Franchise Fee (Low)
$25,000
Franchise Fee (High)
$25,000
Royalty %
6%
Marketing %
2%
Equipment Costs (Low)
$670,000
Equipment Costs (High)
$1,175,000
Working Capital
$12,500
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
District Franchising, LLC's financial statements indicate that the company is in an early stage of development and has a limited operating history. As a result, there is no demonstrated indication of the franchisor's financial ability to provide services and support to its franchisees. The company experienced net losses in 2021, 2022, and 2023. Although member's equity improved in 2023 due to a significant capital contribution from its parent company, the franchisor's short operating history is highlighted as a special risk.
Financing Details
District Franchising, LLC does not offer any direct or indirect financing options to its franchisees, nor does it guarantee any franchisee notes, leases, or other obligations. Franchisees are responsible for securing their own funding through third-party sources.
Performance Metrics
Total US Locations
15
Franchised Units
2
Corporate Units
13
Avg Square Footage
2,500
Franchising Since
2021
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
District Franchising, LLC has no litigation, including pending, administrative, criminal, or civil actions, required to be disclosed in Item 3 of its Franchise Disclosure Document.
Bankruptcy History
District Franchising, LLC has no bankruptcy information to report.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew their District Taco franchise for an additional 10-year term, franchisees must provide written notice to District Franchising, LLC between 6 and 12 months before the current agreement expires. They must be in full compliance with all obligations under the franchise agreement and other related agreements throughout the initial term. Franchisees also need to demonstrate they can maintain possession of their approved site for at least 10 years after the current agreement's expiration. Finally, they are required to renovate or remodel their restaurant to meet the then-current requirements for new District Taco locations, sign District Franchising, LLC's then-current franchise agreement (which may have materially different terms and fees), and pay a successor franchise fee equal to the then-current initial franchise fee, along with signing a general release of claims.
Training & Support Program
Franchisor Assistance
District Franchising, LLC provides franchisees with pre-opening support including assistance with site selection and lease acceptance, defining the primary service area, and offering mandatory specifications and layouts for restaurant design, equipment, and the Computer System. An initial training program is provided for key personnel, and an optional Opening Trainer can offer on-site assistance during the restaurant launch. Ongoing support involves periodic operational advice, updates to the operating manual and brand standards, and potential mandatory training courses or conventions (which may incur fees). District Franchising, LLC also manages an Innovation Fund for marketing and advertising, administers the brand's website and mobile application, and establishes pricing requirements for products and services. IT support for system diagnosis is available for an hourly fee.
Initial Training Hours
180
Training Location
Corporate headquarters in Falls Church, Virginia and a designated District Taco Training Restaurant
Ongoing Support
District Franchising, LLC provides ongoing support to franchisees through periodic advice on restaurant operations based on reports and inspections. It issues updates to the operating manual and brand standards, manages the Innovation Fund for advertising, and maintains the District Taco website. District Franchising, LLC also sets pricing requirements for menu items and promotions. While there are no currently planned ongoing or optional training programs, franchisees may be required to attend various courses, programs, or conventions, which may incur fees. Additional requested assistance, such as consultation on operations, advertising, marketing, and accounting, is available for an hourly fee plus expenses.
Franchise Requirements
Ideal Candidate Profile
District Franchising, LLC seeks franchisees who will establish and maintain an Operating Principal and a General Manager for their District Taco Restaurant. The Operating Principal, who can be the franchisee themselves or a designated and approved individual with an equity interest, must dedicate sufficient time and attention to the business's operation and serve as the primary contact with District Franchising, LLC. The General Manager, who can be the Operating Principal or another designated individual, must devote substantially all of their business time to the on-premises management and operation of the restaurant. If the franchisee is an entity, the Operating Principal will also serve as the development and operational manager for the restaurant and any other affiliated District Taco Restaurants.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Retail
Owner Participation
Hands-On
Territory Type
Protected
Territory Size Requirements
District Taco defines the protected territory, known as the Primary Area of Responsibility, after the franchisee signs a lease for the approved site. This area is based on factors like demographics and the character of the site. The territory will be limited to either the contiguous property controlled by the landlord where the restaurant is located or, if not within such property, the specific site itself. The Primary Area of Responsibility can be as small as the physical space occupied by the restaurant or the entire shopping center where it is situated.
Staffing Notes
District Franchising, LLC requires each District Taco Restaurant to have an Operating Principal and a General Manager at all times. The General Manager must be highly involved in the daily, on-premises management and operation of the restaurant. In addition to these roles, franchisees must ensure that the General Manager and at least two other managers complete the initial training program. District Franchising, LLC clarifies that franchisees are solely responsible for all employment-related decisions and practices, including hiring, firing, discipline, and setting terms and conditions for all restaurant employees.