Risk Score
Pending analysis
Investment Range
$390,000 - $2,120,000
Min Cash Required
$25,000
Total US Locations
340
Business Summary
Taco John's International, Inc. operates and grants franchises for Taco John's Restaurants, which are quick-service establishments primarily serving Mexican food. These restaurants offer a diverse menu of traditional and cross-ethnic items for dine-in, carryout, or drive-thru service. Franchisees operate under the TACO JOHN'S® brand and utilize a standardized system for restaurant design, recipes, and operations. The franchise offers traditional restaurant models, including freestanding, endcap, and drive-thru focused DT Digital Olé buildings, as well as non-traditional locations in venues like airports and food courts.
Corporate History
The Taco John's concept was initially developed in 1969 by Woodson-Holmes Enterprises, Inc., which served as the predecessor to Taco John's International, Inc. Woodson-Holmes operated and franchised Taco John's Restaurants before merging into Taco John's International, Inc. in 1985. Since its incorporation in Wyoming on May 7, 1985, Taco John's International, Inc. has continued the business of operating and franchising Taco John's Restaurants. By the end of 2024, the brand had grown to 340 restaurant units across 22 states, predominantly franchised. In 2015, Taco John's International, Inc. expanded its offerings to include Area Development Agreements for multi-unit development.
Financial Overview
Investment Range
$390,000 - $2,120,000
Franchise Fee (High)
$40,000
Minimum Cash Required
$25,000
Royalty %
5%
Marketing %
4%
Equipment Costs (Low)
$235,000
Equipment Costs (High)
$997,000
Working Capital
$32,500
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
The independent auditor's report indicates that Taco John's International, Inc.'s financial statements for 2022, 2023, and 2024 present fairly, in all material respects, its financial position and cash flows, in accordance with generally accepted accounting principles. The auditors did not identify any conditions or events that would raise substantial doubt about Taco John's International, Inc.'s ability to continue as a going concern.
Financing Details
Taco John's International, Inc. does not offer any direct or indirect financing to its franchisees. Additionally, the franchisor does not guarantee any notes, leases, or other financial obligations of its franchisees.
Performance Metrics
Total US Locations
340
Franchised Units
333
Corporate Units
7
Avg Square Footage
1,529
Franchising Since
1985
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
Yes
Litigation Count
1
Litigation Summary
Taco John's International, Inc. has one active arbitration case. This case, filed on December 16, 2024, is against Bierschenk, Inc., Bierschenk-Worthington, Inc., and Todd A. Bierschenk. The arbitration was initiated by Taco John's International, Inc. to collect royalty payments from these franchisees and their guarantors.
Bankruptcy History
Taco John's International, Inc. discloses that its Chief Financial Officer, Richard Bundy, was the Senior Vice President and Chief Financial Officer of Christopher & Banks Corporation when that company filed for Chapter 11 bankruptcy reorganization in January 2021. Christopher & Banks Corporation is not affiliated with Taco John's International, Inc. Apart from this, Taco John's International, Inc. has no other bankruptcy history to report.
Agreement Terms
Initial Term
20 years
Renewal Term
10 years
Renewal Conditions
To renew their franchise agreement, Taco John's International, Inc. franchisees must comply with the existing Franchise Agreement and provide timely notice to the franchisor. They may be required to remodel, renovate, refresh, reimage, refurbish, and modernize their restaurant to meet current brand standards. Franchisees must pay a renewal fee, execute the franchisor's then-current Franchise Agreement and any ancillary agreements, and meet updated training requirements. The new agreement may have materially different terms and conditions from their original agreement.
Training & Support Program
Franchisor Assistance
Taco John's International, Inc. provides comprehensive assistance to its franchisees. Before opening, the franchisor helps with restaurant development by evaluating and accepting sites, providing conceptual floor plans and specifications for construction and equipment, reviewing construction documents, and holding new restaurant opening meetings and at least one construction inspection. Initial training is also provided for one owner and the required number of managers. During operation, Taco John's International, Inc. offers ongoing guidance, assistance, and additional training on how to manage the restaurant, provides access to the Operations Manual, and supplies marketing and promotional materials. The franchisor also offers guidance on pricing recommendations and permits the use of its Marks and Restaurant System.
Initial Training Hours
258
Training Location
Online, or a designated Taco John's Restaurant location, or the Restaurant Support Center in the Minneapolis, Minnesota metropolitan area
Ongoing Support
Taco John's International, Inc. provides ongoing support to its franchisees through various channels. This includes access to an online learning management system called The Olé! Way, which offers continuous training programs, webinars, and training materials for both franchisees and their employees. The franchisor may require management teams to attend additional training, including system-wide programs and targeted training for specific franchisees. Taco John's International, Inc. also conducts ongoing on-site training at restaurant locations as deemed appropriate and offers optional training programs and seminars. Franchisees or their designated Above Store Leaders are required to attend the annual Franchisee Convention.
Franchise Requirements
Ideal Candidate Profile
Taco John's is looking for qualified individuals or entities who possess strong business abilities and efforts. For Area Development Agreements, candidates must meet multi-unit development criteria. Prospective franchisees must also meet financial, creditworthiness, and operational criteria. An Operational Assessment helps predict a candidate's in-store operational disposition and temperament, including their ability to handle customer contact, learn the fundamentals of Mexican quick-service restaurant operations, understand the challenges and rigors of the food service industry, and comprehend basic store administrative leadership and management functions. Franchisees or an owner/manager are required to provide direct, on-premises supervision and devote full-time efforts to the restaurant's management. For transfers, new owners must demonstrate good moral character, business experience, aptitude, and financial resources. If the franchisee is an entity, the qualifying owner is generally required to maintain at least a 51% ownership interest.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Retail
Owner Participation
Full-Time
Territory Type
Limited
Territory Size Requirements
Taco John's International, Inc.'s Protected Territories are defined based on specific market variables of the premises, including demographics, density, market and development trends, traffic flow, and natural manmade boundaries. Non-traditional restaurants do not receive a Protected Territory.
Staffing Notes
Taco John's International, Inc. requires that during substantially all operating hours, the restaurant must be under the direct, on-premises supervision of an Active Certified Manager or the franchisee/owner who has completed the required training and devotes full-time efforts to management. Franchisees are responsible for recruiting, hiring, firing, and supervising their Above Store Leaders, Active Certified Managers, and other employees. A minimum of three (or four, if the owner/principal isn't operating) managers must complete the Management Certification Program to become Active Certified Managers. Taco John's International, Inc. also mandates that franchisees maintain a specific number of Active Certified Managers, as detailed in the Operations Manual, and are responsible for training their team members.