Verified — real FDD extraction
Not found in the SBA Franchise Directory — SBA financing may be unavailable; verify with your lender
Taco Time
Food & Dining · independent · est. —
Taco Time is a quick-service Mexican restaurant chain serving tacos, burritos, and other Mexican-inspired fast food. A franchisee operates a counter-service restaurant, often with a drive-thru, serving local customers looking for a fast, affordable meal.
Taco Time net unit count declined -5.3% from 2014–2016 per its FDD Item 20.
New to franchising? Start here
A franchise is a business where you (the franchisee) pay a company (the franchisor) for the right to open and run a location using their brand and system — think a local Anytime Fitness or Taco John's owned by a small-business owner, not the corporation.
Before you can buy in, U.S. law requires the franchisor to give you a Franchise Disclosure Document (FDD) — a long legal filing covering its fees, finances, and history. The numbers on this page come straight from that document:
- Franchise fee — the one-time cost to buy in.
- Royalty — the ongoing cut of your sales you pay the franchisor.
- Item 20 — how many locations opened and closed, the basis for our verdict (from Proven & strong down to Distressed — or Too new to judge).
The verdict
Proven & steady
Distress
The operating record is solid, but the FDD discloses a bankruptcy history (Item 4) — capped below a full endorsement. The main concern in the record: too many owners are failing outright rather than selling.
Exit rate · latest year
3.5%
vs 8.2% across 146 food & dining systems
Cost to open
$145K–$814K
Item 7 total investment range
SBA loan defaults
No loan record
no SBA 7(a)/504 loans found for this brand
Behind the verdict
the record, factor by factor · Item 20
3-yr trend · Item 20 Table 1
terminations + ceased-ops vs. all exits · Table 3
transfers vs. base · Table 3
actual vs. projected openings · Table 5
Item 19 disclosure + completeness
Systemwide units
2014–2016
Survival record
FDD Item 20 · outlet status by year
In fiscal 2016, 5 of 144 franchised outlets left the system — a 3.5% annualized exit rate, vs 8.2% across 146 food & dining systems. Not every exit is a failure — but this is the measurable floor.
Show the outlet tables ↓Hide the evidence ↑
| Status (FTC) | 2014 | 2015 | 2016 |
|---|---|---|---|
| Outlets at start | 156 | 150 | 144 |
| Opened | 9 | 3 | 3 |
| Transfers | 0 | 3 | 0 |
| Terminations | 0 | 0 | 1 |
| Non-renewals | 0 | 0 | 1 |
| Reacquired by franchisor | 0 | 0 | 0 |
| Ceased — other reasons | 6 | 5 | 3 |
| Outlets at end | 150 | 144 | 142 |
| Net change | -6 | -6 | -2 |
What it costs — and what it drags
FDD Items 5–7 · fees, investment, royalty
Buying in means a $30K franchise fee (Item 5) and a total investment of $145K–$814K (Item 7). The franchisor publishes an earnings claim (Item 19) — read its methodology closely.
To open (Item 7)
$145K–$814K
all-in investment range
Franchise fee (Item 5)
$30K
upfront, one-time
Royalty (Item 6)
6%
of sales, ongoing
Your figure — cross-check against this brand's Item 19 and current-owner validation.
Royalty you'd pay / yr
$60K
6% of sales, before profit
Over a 10-yr term
$600K
royalties alone, excl. ad fund
This is not profit. It's the only money the FDD actually pins down — what you put in, and the royalty you owe on every dollar of sales. Your real take-home depends on labor, rent, food cost, and ramp-to-breakeven, none of which any FDD discloses.
Build a real pro-forma for Taco Time with an independent CPALabor record
US Dept. of Labor enforcement · franchisee-level · FY2005–present
Federal investigators have concluded 14 wage cases against operators of this system, recovering $529 in back wages for 14 workers, including 13 child-labor cases. Some of these cases are recent, not ancient history. These cases name franchisee-owned locations, not the franchisor itself.
Concluded cases
14
Back wages owed
$529
Employees affected
14
Since 2020
1
13 of these cases involved child-labor violations, covering 92 minors across the system's franchised locations.
Read this carefully. The employers in these cases are individual Taco Time franchisees — separately owned businesses operating under the brand name — not Taco Time itself. The franchisor is not the respondent and in most cases is not a party. What the record shows is how this system's operators run their payrolls, which is worth knowing before you become one of them. Counts rise with system size and with age: a 20-year-old, 10,000-unit system will out-count a young one regardless of conduct. Source: DOL Wage and Hour Division concluded compliance actions, FY2005–present, most recent finding 2023.
Distress signals
news-sourced · bankruptcies, closures, lawsuits
Tillamook Taco Time closes, makes way for Oregon Coast Bank
news:Tillamook Headlight-Herald · 2mo ago
Business tidbits: Taco Time closures and new poke shop in Sunnyside
news:Yakima Herald-Republic · 14mo ago
Why Seattle lost its mind over the Wallingford Taco Time closure
news:Cascade PBS · 25mo ago
9 questions to ask a Taco Time franchisee
Built from this brand's own disclosures · take it to your validation calls
The franchisor will give you a list of owners to call. Most buyers ask whether they like it. These are the questions built from what Taco Time has actually disclosed — each one carries the number it came from, so you can tell whether the answer squares with the record.
- 01
Taco Time’s own Item 20 shows 5 of 144 franchised outlets left the system in fiscal 2016 — about 3.5%. Do you know any of those owners, and do you know why they left?
A franchisor will call these “transitions.” An owner three doors down usually knows whether they sold at a profit or handed the keys back.
FDD Item 20 · FY2016
- 02
The system went from 150 units to 142 over 3 disclosed years. What's the explanation you've been given, and do you believe it?
A shrinking system means fewer owners funding the ad fund and support staff you're paying for.
FDD Item 20 · FY2014–FY2016
- 03
You pay 6.0% royalty on gross sales, plus the ad fund, before any of your own costs. On your actual revenue last year, what did you take home as the owner — not revenue, take-home?
Royalty is charged on sales, not profit. This is the number the brochure never shows and the one your life actually runs on.
FDD Item 6
- 04
Taco Time makes an earnings claim in Item 19. Does your unit look like that number — and do you know which units they included to build it?
Item 19 is legal to build from a flattering subset. Ask whether they excluded new units, closed units, or company stores.
FDD Item 19 · 2017
- 05
How many months did it take to cover your own costs, and how much cash did you burn getting there?
Ramp-to-breakeven working capital is the most underestimated line in any franchise purchase, and the most common reason otherwise-good units fail.
Not disclosed in any FDD — ask an owner
- 06
Item 3 discloses 65 legal matters. Do you know what those were about, and were any brought by franchisees?
Franchisee-brought suits over territory, fees or support tell you how the franchisor behaves when there's a disagreement.
FDD Item 3 · 2017
- 07
What does the franchisor charge for that you didn't expect — required tech fees, mandatory remodels, approved-supplier pricing?
Required spending appears across Items 6, 8 and 11 rather than in one place, so buyers routinely miss the total.
FDD Items 6, 8, 11
- 08
If your agreement came up for renewal tomorrow at current terms, would you sign again?
The single most predictive question you can ask. A hesitation is the answer.
Ask every owner you speak to
- 09
Who else should I call — including someone who left?
The franchisor's list is curated by definition. Former franchisees are where the unflattering truth lives, and current owners usually know how to reach them.
Ask every owner you speak to
Want this as a checklist you can take to the calls?
I'll email you the printable version, and tell you if Taco Time’s numbers move — a new filing, a rising exit rate, a distress signal. Unsubscribe in one click.
A broker is paid by the franchisor to place you. I'm paid by you — and the job is pressure-testing Taco Time's numbers, including talking you out of a bad deal.
This page is what buyers see before they call you for validation. If the record above is wrong — or right in a way the numbers can't show — say so. Corrections are checked against the filings; nothing you write is published with your name unless you agree to it.
Taco Time franchise questions, answered from the filings
What percentage of Taco Time franchises closed last year?
In Taco Time's latest FDD Item 20 (fiscal 2016), 5 of 144 franchised outlets left the system — an annualized exit rate of 3.5% — compared with 8.2% across 146 food & dining systems tracked here. That counts terminations, non-renewals, and "ceased operations — other reasons." There is no official failure rate, and not every exit is a failure, but this is the measurable floor.
How much does a Taco Time franchise cost?
Per Taco Time's 2017 FDD, buying in requires an initial franchise fee of $30K (Item 5) and a total initial investment of $145K–$814K (Item 7).
What royalty does Taco Time charge?
Taco Time charges an ongoing royalty of 6.0% of gross sales, per Item 6 of its 2017 FDD.
Does Taco Time disclose earnings (Item 19)?
Yes — Taco Time makes a financial performance representation in Item 19 of its 2017 FDD. Read it closely: franchisors choose which units and which metrics to include.