Fuzzy’s Taco Shop Franchise: $1.7M Revenue & High Profits

Despite being in a very competitive environment with various big players in the Mexican food restaurant industry, you should seriously consider Fuzzy’s Taco Shop as an option.

Indeed, we found that Fuzzy’s Taco Shop is one of the most profitable Mexican-style restaurant franchise. In addition to a 1.8x sales-to-investment ratio, Fuzzy’s also have a very good payback period.

Do you want to know how much profits you can make with this business? How much does it really costs? Let’s dive in!

Key stats

Franchise fee$40,000
Royalty fee5.0%
Marketing fee2.0%
Investment (mid-point)$979,000
Average sales$1,607,000
Sales to investment ratio3.0x
Payback period[franchise_value_investment_payback]
Minimum net worth$500,000
Minimum liquid capital$150,000
Source: FDD 2022

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What is Fuzzy’s Taco Shop?

Fuzzy’s Taco Shop is an American fast casual restaurant chain offering Baja-style Mexican cuisine. 

Founded in 2001 by Paul Willis, this brand offers delicious Mexican dishes, including nachos, tacos, quesadillas, salads, grilled sandwiches, breakfast dishes, and burritos. 

It is headquartered in Fort Worth, Texas, USA, where it rose from its humble beginnings on West Berry Street to become a highly rated fast-casual restaurant. 

Chuck and Alan Bush purchased the company in 2003 and began franchising in 2007. Today, the fast-casual restaurant chain is a subsidiary of Dine Brands Global and serves more than 150 locations in 17 US states.

Fuzzy’s Taco Shop franchises pros and cons

Pros

  • Small-space franchising format: the franchise can thrive in tight spaces. The reduced menu and customizable seating arrangement make owning a Fuzzy’s Taco Shop franchise accessible and affordable. 
  • Hands-on training: the franchisor is committed to helping restaurant owners operate successful franchises. It offers 297 hours of extensive, on-the-job training and 30 hours of classroom training to streamline business operations. Additional training takes place at company-owned stores to ensure franchisees have everything they need to run a successful business. 
  • Customization options: the franchisor allows franchisees to customize their restaurants to suit the target market. The much-needed flexibility helps restaurant owners stand out from the competition by delivering unique services and products.  
  • Exclusive territory rights: Fuzzy’s Taco Shop offers its franchisees exclusive territories. Franchisees are protected from other competitive brands operating in the same region. 
  • Marketing assistance: the franchisor has effective marketing strategies to help franchisees reach the target market. It offers a range of promotional tools such as ad templates, regional advertising, SEO, email marketing, and social media to help restaurant owners build a solid customer base. 
  • Financial assistance: Fuzzy’s Taco Shop offers financing via third-party sources to cover the franchise fee, equipment, startup costs, accounts receivable, inventory, and payroll. 

Cons

  • Minimum employee requirement: at least 25 employees to start and operate a successful franchise. 
  • No absentee ownership: Fuzzy’s Taco Shop isn’t a passive investment. Franchisees must participate in everyday operations from the physical stores. 
  • No part-time ownership: the franchise isn’t a part-time investment. Franchisees can’t combine the franchise with other business interests, and they must treat the new investment as a full-time, long-term commitment. 
  • Competition from other Mexican fast-casual restaurant chains such as QDOBA, Chili’s, Del Taco or even Taco John’s

How much does a Fuzzy’s Taco Shop franchise cost?

You would have to invest, on average, $902,300 to open a new Fuzzy’s Taco Shop franchise restaurant.

Note that this is the investment required to open a “traditional restaurant.” Indeed, the vast majority of restaurants are traditional (121 out of the total of 134 franchised restaurants).

To clarify, there are 2 main kinds of formats of restaurants you can choose: the Traditional restaurant, and Taqueria restaurant.

Here’s the full breakdown of costs per restaurant format:

Investment – Traditional restaurant

ExpenseAmount
Initial franchise fee$40,000
Leasehold improvements$252,000 – $530,000
Furniture, fixtures and signage$44,000 – $95,000
Equipment$112,500 – $267,000
Additional Funds 3 Months$20,000 – $70,000
Other$111,500 – $222,600
Total$580,000 – $1,224,600
Source: 2022 Franchise Disclosure Document

Investment – Taqueria restaurant

ExpenseAmount
Initial franchise fee$30,000
Leasehold improvements$150,000-$300,000
Furniture, fixtures and signage$8,000-$40,000
Equipment$75000-$150,000
Additional Funds 3 Months$20,000-$60,000
Other$87,500-$154,000
Total$370,500-$734,000
Source: 2022 Franchise Disclosure Document

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What is the annual turnover of a Fuzzy’s Taco Shop restaurant?

On average, a Fuzzy’s Taco Shop franchise makes $1,645,425 in sales per year.

This is the average sales per traditional restaurant for the 118 of the 134 franchised restaurants that were open for all of 2021.

How profitable is a Fuzzy’s Taco Shop restaurant?

On average, a Fuzzy’s Taco Shop franchise makes $338,958 profits per year. This corresponds to a 21% adjusted EBITDA margin. 

Fuzzy’s Taco Shop is a profitable franchise. We calculated this number using the information available in the Franchise Disclosure Document 2022. Fortunately, Fuzzy’s Taco Shop provides detailed information on the cost structure of its franchised-owned stores. 

Profit and lossAmount% sales
Sales$1,645,425100%
COGS($450,846)27.4%
Labor($542,990)33.0%
Rent($197,451)12.0%
Royalty + marketing fees($115,180)7.0%
Adjusted EBITDA$338,95821.0%
Source: Franchise Disclosure Document (2022)

Is a Fuzzy’s Taco Shop franchise a good investment?

So should you buy and open a new Fuzzy’s restaurant? We’ve done the math and it looks like Fuzzy’s is a very profitable investment.

Indeed, the sales to investment ratio (as in the annual turnover divided by the initial investment required to pay for startup costs) is 1.8x which is a very good number.

This, in addition to a 21% profit margin (15% net profit margin deducting other expenses like corporate taxes, debt interest, etc.), we found that the payback period for a Fuzzy’s Taco Shop is 3.7 years on average. This means that you would need to wait only 4 years for your restaurant profits to pay for the initial investment, that’s excellent.

If you’re considering opening a new Fuzzy’s Taco Shop franchised restaurant, make sure to prepare a rock-solid financial plan with your pro forma financial statements. Download our template, save yourself hours of work, and get funded.

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Disclaimer

Disclaimer: This content has been made for informational and educational purposes only. We do not make any representation or warranties with respect to the accuracy, applicability, fitness, or completeness of the information presented in the article. You should not construe any such information or other material as legal, tax, investment, financial, or other professional advice. Nothing contained in this article constitutes a solicitation, recommendation, endorsement, advertisement, or offer to buy or sell any franchises, securities, or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the franchise and/or securities laws of such jurisdiction.

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