About District Taco Franchise
District Taco is a fast casual Mexican restaurant franchise that brings authentic Yucatan inspired cuisine to the East Coast dining scene.
Backed by District Brands, Inc., the brand has been franchising since 2021 and is known for its fresh, made to order tacos, burritos, bowls, and breakfast items featuring traditional Yucatan flavors.
The franchise fee is $25,000.
District Taco Franchise Cost & Fees
Minimum Investment
$799K
Average Investment
$1.2M
Maximum Investment
$1.7M
| Fee Type | Amount | Notes |
|---|---|---|
| Initial Franchise Fee | $25,000 | One-time payment upon signing |
| Royalty Fee | 6% of Gross Sales of gross sales | Ongoing; paid monthly |
| Marketing/Ad Fund | If established, 2% of your DT Restaurant’s Gross Sales (Innovation Fund contribution); If established, the amount the cooperative periodically establishes, subject to the Marketing Spending Requirement (Advertising Cooperative contributions); Difference between Marketing Spending Requirement and amount you spent (Marketing Spending Requirement shortfall) | National brand fund |
| Total Investment Range | $798,750 – $1,667,750 | Includes build-out, inventory, working capital |
The investment range of $799K–$1.7M reflects variability in build-out costs, store size, lease terms, and market. The combined royalty (6% of Gross Sales) and marketing fee (If established, 2% of your DT Restaurant’s Gross Sales (Innovation Fund contribution); If established, the amount the cooperative periodically establishes, subject to the Marketing Spending Requirement (Advertising Cooperative contributions); Difference between Marketing Spending Requirement and amount you spent (Marketing Spending Requirement shortfall)) are ongoing costs paid as a percentage of gross sales.
Investment Breakdown (Item 7)
| Item | Low | High |
|---|---|---|
| Initial franchise fee | $25,000 | $25,000 |
| Leasehold improvements | $500,000 | $1,000,000 |
| Architect/Engineer Costs | $20,000 | $30,000 |
| On-site Evaluations | $0 | $500 |
| Restaurant Assets | $165,000 | $355,000 |
| Signage | $15,000 | $25,000 |
| 3 months’ rent | $22,500 | $75,000 |
| Security deposit | $7,500 | $50,000 |
| Opening inventory and supplies | $10,000 | $20,000 |
| Office and business supplies | $1,000 | $5,000 |
| Grand opening marketing | $5,000 | $10,000 |
| Training expenses | $6,000 | $14,000 |
| Miscellaneous opening costs | $0 | $1,000 |
| Utility deposits | $0 | $10,000 |
| Business licenses, including liquor license | $1,000 | $20,000 |
| Insurance | $750 | $2,250 |
| Additional Funds – 3 months | $20,000 | $25,000 |
Additional Fees (Item 6)
| Fee Type | Amount |
|---|---|
| Transfer Fee | $5,000 |
| Renewal Fee | The initial franchise fee under the then-current form of Franchise Agreement |
| Technology Fee | Our reasonable costs, currently $100 but could increase if our costs increase (Website and mobile app fees) |
| Audit Fee | Cost of audit (currently estimated at $5,000) |
| Development deadline extension fee | $10,000 |
| Site Consultation | $250 per hour (after 2 free hours) |
| Costs and attorneys’ fees | Will vary under circumstances |
| Indemnification | Will vary under circumstances |
| Ongoing training fees | Currently $0 to $5,000 per year |
| Additional Assistance | $250 an hour per person, plus per diem and travel expenses |
| New product or supplier review fee | Currently, $5,000 |
| Unapproved products and services | $250 per day |
| Transfer fee | $5,000 |
| Management fee | 3% of Gross Sales plus direct costs and expenses |
| Relocation | Currently $7,500 |
| Inspections | Currently $5,000 plus travel expenses |
| Interest | The lesser of (i) 1% per month or (ii) the maximum rate allowed by applicable law |
| Insurance costs | Premiums plus our costs and expenses |
| Late Payment or Reporting Fee | $50 per day |
| Liquidated Damages | Average monthly Royalties and Innovation Fund contributions during the 12 months before termination (or shorter period) multiplied by 36 or remaining term, whichever is less |
| Public Offering Fee | $5,000 |
| Taxes | Will vary under circumstances |
| Gift card program | $50 per month |
Training Program (Item 11)
| Detail | Information |
|---|---|
| Total Duration | 160 hours |
| Classroom Training | 46 hours |
| On-the-Job Training | 114 hours |
| Training Location | Our headquarters in Falls Church, Virginia and a designated District Taco Training Restaurant. |
| Additional Training | We may require you and/or your personnel to attend and satisfactorily complete various training courses and programs and evaluation programs that we choose to provide periodically at the times and locations we designate. Your personnel whom we reasonably specify periodically also must attend any conventions or other programs that we periodically specify for some or all District Taco Restaurants. We may charge reasonable fees for these training courses, programs and conventions, currently $0 to $5,000 per year. Additional or special guidance, assistance or training (including consultation and advice concerning operation, advertising, marketing, and accounting) is available at $250 an hour per person, plus per diem and travel expenses. |
Territory Rights (Item 12)
| Detail | Information |
|---|---|
| Territory Type | Protected |
| Exclusive Territory | No |
| Territory Size | Your Primary Area of Responsibility will be limited to either (a) the contiguous property controlled by the landlord within which your DT Restaurant is located, if applicable, or (b) if your DT Restaurant is not located within such a contiguous property, the Site. The Primary Area of Responsibility will be smaller than the Site Selection Area. Your Primary Area of Responsibility may be as small as the specific physical space occupied by your DT Restaurant or the shopping center in which your DT Restaurant is located. |
| Description | Franchisees operate at a specific site within a designated 'Site Selection Area'. Once a lease is signed, a 'Primary Area of Responsibility' is defined, which is protected from other traditional District Taco Restaurants. However, the franchisor retains the right to operate or authorize others to operate District Taco Restaurants at 'Non-Traditional Locations' within this area, and to engage in any other business activities outside the Primary Area of Responsibility or with other brands. Continuation of territorial rights depends on meeting minimum sales performance levels. |
Renewal, Termination & Transfer (Item 17)
| Detail | Information |
|---|---|
| Initial Term | 10 years |
| Renewal Term | 10 years |
| Renewal Fee | The initial franchise fee under the then-current form of Franchise Agreement |
| Renewal Conditions | To renew, franchisee must provide written notice 6-12 months before term end, be in material compliance with all agreements, demonstrate right to maintain possession of site for at least 10 years, and renovate/remodel the DT Restaurant to meet then-current requirements for new similarly situated District Taco Restaurants. Franchisee must also sign the then-current form of franchise agreement and a general release. |
| Transfer Fee | $5,000 |
| Transfer Conditions | Transfers require franchisor approval. Conditions include: franchisee compliance with all agreements, 30-day prior written notice with all requested information, signing a general release, transferee and owners meeting franchisor standards (no competitive business interests), transferring owners agreeing to non-compete/confidentiality, transferee management completing training, transferee repairing/replacing assets and upgrading the restaurant/site, transferee agreeing to current or then-current franchise agreement terms, payment of transfer fee, and franchisor determining purchase price/terms won't adversely affect operation. Franchisor has a right of first refusal. |
| Termination for Cause | Franchisor may terminate for various causes, including material misrepresentation, failure to complete training, failure to secure site/lease/open on time, abandonment, unauthorized transfer of control, felony conviction, dishonest/unethical/illegal conduct affecting reputation, failure to maintain insurance, interference with inspections/audits, unauthorized transfer, failure to achieve Performance Standards for 2 consecutive years, termination of another agreement, breach of non-compete/confidentiality, failure to pay taxes/suppliers/lenders, repeated defaults (3+ in 12 months, or 2+ of same in 6 months, or 3+ of same in 36 months), bankruptcy-related events, or failure to pay amounts due within 5 days of notice, or failure to cure any other breach within 30 days of notice. |
| Non-Compete Period | 2 years |
| Non-Compete Details | Upon expiration (without renewal) or termination (except by franchisee for franchisor's material breach), for two years, the franchisee and its owners (and immediate family) cannot have any direct or indirect ownership interest in, or perform services for, a Competitive Business (defined as generating 25%+ revenue from Latin/Mexican food) at the Site, within a 25-mile radius of the Site, or within a 25-mile radius of any other District Taco Restaurant then operating or under construction. This period is automatically extended for any non-compliance. |
Operations & Supply (Items 8 & 15)
| Detail | Information |
|---|---|
| Owner-Operator Required | Yes |
| Participation Details | The franchisee must operate the DT Restaurant for the entire term. An 'Operating Principal' (the individual franchisee, or a designated and approved individual for an entity) must devote sufficient time and attention to the operation and management of the DT Restaurant and serve as the primary point of contact. A 'General Manager' (who can be the Operating Principal or another approved individual) must devote substantially all business time to on-premises management. All owners must sign a personal guaranty. |
| Required Suppliers | You must purchase or lease all Restaurant Assets and other products and services for your DT Restaurant only according to the DT Standards and, if we require, only from suppliers or distributors that we designate or approve, which may include or be limited to us or our affiliates. Specifically, all signage and advertising materials, salsas and marinated meats, and all other food and beverage products that we periodically specify as being mandatory must be purchased from us or our affiliate. You must also use the design company and/or other contractor whom we designate or approve to design and/or develop your DT Restaurants. Certain food items, alcoholic and other beverages, supplies, smallwares, largewares, chemicals, hot sauces, and retail merchandise must be purchased only from a designated or approved supplier. Food, beverages and operating supplies must be bought through our approved distributor and under the distribution agreement we negotiated. We may also require you to contract with one or more suppliers that we designate or approve to develop and/or implement Local Marketing. |
| Supply Restrictions | The franchisor reserves the right to periodically designate and approve standards, specifications, suppliers and/or distributors. Purchases and leases from franchisor/approved suppliers/DT Standards represent approximately 95% of total purchases in establishing and 98% in operating. The franchisor may limit the number of approved suppliers, designate exclusive sources (which may be the franchisor or its affiliate), and refuse requests for new suppliers if an exclusive source is already designated or if it's not in the best interest of the network. Franchisees must accept and fulfill orders from franchisor-specified Order Intake Systems. |
| Franchisor Revenue from Suppliers | Neither we nor our affiliates received any revenue from selling products or services to District Taco Restaurant franchisees during 2021. However, we expect to derive revenue from providing advertising materials and other branded items to franchisees in the future. We also expect to receive payments from suppliers based on franchisees’ purchases from those suppliers in the future, which we currently plan to contribute to the Innovation Fund, but this plan may change. |
Financing (Item 10)
| Detail | Information |
|---|---|
| Financing Available | No |
| Description | We do not offer direct or indirect financing. We do not guarantee your note, lease or other obligations. |
District Taco Franchise Earnings — Item 19
Average Revenue
$1.7M
Median Revenue
$1.5M
Revenue Range
$1.1M – $2.5M
Sample Size
11 units
Past financial performance does not guarantee future results. Individual results will vary.
District Taco Litigation & Risk Flags
Clean Litigation RecordDistrict Taco has no pending litigation actions listed in their FDD. There is also no bankruptcy history disclosed.
Litigation and bankruptcy data is sourced from Items 3 and 4 of the FDD. Always verify current status directly from the most recent FDD.
District Taco System Growth
Total Units
15
Franchised
0
Company-Owned
15
District Taco currently operates 0 franchised locations and 15 company-owned units. Unit count data is sourced from Item 20 of the FDD.
Unit History (Item 20)
| Year | Opened | Closed | Total |
|---|---|---|---|
| 2019 | 2 | 0 | 14 |
| 2020 | 0 | 0 | 14 |
| 2021 | 1 | 0 | 15 |
Transfers: 0 | Closures: 0
State Registrations
Registered in 14 states: CA, HI, IL, IN, MD, MI, MN, NY, ND, RI, SD, VA, WA, WI
Franchisor Financials (Item 21)
0
Net Income
$-120,032
Total Assets
$153K
District Taco Franchise — FAQ
The total investment to open a District Taco franchise ranges from $798,750 to $1,667,750, per their Franchise Disclosure Document. This includes the initial franchise fee of $25,000. The investment covers build-out, inventory, equipment, signage, working capital, and other startup costs.
District Taco charges a royalty fee of 6% of Gross Sales of gross sales, plus a If established, 2% of your DT Restaurant’s Gross Sales (Innovation Fund contribution); If established, the amount the cooperative periodically establishes, subject to the Marketing Spending Requirement (Advertising Cooperative contributions); Difference between Marketing Spending Requirement and amount you spent (Marketing Spending Requirement shortfall) contribution to the marketing/advertising fund. These fees are paid on an ongoing basis.
You can download the District Taco Franchise Disclosure Document free on this page. The FDD is a public document filed with state franchise registries. Always also request the current FDD directly from District Taco to ensure you have the most up-to-date version.
According to the Item 19 financial performance representation in their FDD, District Taco franchise owners report average revenue of $1.7M and median revenue of $1.5M. This is based on a sample of 11 units. Past performance does not guarantee future results.
District Taco has been franchising since 2021. The FDD shows an investment range of $798,750-$1,667,750, a 6% of Gross Sales royalty, and includes an Item 19 earnings disclosure. There is no pending litigation. Review the full FDD and contact current franchisees listed in Item 20 before making any investment decision.
The franchise fee is $25,000 and the total investment ranges from $798,750 to $1,667,750 depending on location size and market. Contact the franchisor directly for current net worth and liquid capital requirements, territory availability, and application details.
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Data Source & Disclaimer: This website is for informational purposes only. It is not an offer to sell or buy a franchise. This profile is based on publicly available FDD data sourced from state franchise registry filings. All information is for research purposes only and does not constitute legal, financial, or investment advice. Data may be outdated or contain errors. Always obtain the current FDD directly from District Taco and consult a qualified franchise attorney before making any investment decision. FranchiseOverview.com is operated by Franchising Compliance, LLC and is not affiliated with District Taco or any of its subsidiaries. To report an inaccuracy: info@franchiseoverview.com