In this FDD Talk 2016 post, you’ll learn the following:
- Section I – Background information on the Chronic Tacos franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Chronic Tacos franchise, based on Item 7 of the company’s 2016 FDD
- Section III – Presentation and analysis of Chronic Tacos’ financial performance representations, based on Item 19 of the company’s 2016 FDD, including information on the:
- 2015 average gross sales for the top 25%, bottom 25%, and all 18 franchised Chronic Tacos restaurants that were open for 3 years or more as of December 31, 2015 and that provided unaudited data that the franchisor believes is complete, accurate, and reliable
- 2014 average gross sales for the top 25%, bottom 25%, and all 16 franchised Chronic Tacos restaurants that were open for 2 years or more as of December 31, 2014 and that provided unaudited data that the franchisor believes is complete, accurate, and reliable
- 2013 average gross sales for the top 25%, bottom 25%, and all 16 franchised Chronic Tacos restaurants that were open for 1 year or more as of December 31, 2013 and that provided unaudited data that the franchisor believes is complete, accurate, and reliable
Section I – Background Information
Randall L. Wyner and Daniel A. Biello were tired of not having the right combination of freshly made-to-order Mexican food in a good hang-out environment, so they took matters into their own hands and set about to create something new. Using third-generation recipes from a family friend, they opened the first Chronic Tacos location in Newport Beach, CA, just in time for the city’s Fourth of July celebration of 2002.
The concept proved to be a big hit, so in 2005 they opened a second location in Huntington Beach featuring beer and wine, pool tables, and better seating for a real kick-back experience. The year 2006 saw the opening of a third location in San Clemente to long lines of people waiting to get in and experience the magic. Franchising began that year as well.
Then along came a quartet of brothers, Michael, Dave, Dan, and Joey Mohammed, in 2012. They helped finance the first Canadian location and liked it so much they bought the company through their family-owned Calivan Enterprises.
The number of locations has bounced around a bit. Back in 2011, there were 36 locations, then in 2013 it dropped to 28. It has recently begun to recover, currently at 32, two of which are company-owned and three of which are located outside the U.S.
Here’s how Chronic Tacos keeps hungry consumers chronically engaged with its made-to-order Mexican food:
The ordering process involves three easy steps: Step one is choosing your base (taco, burrito, small burrito, bowl-rito, tostada bowl, chronic salad, quesadilla, or torta); step two is choosing your protein from among pollo asado (marinated grilled chicken), carnitas (slow-cooked pork), al pastor (spicy adobo pork), carne asada (marinated grilled steak), fish/shrimp (beer-battered or sautéed), or vegetarian (veggies, rice, beans, and guacamole); step three is choosing what else you want.
There are specialty items such as potato tacos, taquitos, flautas, chronic fries, chronic nachos, and churro bites for dessert. Breakfast items are also available, including breakfast burritos and tacos.
A Family Affair
In the hands of the Mohammed brothers, Chronic Tacos has become a family affair where each brother pitches in where they do best: Michael on strategic marketing and financing (CEO/CFO), Dave helps with marketing, Dan handles business development, and Joey works on design.
Their biggest challenge has been addressing the fact that without rigorous systems in place, each location was essentially running itself as a mom-and-pop shop. With that taken care of, the brand is poised for more rapid expansion.
All You Can Eat?
Chronic Tacos sponsors a taco-eating contest each year. 2016’s sixth annual contest is co-sponsored by hot sauce brand Gringo Bandito and is scheduled for July 29 at Palms Pool & Dayclub during its Ditch Fridays event.
Amateurs compete for bragging rights and cash prizes. The professional tier competition draws eaters from around the world like Takeru Kobayashi of Japan, who won last year’s competition and set a new Guinness World Record by eating 140 tacos in less than 10 minutes.
Section II – Estimated Costs
- Please click here for detailed estimates of Chronic Tacos franchise costs, based on Item 7 of the company’s 2016 FDD (updated).