FDD Talk 2017: What You Need to Know About the Pancheros Mexican Grill Franchise Opportunity (Financial Performance Analysis, Costs and Fees)

In this FDD Talk 2017 post, you’ll learn the following:

• Section I – Background information on the Pancheros Mexican Grill franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Pancheros Mexican Grill franchise, based on Item 7 of the company’s 2017 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Pancheros Mexican Grill franchise, based on Items 5 and 6 of the company’s 2017 FDD

• Section IV – Presentation and analysis of Pancheros Mexican Grill’s financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:

• 2016 average, high, low, and median gross sales for all 49 Pancheros Mexican Grill restaurants (26 franchised restaurants and 23 affiliate-owned restaurants that the franchisor operated under a management agreement) in operation for the entire three calendar years 2014 to 2016, excluding two restaurants that are located in shopping malls

• 2016 average, high, low, and median gross sales for the 26 franchised Pancheros Mexican Grill restaurants in operation for the entire three calendar years 2014 to 2016

• 2016 average, high, low, and median food and paper costs (separately stated) for the 25 affiliate-owned Pancheros Mexican Grill restaurants that the franchisor operates, that were in operation for the full 12 months of 2016

Section I – Background Information

12 Things You Need to Know About the Pancheros Mexican Grill Franchise

Entering the Jacksonville, Florida Market

1.  Pancheros Mexican Grill will be entering the Jacksonville, Florida market in a busy area of the city. This initial location is the first of three planned locations to be opened by franchisee Joe Logan. Logan says that he had been scouting for the perfect location for 18 months. The spot he chose is on a busy corner in an active shopping area near the area’s beaches.

2.  Logan hopes to open this first location sometime in May and plans to open the next two locations within the next five years. This Jacksonville location will be the second Pancheros Mexican Grill in Florida.

Supported 250-Mile Run for Leukemia

3.  Last year, Pancheros Mexican Grill announced that it would be partnering with Ryan Wade’s One Step at a Time initiative. In an effort to raise money for the Leukemia & Lymphoma Society (L.L.S.), Wade pledged to run a total of 250 miles through the state of Iowa.

4.  Pancheros donated a significant amount of money to the cause and also provided a wrapped support vehicle for the whole run. Wade also made a pit stop at a Pancheros in Iowa City to refuel for the rest of his race.

5.  According to Rodney Anderson, President of Pancheros Mexican Grill, Wade served as an inspiration to everyone at Pancheros and the company was honored to support him in his mission to help find a cure.

Launches Loyalty Rewards App

6.  Early last year, Pancheros launched its system-wide rewards program, “Burritos with Benefits.” The program rewards customer loyalty by allowing customers to earn 1 point for each $1 spent on any menu item, excluding alcohol. When customers rack up 100 points, they can redeem their points for their choice of any of the restaurant’s five main menu items.

7.  The new rewards program is modeled off of the company’s old card-based program, but uses an app to make the process easier for customers. The app is available on both the Android and Apple app stores and is free to use.

8.  Customers without smartphones are still able to participate in the rewards program by signing up on the company’s website and uploading their receipt information to their account. To redeem rewards, a customer can bring in a printed QR code or a 7-digit pin to the register.

Company History

9.  Pancheros Mexican Grill was founded in 1992 by Rodney Anderson when he opened two locations: one in Iowa City, Iowa and the other in East Lansing, Michigan. Over the next few years, Anderson continued to open locations in other Midwestern college towns.

10.  In 1998, the company added a dough-press to all of its locations in order to produce fresh tortillas daily. The first non-corporate location opened in 2003.

11.  Despite being in business for over 20 years, Panchero’s growth has remained moderate and its locations are found mostly in the Midwest. Today, there are nearly 70 Pancheros Mexican Grill locations in the U.S.

Entrepreneur’s Franchise 500

12.  Pancheros Mexican Grill has earned a spot on Entrepreneur’s annual Franchise 500 list a few times in the last decade. The company’s highest rank was No. 311 in 2015 while its lowest rank was No. 408 in 2016.

Section II – Estimated Costs

• Please click here for detailed estimates of Pancheros Mexican Grill franchise costs, based on Item 7 of the company’s 2017 FDD (updated).

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

• Please click here for detailed information on Pancheros Mexican Grill’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2017 FDD.

Section IV – Financial Performance Representations (Item 19, 2017 FDD) and Analysis