Does Cilantro Taco Grill provide assurance that franchisees will earn as much as some outlets?

According to Cilantro Taco Grill's 2024 Franchise Disclosure Document, the franchisor does not provide any assurance that franchisees will earn as much as some outlets. While some outlets have achieved certain earnings, the document explicitly states that individual results may vary, and there is no guarantee of similar financial performance. Specifically, 5 of the 13 outlets (38%) exceeded the average gross sales. The median outlet had 2023 Gross Sales equal to $1,068,975.94.

This disclaimer is a standard practice in franchising, as a franchisee's success depends on numerous factors, including location, management skills, local market conditions, and the franchisee's ability to follow the Cilantro Taco Grill system. The FDD includes financial performance representations based on affiliate-owned outlets that have been open for at least 12 months, providing potential franchisees with some insight into possible financial outcomes. The average gross sales for these outlets was $1,441,657.51 with sales per square foot averaging $1,083.58.

However, the FDD also notes that these affiliate-owned outlets differ from franchised outlets in that they do not pay royalty fees, worldwide creative marketing fees, or expend any minimum amount on local advertising, and are not subject to territorial advertising or service restrictions. These differences could impact the financial performance of franchised locations. Prospective franchisees should carefully consider these factors and conduct their own independent research and due diligence before investing in a Cilantro Taco Grill franchise. They should also inquire about the written substantiation for the financial performance representation, which Cilantro Taco Grill will make available upon reasonable request.