Qdoba Mexican Eats Franchise Costs, Fees & FDD

Year Business Began: 1995

Franchising Since: 1997

Headquarters: San Diego, California

Estimated Number of Units: 780

Franchise Description: The franchisor is Qdoba Franchisor LLC. The franchisor grants franchises for the operation of quick-service or fast-casual Mexican restaurants under the service mark “Qdoba,” and variations on that mark. Guests can customize their burritos, bowls, tacos, salads, quesadillas, and nachos to fit their personal tastes with a variety of proteins, salsas, and toppings. All restaurants offer chips, a variety of dips, including queso and fresh guacamole, and a wide selection of fountain and bottled drinks. Some restaurants serve breakfast or may sell beer and wine, and other alcoholic beverages.
Training Overview: The designated operator (DO), general manager and a third person designated by franchisees (such as an assistant manager) must attend the training programs. The DO program is scheduled based on need, is approximately seven weeks (315 hours) long, contingent on experience and speed to proficiency, and begins with an orientation at a certified franchise training location to be determined by the franchisor. Of the 315 hours, almost all of that time is spent in a restaurant. The DO must attend on-the-job training at a certified training restaurant. The general manager program is scheduled based on need, is approximately seven weeks (315 hours) long, contingent on experience and speed to proficiency, and begins with an orientation at a certified training location to be determined by the franchisor. Of the 315 hours, almost all of that time is spent in a restaurant. The third person should complete training at least 12 weeks before the restaurant opens. The DO, general manager and/or certain other employees must attend such refresher courses, seminars and other training programs as the franchisor may reasonably require from time to time.

Territory Granted: The Franchise Agreement grants franchisees the right to operate a single Qdoba restaurant at a specific, accepted location. Except at certain non-traditional locations, the Franchise Agreement grants franchisees certain territorial rights in a geographic radius referenced in an exhibit to the Franchise Agreement. The protected geographic territory (protected territory) will generally be a radius of two miles from the franchised restaurant, but may be a different radius that the franchisor agrees to before it signs the Franchise Agreement. During the term of the Franchise Agreement, the franchisor will not, without the franchisee’s consent, establish or franchise another to establish, a new Qdoba restaurant at any location that falls within the protected territory, except as provided in the Franchise Agreement. The franchisor may sell products and services within the protected territory, provided that such sales are through channels of distribution that are dissimilar to those of the franchisee.

Obligations and Restrictions: Except certain non-traditional restaurants, if franchisees have more than one Qdoba franchised restaurant, they must at all times be under the full-time supervision of a designated operator (DO) and a general manager (unless otherwise approved by Qdoba). The DO must have at least three years of multi-unit experience in the operation of a casual-dining, fast-food, family-dining or cafeteria-style restaurant, and must be approved by the franchisor. The person who is responsible for the day-to-day supervision of the restaurant must assume such responsibilities on a full-time basis, and may not engage in any other business or other activity, directly or indirectly, that requires any significant management responsibility, time commitments, or otherwise may conflict with the obligations under the Franchise Agreement. Franchisees must use the restaurant premises solely for the operation of a Qdoba restaurant. Franchisees must sell or offer for sale only such menu items, products or services (including catering and delivery services) that the franchisor has expressly approved, and may not offer or sell other products or services at or from the restaurant.

Term of Agreement and Renewal: The length of the initial franchise term is typically 10 years, but the term may be shorter if the property cannot be secured for 10 years. If franchisees are not in default, and remodel the restaurant and meet certain other requirements, they can enter into a new agreement for an additional term for an additional fee.

Financial Assistance: The franchisor does not offer financing in connection with the establishment or operation of new franchised restaurants. The franchisor does not guarantee a franchisee’s lease or any note or other obligation the franchisee may incur. According to the franchisor, the Franchise Agreement gives it a first-priority security interest in the business assets of the franchisee’s Qdoba restaurant in order to secure payment of all amounts that the franchisee may owe to the franchisor under the Franchise Agreement and any other agreements the franchisee may have with the franchisor. Granting the franchisor a security interest in these assets may impair the franchisee’s ability to obtain financing from other potential lenders. In order to facilitate efforts to obtain financing, the franchisor may agree to subordinate its security interest to the security interest of another lender, but only under certain conditions.

Estimated Initial Investment

Name of Fee	Low	High
Franchise Fee	$20,000	$40,000
Development Costs: Plans, Legal Fees, Permits	$10,000	$50,000
Leasehold Improvements	$75,000	$525,000
Furnishings, Fixtures and Equipment	$83,000	$330,000
Signage	$8,000	$35,000
IT and Other Systems	$0	$101,000
Opening Inventory	$5,000	$10,000
Travel and Living Expenses While Training	Varies
Miscellaneous Pre-Opening Expenses	$5,000	$15,000
Grand Opening Advertising (at traditional sites)	$0	$25,000
Insurance (excluding several types of coverage)	$5,000	$10,000
Liquor License	Varies depending on location
Real Property Lease/Purchase Costs	Varies depending on location
Business Licenses, Health Permits and Similar Permits (varies depending on location)	$500	$3,000
Additional Funds – 3 months	$25,000	$150,000
ESTIMATED TOTAL (excluding real property and liquor license costs)	$236,500	$1,294,000

 
Other Fees

Type of Fee	Amount
Royalty	5% of gross sales.
Marketing Fee	Currently 2.75% of gross sales for franchisees and 1.75% of gross sales for licensees.
Local Advertising	Currently 1.25% of gross sales.
Lease Administration Fee	$100
Technology Support License and Installation	$199
Technology Support Project Management and Database Configuration	$2,250
IT Base Services	$5,600 - $14,000 per restaurant per year.
IT Project Services	$300 to $500 per restaurant + project costs.
IT Support Services	Currently $250 per restaurant per period plus 0.21% of weekly gross sales (but the franchisor can modify this fee).
Q-Cash Card Program Fees	$7.75 monthly.
License Activation Fees	$549
Interest on Late Payments	18% annum.
Audit	Cost of audit (plus 18% or the maximum rate permitted by law, whichever is less, on unpaid amounts).
Transfer	Up to $5,000.
Renewal Fee	Greater of 15% of the then-current franchise fee or $5,000.
Relocation Fee	$5,000
Extension Fee	If granted, $1,500 for a one year extension.
Standard Training Costs	$0 (There is no fee for standard training content.)
Costs for Additional Training	Up to $1,600 per additional trainee.
Refresher Training Course	Up to $1,600 per trainee for each refresher training program.
New Restaurant Training Support	$3,500 per trainer for the third franchised restaurant and above.
Learning Management System	$24-40 per restaurant per month.
Inspection	Cost of follow-up inspection.
Alternative Supplier Costs	Actual expenses.
Corrected Deficiency Costs	Reimbursement for expenses incurred.
Indemnification	Varies.
Attorneys’ Fees	Varies.
Taxes/Freight	Varies.
Catering Rewards Program	Varies, currently a pro rata share of the overall costs for the catering rewards program is charged to each restaurant.

The above information has been compiled from the FDD of Qdoba. Year of FDD: 2024.

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