Rusty Taco Franchise Costs, Fees & FDD

Year Business Began: 2010

Franchising Since: 2010

Headquarters: Plano, Texas

Estimated Number of Units: 35

Franchise Description: Rusty Taco Franchising, LLC is the franchisor. The franchise is the right to develop a restaurant that offers freshly prepared food made with quality, fresh ingredients inspired by the flavors of Mexico and Texas, along with an assortment of alcoholic and nonalcoholic beverages under the “Rusty Taco” trade name, trademark, and business system in an atmosphere designed to be a neighborhood gathering place.
Training Overview: At least one person and up to three people (one of which must be the operating principal or restaurant manager, if applicable) must attend and complete the initial training program on the general business aspects of operating a Rusty Taco restaurant. The initial training program consists of classes conducted at one of the franchisor’s company-owned restaurants in Dallas, Texas or other designated locations. The initial training program is anticipated to last approximately 28 to 35 days. For the first Rusty Taco restaurant opened, the franchisor will provide on-site opening assistance (the number of persons, content and duration of which will be determined by the franchisor) at no charge to franchisees, but they must pay all of their employee wages and the cost of food used during the assistance period. The franchisor may also periodically offer additional mandatory, optional, refresher, advanced, or other training programs or seminars from time to time, addressing common problems experienced by franchisees or addressing new products, services, or techniques to be utilized by franchisees, and the franchisor may establish reasonable fees for attendance at such events.

Territory Granted: Franchisees will operate the restaurant from a location that they select and the franchisor approves. Franchisees will not receive an exclusive territory. They may face competition from other franchisees, from outlets that the franchisor owns, or from other channels of distribution or competitive brands that the franchisor controls. If franchisees are in full compliance with the Franchise Agreement, during the Franchise Agreement’s term (with limited exceptions), neither the franchisor nor its affiliates will operate, or authorize any other party to operate, a Rusty Taco restaurant within the protected territory specified in the Franchise Agreement. Generally, the protected territory will be a geographic area which is a circle having the restaurant’s front entrance as its center and a radius of two miles, however, the franchisor reserves the right to change the definition of the protected territory in densely populated urban areas, (New York City or Washington DC, for example), and the protected territory may be as small as an office or retail building.

Obligations and Restrictions: Franchisees (or their operating principal if franchisees are not a natural person i.e., an entity) must engage in and have control over the on-premises day-to-day supervision of the restaurant. If, at any time, franchisees or their affiliates operate more than one Rusty Taco restaurant, then, in addition to the operating principal, franchisees must appoint an individual (who need not have an ownership interest in the franchisee) to serve as restaurant manager. Unless a restaurant manager is appointed, the operating principal shall also devote full-time efforts to the operation of the restaurant and shall not engage in any other business or activity, directly or indirectly, that requires substantial management responsibility or time commitment. Franchisees must offer and sell all menu items that the franchisor requires and only those menu items that the franchisor has approved of as of the time they are offered and sold. Franchisees must participate in all product and market research programs the franchisor requires. The franchisor also require franchisees to participate in any customer loyalty and reward programs, contests, sweepstakes, meal deals, promotional programs, and similar campaigns it requires and specifies in writing.

Term of Agreement and Renewal: The length of the initial franchise term is 10 years, unless sooner terminated as provided in the agreement. If franchisees are in good standing, they can renew for one additional 10-year term.

Financial Assistance: The franchisor, its affiliates, and its agents do not offer direct or indirect financing. The franchisor does not guarantee a franchisee’s notes, leases, or other obligations. Currently, the franchisor participates in the International Franchise Association’s VetFran Program under which qualified franchisees are provided with a 50% discount on the standard initial franchise fee.

Estimated Initial Investment

Name of Fee	Low	High
Initial Franchise Fee	$30,000	$30,000
Rent and Security Deposit	$3,000	$10,000
Utility Deposits	$6,000	$10,000
Construction, Remodeling and Leasehold Improvements	$253,000	$621,000
Permits and Licenses	$3,000	$6,950
Architect Fee	$20,000	$60,000
Furniture, Fixtures, Equipment, and Signage	$163,000	$250,000
Initial & Opening Training Costs	$0	$15,000
Computer System	$2,000	$5,000
Initial Inventory/Supplies	$7,400	$10,000
Professional Services	$5,000	$15,000
Initial Advertising and Marketing Expenses	$10,000	$15,000
Insurance	$6,000	$30,000
Additional Funds (3 months)	$20,000	$50,000
ESTIMATED TOTAL	$528,400	$1,127,950

 
Other Fees

Type of Fee	Amount
Royalty Fee	5% of gross sales.
Brand Fund Contribution	Currently 2% of gross sales.
Local Advertising Cooperative	Currently not assessed. Varies, as specified by the co-op.
Interest	Lesser of 18% per year or the highest rate allowed by the restaurant’s jurisdiction.
Non-Sufficient Funds Fee	$50 for each returned check or draft plus reimbursement of the franchisor’s costs incurred to collect.
Additional or Remedial Training and Opening Assistance for Second and Each Subsequent Rusty Taco Restaurant	Currently, $400 per trainer per day, plus reimbursement of the franchisor’s expenses including the related costs of travel, lodging, and meals.
Private or Public Offering Fee	The franchisor’s costs and expenses.
Transfer Fee	$5,000, plus reimbursement of reasonable attorneys’ fees and the franchisor’s expenses to inspect the restaurant, which generally range from $1,000 to $2,000.
Renewal Fee	The higher of $7,500 or 25% of the then-current initial franchise fee.
Indemnification	The franchisor’s actual costs.
Audit Fee	The franchisor’s actual costs.
Reimbursement of Expenses	The franchisor’s actual costs plus an administrative fee which will not exceed 10% of the expense the franchisor incurs on the franchisee’s behalf.
Technology Fees	The then-current costs. Currently not assessed.
Email Address Fee	Currently not assessed.
Learning Management System Fee	Currently not assessed.
Relocation Expenses	Reimbursement of the franchisor’s costs and expenses (estimated to be up to $5,000).
De-identification Fee	Reimbursement of actual costs.
Unauthorized Temporary Closure	110% of the average daily royalty fee owed from the week immediately prior to closure.
Non-Compliance Charge	Increase of one point to the rate of the franchisee’s royalty fee.
Approval of Alternate Suppliers	$2,500 to $10,000
Lost Revenue Damages	Varies.
Costs and Attorneys’ Fees	The franchisor’s actual costs.

The above information has been compiled from the FDD of Rusty Taco. Year of FDD: 2025.
Franchise Direct's Disclaimer