Mike's Red Tacos Franchise
Cost, fees, owner earnings, closure rate and litigation for a Mike's Red Tacos franchise — pulled from the franchisor's own public FDD (2025), not its sales material.
Disclosure honesty
Mike's Red Tacos discloses earnings (Item 19) — but the grade is how honestly. We graded it D.
What their own earnings claim actually says
Two affiliate-owned locations (San Diego, CA) reporting 2025 gross sales of $3.3M-$3.8M. No franchisee performance data provided. Results not audited.
What a Mike's Red Tacos franchise actually costs to run
| Fee | Disclosed | Where it comes from |
|---|---|---|
| Initial franchise fee | $40,000 | Item 5 — paid up front, before you open |
| Royalty | 5% of gross sales | Item 6 — charged on revenue, not profit |
| Advertising fund | 3% of gross sales | Item 6 — brand marketing, spent at the franchisor's discretion |
| Total recurring fees | 8% of gross sales | Before rent, labor, food or debt service |
| Total initial investment | $619,800 – $1,953,000 | Item 7 — franchisor's own low/high estimate |
5% royalty, 3% Creative Fund (max 4%), 1% local advertising required. Multiple operational fees: TOM $170-500/wk, mystery shopper $165/mo, food safety $100/mo.
Royalty and ad-fund percentages are charged on gross sales — an owner pays them whether or not the location is profitable.
Mike's Red Tacos system size and owner turnover
| Total outlets | 2 |
| Ceased operations | 0 |
| Terminated by franchisor | 0 |
| Transferred to new owners | 0 |
| Closure rate | 0.0% of outlets |
No franchised outlets operational as of FDD date; 18 signed but unopened agreements.
From Item 20 of the FDD 2025. Terminations and ceased operations are the franchisor's own count of owners who stopped — the number the sales pitch leaves out.
Is Mike's Red Tacos worth it? — how it compares to 164 similar franchises
| Ongoing fees | 8% of sales | lower than most (median 8%) |
| Startup cost | from $619,800 | pricier than 64% of peers |
| Disclosure honesty | Grade D | less honest than most of the category |
| Closure rate | 0.0% of outlets | better than most (median 1.3%) |
| Disclosed lawsuits | 0 | fewer than most |
Benchmarked against every quick service restaurants franchise we've graded from public FDDs — the context the franchisor's pitch never gives you.
Owner take-home for a Mike's Red Tacos
The franchisor's framing: Two affiliate-owned locations (San Diego, CA) reporting 2025 gross sales of $3.3M-$3.8M. N… We reconstruct what an owner actually keeps, from their own FDD.
- Reconstructed owner P&L — net take-home after royalty, ad fund, rent, labor & debt
- Break-even timeline + cash-on-cash ROI
- Full fee stack + required-purchase markups
- Decoded real failure / closure rate
- How it ranks vs comparable franchises
- Validation-call playbook — the exact questions to ask
See a full sample report → · 30-day guarantee
Mike's Red Tacos franchise — frequently asked
- How much does a Mike's Red Tacos franchise cost?
- The FDD lists a total initial investment of about $619,800–$1,953,000, including a $40,000 initial franchise fee.
- How much do Mike's Red Tacos franchise owners make?
- Two affiliate-owned locations (San Diego, CA) reporting 2025 gross sales of $3.3M-$3.8M. No franchisee performance data provided. Results not audited. We grade this disclosure D for honesty.
- What are the Mike's Red Tacos franchise fees?
- Mike's Red Tacos' FDD discloses a $40,000 initial franchise fee, a 5% royalty on gross sales, a 3% advertising-fund contribution, for roughly 8% of gross sales in recurring fees before rent, labor, or debt service. 5% royalty, 3% Creative Fund (max 4%), 1% local advertising required. Multiple operational fees: TOM $170-500/wk, mystery shopper $165/mo, food safety $100/mo.
- What is the Mike's Red Tacos franchise profit margin?
- Mike's Red Tacos does not publish a franchisee net-profit margin — almost no franchisor does. What Item 19 actually shows: Two affiliate-owned locations (San Diego, CA) reporting 2025 gross sales of $3.3M-$3.8M. No franchisee performance data provided. Results not audited. Recurring fees alone take about 8% of gross sales, before rent, labor, food or debt service. Margin has to be reconstructed from the disclosure, not read off it.
- What is the Mike's Red Tacos franchise failure rate?
- No franchised outlets operational as of FDD date; 18 signed but unopened agreements.
- How many Mike's Red Tacos locations are there?
- Mike's Red Tacos' FDD reports 2 total outlets, with 0 that ceased operations in the most recent reporting year and 0 transferred to new owners. Item 20 is where system health shows up before the marketing does.
- Does Mike's Red Tacos have complaints or lawsuits?
- Mike's Red Tacos discloses no material litigation in Item 3 of the filing we reviewed. That's a positive signal, though it covers only what the franchisor is required to report.
- Is a Mike's Red Tacos franchise worth it?
- It depends on the numbers, not the pitch. Mike's Red Tacos scores D on disclosure honesty, carries about 8% of sales in ongoing fees. Get the real owner take-home before you sign.
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Compare Mike's Red Tacos to similar franchises
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Source: WI DFI Franchise Registration (2026). FranchiseValidate is independent and not affiliated with Mike's Red Tacos or its franchisor. Figures are extracted from the franchisor's own public disclosure document; verify against the current FDD before any decision.