SoCal Mexican Chain Accused of 'Ponzi Scheme'

Roll Em Up Taquitos, a Southern California fast-casual chain, is fighting franchisee lawsuits that describe the business as a “Ponzi scheme” disguised as restaurant franchising. (restaurantbusinessonline.com) A group of five current and former franchisees sued in Riverside County Superior Court in July 2025, naming founder Ryan Usrey, former chief development officer Chris Wyland and director of information technology Cody Soscia. The complaint alleges fraud, negligent misrepresentation and misuse of funds. (restaurantbusinessonline.com) The franchisees say Roll Em Up used new franchise money to support the parent company and recruit more operators, while giving prospects inflated sales figures and understating labor and food costs. The suit says the company cited annual sales of about $1.8 million to $2.6 million at three Southern California stores. (restaurantbusinessonline.com) The complaint also targets the product itself. Franchisees say they were promised fresh, daily-made taquitos from a proprietary kitchen but were instead supplied frozen taquitos from “questionable supplies,” and they alleged some taquitos for corporate stores were made at a personal residence without quality controls. (sfgate.com) The case lands as Roll Em Up is still pitching expansion. Its franchising page says the franchise fee is $40,000, buildout runs from $398,800 to $798,000 per restaurant, and operators must commit to developing three or more restaurants with $500,000 in liquid assets and $2 million in net worth. (rollemup.com) The chain’s footprint is also in dispute. Restaurant Business reported 14 locations on the company’s website on April 10, while Roll Em Up’s spokesperson told the same outlet four days later that the company had one corporate store and nine franchised stores operated by seven franchisees. (restaurantbusinessonline.com 1) (restaurantbusinessonline.com 2) Roll Em Up says the allegations are false. Spokesperson Amy Levy said on April 13 that the brand is “a legitimate restaurant brand,” not a Ponzi scheme, and said the plaintiffs were poor operators who failed to meet contractual obligations. (restaurantbusinessonline.com) Levy also said the company has not offered new franchises for two years and that royalties and fees were used to run the business and support franchisees. She said weaker store performance reflected broader pressures including the coronavirus pandemic and rising operating costs. (restaurantbusinessonline.com) The California suit is not the chain’s only franchise fight. In 2024, New Mexico franchisees FMP Ventures and Reserve Industries sued Roll Em Up over a Las Vegas franchise deal they said the company agreed to buy back for roughly $800,000 and then failed to pay; Roll Em Up countersued, alleging the operators mismanaged the store and allowed drugs to be sold there. (chron.com) The company and Usrey are also facing a separate lawsuit over a $415,000 Ferrari allegedly bought in the company’s name, according to SFGATE. Usrey told Restaurant Business he was not aware of the franchisee lawsuit because he had not been served, while the outlet reported court filings showed repeated attempts to reach him. (sfgate.com) (restaurantbusinessonline.com) For now, the core dispute is simple: franchisees say they bought into a growth story built on misleading numbers and weak support, while the company says it built a real chain that was hurt by bad operators and a hard market. The Riverside County case is ongoing. (restaurantbusinessonline.com 1) (restaurantbusinessonline.com 2)