According to the Del Taco Development Agreement, what constitutes an 'Affiliate'?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
- (a) "Affiliate" shall mean (1) any person controlling, controlled by or under common control with the Developer (as defined by the Securities Act of 1933, as amended, and the rules and regulations promulgated under that act), (2) any officer, director or more than 10% owner of the Developer or (3) any legal entity in which the Developer or any officer, director or more than 10% owner of the Developer has an interest of 10% or more.
Source: Item 23 — RECEIPTS (FDD pages 59–325)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, the Development Agreement defines 'Affiliate' in three specific ways. First, it includes any person or entity that controls, is controlled by, or is under common control with the Developer, as defined by the Securities Act of 1933. This means any entity with a parent-subsidiary or sibling relationship to the developer is considered an affiliate.
Second, an 'Affiliate' includes any officer, director, or individual owning more than 10% of the Developer. This encompasses the key leadership and significant owners within the Developer's organization.
Third, the definition extends to any legal entity in which the Developer, or any officer, director, or more than 10% owner of the Developer, holds an interest of 10% or more. This captures entities where the Developer or its key personnel have a substantial financial stake. These definitions are important because the actions of an affiliate can impact the franchisee's obligations and compliance under the Development Agreement with Del Taco.