What accounting basis must Del Taco franchisees use when preparing their financial statements?

According to the 2025 FDD, Del Taco franchisees must prepare their financial statements in accordance with U.S. Generally Accepted Accounting Principles (GAAP). This is a standardized framework of accounting rules, procedures, and guidelines developed by the accounting profession and the SEC. Compliance with U.S. GAAP ensures uniformity and comparability in financial reporting across different businesses and industries.

For a prospective Del Taco franchisee, this means that their financial record-keeping and reporting must adhere to these established standards. This includes how revenue is recognized, how expenses are recorded, and how assets and liabilities are valued and presented. Franchisees will likely need to engage qualified accounting professionals who are knowledgeable in U.S. GAAP to ensure their financial statements are accurately prepared and compliant.

Del Taco itself prepares its consolidated financial statements in accordance with U.S. GAAP, as noted in the FDD. This alignment in accounting standards between the franchisor and its franchisees facilitates consistency in financial reporting and allows for easier consolidation and analysis of financial data across the entire Del Taco system. Franchisees should be aware that adhering to U.S. GAAP may require specific accounting software and processes, and they should factor in these costs when evaluating the overall investment in a Del Taco franchise.

While the FDD specifies the use of U.S. GAAP, it does not detail the specific frequency or format required for franchisee financial reporting to Del Taco. Prospective franchisees should clarify these reporting requirements with Del Taco during their due diligence to fully understand the ongoing administrative and compliance obligations.