cted Area.

Development Agreement

If you sign a Development Agreement, you will have the right and obligation to develop an agreed-upon number of Del Taco restaurants within a defined geographic area (the "Development Area") during the term of, and subject to a prescribed schedule ("Development Schedule) and other conditions set forth in, the Development Agreement.

The size and scope of the Development Area, which will be set forth in Exhibit A to the Development Agreement when you execute your Development Agreement. The Development Area will be defined by market points as determined by us. When establishing market points, we consider various information, such as the locations of other restaurants, direct and indirect competition, store characteristics, historical consumer source surveys, sales history, mobile customer data, demographics, and psychographics, among others. In most cases, the Development Agreement gives you no option or right to increase, reduce or otherwise change your Development Area, the number of restaurants you must open, or the time period in which you must open the restaurants.

You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.

Subject to your full compliance with the Development Agreement and any Franchise Agreements or other contracts with us or our affiliates, we will grant you limited exclusivity rights to develop Del Taco Restaurants in the Development Area during the term of the Development Agreement. Subject to the reservations and limitations described in the agreements, we will not establish, or grant franchises for others to establish, Del Taco Restaurants in the Development Area during the term of the Development Agreement. Except as expressly limited by the previous sentence, we and our affiliates retain all rights with respect to Del Taco restaurants, other branded, co-branded, or multi-branded restaurants, the

Proprietary Marks, the sale of similar or dissimilar products and services, and any other activities we deem appropriate whenever and wherever we desire.

The Development Agreement gives you no option or right to increase, reduce, or otherwise change your Development Area, the number of restaurants you must open, or the Development Schedule during which you must open the restaurants. The restrictions on our right to operate in your Development Area do not apply to any Del Taco Restaurant existing or under development on the date the Development Agreement is signed. We are not required to pay you if we or our affiliates exercise any of the rights specified above inside or outside your Development Area.

As a condition to exercising your development rights under your Development Agreement, you must remain in full compliance with all provisions of your Development Agreement and any other agreements (including any Franchise Agreements) between you and your affiliates and us and our affiliates. You must execute a separate Franchise Agreement, on our then-current form of franchise agreement, for each Restaurant. Each proposed site must satisfy our then-current site selection criteria, and you must submit to us in a timely manner all information and documents requested by us in connection with the Development Agreement or any other agreements to be executed between you and any of your affiliates and us or any of our affiliates, and you must have taken such additional actions in connection therewith as may be requested by us.

Source: Item 12 — TERRITORY (FDD pages 38–40)