What agreement must a transferee of an owner enter into with Del Taco to be designated as an owner?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
- 12.4.3 The transferee of an owner shall be designated as an owner and each transferee who is designated as an owner shall enter into a written agreement, in a form satisfactory to Del Taco, agreeing to be bound as an owner under the terms of this Agreement as long as such person or entity owns any interest in Franchisee; and, if Franchisee's obligations were guaranteed by the transferor, the owner shall guarantee the performance of all such obligations in writing in a form satisfactory to Del Taco.
Source: Item 22 — CONTRACTS (FDD pages 58–59)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, a transferee of an owner must enter into a written agreement with Del Taco to be designated as an owner. This agreement, which must be in a form satisfactory to Del Taco, requires the transferee to agree to be bound as an owner under the terms of the Franchise Agreement as long as they hold any interest in the franchisee.
Furthermore, if the transferor had previously guaranteed the franchisee's obligations, the new owner must also provide a written guarantee, in a form satisfactory to Del Taco, ensuring the performance of all such obligations. This condition ensures that Del Taco maintains a consistent level of financial security and commitment from its franchisees and their owners.
This requirement is a standard practice in franchising, as it allows Del Taco to ensure that all individuals with an ownership stake in a franchise are fully aware of and committed to the obligations and responsibilities that come with it. By requiring a written agreement and potentially a guarantee, Del Taco aims to protect its brand and maintain the integrity of its franchise system.