How is 'Average Sales' calculated for Del Taco restaurants in Item 19?

According to Del Taco's 2025 Franchise Disclosure Document, 'Average Sales' in Item 19 is calculated by dividing the total sales figure for all surveyed restaurants in each category by the total number of restaurants surveyed. The sales figures include total net cash sales for all restaurants in each category, encompassing sales of food, beverages, and promotional items, net of sales taxes. Franchisees are required to pay a 5% royalty on sales, while company-owned restaurants do not pay royalties.

This calculation method provides a general overview of sales performance for both franchised and company-owned Del Taco restaurants. Prospective franchisees can use this information to understand the potential revenue they might generate, although individual results may vary. The FDD includes average sales figures for freestanding franchised Del Taco restaurants and freestanding company-operated Del Taco restaurants for the 2020 to 2024 fiscal years.

It is important to note that these average sales figures do not reflect the costs of sales, operating expenses, or other costs that must be deducted to obtain net cash sales figures. Del Taco obtains sales data from internal records for company-owned restaurants and from reports provided by franchisees, without verifying if the franchisee records were prepared according to generally accepted accounting principles. Therefore, franchisees should conduct their own independent investigation of costs and expenses.

Del Taco also changed its fiscal year in 2022, which was a reduced 40-week period. The average sales for that year were annualized to reflect a 52-week period. This adjustment ensures that the data remains comparable across different fiscal years, despite the change in the reporting period.