Who bears the expense of implementing system modifications required by Del Taco?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
such systems be compatible with each other, Franchisee expressly agrees that it shall strictly comply with Del Taco's standards and specifications for all item(s) associated with Franchisee's Technology System, and will otherwise operate its Technology System in accordance with Del Taco's standards and specifications. To ensure full operational efficiency and optimum communication capability between and among equipment and computer systems installed by Franchisee, Del Taco, and other franchisees, Franchisee agrees, at its expense, that Franchisee shall keep its Technology System in good maintenance and repair, and, at its expense, and following the determination that Del Taco shall have the right to make, to the effect that same will prove economically or otherwise beneficial to all System franchisees, that Franchisee shall promptly install such additions, changes, modifications, substitutions and/or replacement to Franchisee's computer hardware, software, telephone and power lines, and other related facilities, as Del Taco directs periodically in writing. Franchisee shall provide to Del Taco, upon Del Taco's request, all e mail lists and customer lists used or maintained by Franchisee on the Technology System or elsewhere.
- 5.15.2 Del Taco has the right, but not the obligation, to develop or have developed for it, or to designate, any or all of the following: (a) computer software programs and accounting system software that Franchisee must use in connection with the Technology System ("Required Software"), which Franchisee must install; (b) updates, supplements, modifications, or enhancements to the Required Software, which Franchisee must install; (c) the tangible media upon which such Franchisee must record or receive data; (d) the database file structure of Franchisee's Technology System; (e) an Extranet for
informational assistance, which may include the Manuals, training other assistance materials, and management reporting solutions; and (f) answering service requirements and/or system-wide phone order processing of all delivery orders, and/or to designate vendors that will provide such order processing.
- 5.15.3 Franchisee agrees to install and use the Technology System and Required Software in the manner that Del Taco requires.
- 5.15.4 Franchise agrees to implement and periodically upgrade and make other changes to the Technology System and Required Software as Del Taco may reasonably request in writing (collectively, "Technology Upgrades").
- 5.15.5 Franchisee agrees to comply with Del Taco's written specifications (whether in the Manuals or otherwise) with respect to the Technology System and the Required Software, and with respect to Technology Upgrades, at Franchisee's own expense.
- 5.15.6 Franchisee agrees to afford Del Taco unimpeded access to its Technology System and Required Software in the manner, form, and at the times that Del Taco requests.
Source: Item 22 — CONTRACTS (FDD pages 58–59)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, the franchisee is responsible for the expenses associated with implementing system modifications. Specifically, the franchisee must maintain their technology system and install any additions, changes, modifications, substitutions, or replacements to their computer hardware, software, telephone and power lines, and other related facilities as directed by Del Taco. These changes are made to ensure operational efficiency and communication between the franchisee, Del Taco, and other franchisees.
Del Taco also has the right to establish new technology standards and implement changes to the system, and the franchisee must abide by these new standards. This includes paying any fees, charges, or other amounts to Del Taco or any third party for such new technologies and related components. The franchisee is also responsible for upgrading their POS system and related software to maintain compliance with Payment Card Industry Data Security Standards (PCI DSS) and the Fair and Accurate Credit Transactions Act (FACTA).
Furthermore, Del Taco may modify the system to reflect changing market conditions or consumer demands, including adopting new products, services, equipment, and techniques. The franchisee is required to implement these changes at their sole expense. This extends to variations and additions to the system that Del Taco deems necessary to preserve and enhance the public image of the Del Taco system.
This arrangement places the financial burden of technology upgrades and system modifications squarely on the franchisee. Prospective franchisees should carefully consider these ongoing costs when evaluating the Del Taco franchise opportunity, as these expenses can impact profitability and require continuous investment to stay aligned with Del Taco's evolving standards and technological requirements.