What were the changes in operating lease right-of-use assets and lease liabilities for Del Taco in 2024?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
ated expenses are presented in "Franchise occupancy expenses."
Company as lessee — Leased assets and liabilities consisted of the following as of September 29, 2024 and October 1, 2023 (in thousands):
| September 29, 2024 | October 1, 2023 | |
|---|---|---|
| Assets: | ||
| Operating lease ROU assets | $ 1,410,083 | $ 1,397,555 |
| Finance lease ROU assets (1) | 416 | 971 |
| Total ROU assets | $ 1,410,499 | $ 1,398,526 |
| Liabilities: | ||
| Current operating lease liabilities | . $ 162,017 | $ 142,518 |
| Current finance lease liabilities ( |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 58)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, the company's operating lease right-of-use (ROU) assets and lease liabilities experienced changes in 2024. Specifically, the operating lease ROU assets increased from $1,397,555 in 2023 to $1,410,083 in 2024. Similarly, the total lease liabilities also increased from $1,409,348 in 2023 to $1,449,034 in 2024. These figures reflect the company's financial position as of September 29, 2024, and October 1, 2023. These values are in thousands.
For a prospective Del Taco franchisee, understanding these figures is crucial because lease obligations often represent a significant portion of a franchisee's financial commitments. The operating lease ROU assets represent the value of the franchisee's right to use a property for the lease term, while the lease liabilities represent the franchisee's obligation to make lease payments. Increases in these figures could indicate Del Taco's expansion or renegotiation of lease terms, which may affect the financial performance of individual franchise locations.
It's important to note that these figures are part of the consolidated financial statements for Jack in the Box Inc., which acquired Del Taco. Therefore, the lease information includes all leases held by the parent company and its subsidiaries. A potential franchisee should seek clarification from Del Taco regarding the specific lease terms and obligations they would be undertaking as part of their franchise agreement. This includes understanding the duration of the lease, renewal options, and any potential rent escalations.
Furthermore, prospective franchisees should consult with a financial advisor to assess the impact of these lease obligations on their overall financial health and business plan. Understanding the nuances of lease accounting and the implications for cash flow is essential for making informed decisions about investing in a Del Taco franchise. The FDD also mentions that in 2024, loss on disposition of property and equipment primarily related to the lease termination and early closures of Del Taco restaurants.