What costs will Del Taco not pay or reimburse from the Promotional Fee?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
ranchise Fee is fully-earned and non-refundable in consideration of the administrative and other expenses incurred by Del Taco in granting this franchise and for Del Taco's lost or deferred opportunity to offer the rights to this franchise to others.
- 3.2 Promotional Fee. Franchisee shall pay Del Taco a fee of $10,000 (the "Promotional Fee") upon execution of this Agreement. The Promotional Fee shall be drawn upon by Franchisee through reimbursements submitted to Del Taco in the manner that Del Taco designates or through direct payments by Del Taco to vendors in order to promote the Restaurant within a year of the Restaurant's opening. Franchisee shall not contract for nor make any expenditures related to the promotion of the Restaurant unless Franchisee has submitted a request and received the written approval of Del Taco. Franchisee shall submit invoices for promotional expenditures to Del Taco for direct payment to the vendor or for reimbursement. Del Taco shall not pay or reimburse food or paper costs. Del Taco shall not have any obligation to refund
Source: Item 22 — CONTRACTS (FDD pages 58–59)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, Del Taco will not pay or reimburse franchisees for food or paper costs from the Promotional Fee.
Upon signing the franchise agreement, a Del Taco franchisee must pay a Promotional Fee of $10,000. This fee is intended to be used to promote the restaurant within a year of its opening. The franchisee can request reimbursement from Del Taco for promotional expenditures, or Del Taco can make direct payments to vendors. However, the FDD specifically states that Del Taco will not cover food or paper costs using the Promotional Fee.
This means that while the $10,000 Promotional Fee can be used for various advertising and marketing activities to boost the restaurant's visibility, it cannot be used to offset the costs of ingredients or packaging materials. If a franchisee fails to spend the entire Promotional Fee within 12 months of opening, the remaining balance is forfeited and used by Del Taco for their general advertising and marketing programs.