Are the costs for a 'Phase Three' environmental assessment included in the estimated initial investment for a Del Taco franchise?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Environmental assessment costs tend to be site-specific in nature and can vary based on where the property is located, a property's former use(s), the use(s) of neighboring properties, and a property's existing conditions. A "Phase One" assessment involves title research and can cost approximately $2,500 to $4,000. The cost of a "Phase Two" assessment typically varies because some amount of borings, well sampling, and invasive testing may need to be completed on the property and will typically range from $10,000 to $34,000. "Phase Three" assessments involve the development of a clean-up mitigation plan to address on-site contamination. By their site-specific nature, the costs for a Phase Three will vary significantly, and these co
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 21–28)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, the estimated initial investment does not include costs for a Phase Three environmental assessment. The FDD specifies that environmental assessment costs are site-specific and can vary based on the property's location, former uses, neighboring properties' uses, and existing conditions.
The FDD outlines the costs for Phase One and Phase Two assessments. A Phase One assessment, involving title research, is estimated to cost between $2,500 and $4,000. A Phase Two assessment, which may require borings, well sampling, and invasive testing, typically ranges from $10,000 to $34,000.
Phase Three assessments, which involve developing a clean-up mitigation plan for on-site contamination, are excluded from the estimated initial investment due to their highly variable and site-specific nature. Therefore, a prospective Del Taco franchisee should be prepared for potential additional costs associated with environmental remediation, depending on the specific site chosen and its environmental condition. It would be prudent to discuss potential Phase Three assessment scenarios and cost ranges with Del Taco during the site selection process.