Does Del Taco currently receive any revenue, rebates, or other payments from designated suppliers based on franchisee purchases, besides the two vendors mentioned?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
During our fiscal year ended September 29, 2024, we occasionally purchased computer-related hardware and equipment from third-party vendors on behalf of franchisees and resold such hardware and equipment to franchisees at no markup; that is, we received reimbursements for the cost of computer-related hardware or equipment purchased on behalf of franchisees. Except for such reimbursements, neither we nor our affiliates received any payments from our franchisees as a result of any required purchases or leases covered by this Item 8. During our fiscal year ended September 29, 2024, two suppliers provided rebates back to us and to franchisees quarterly in arrears based on our respective purchases totaling approximately 10.2% of the purchases involved. Although we are not required to do so, we used the funds we received to help pay for system-wide promotions (directly or through the advertising fund). Except for the two vendors noted above, we do not currently receive any revenue, rebates, or other payments from designated suppliers based on franchisee purchases, though we reserve the right to do so in the future.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 28–30)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, Del Taco generally does not receive revenue, rebates, or other payments from designated suppliers based on franchisee purchases, with the exception of two vendors. The document specifies that during the fiscal year ending September 29, 2024, two suppliers provided rebates to both Del Taco and its franchisees, which totaled approximately 10.2% of the purchases involved. Del Taco used these funds to help pay for system-wide promotions. However, Del Taco retains the right to receive such payments from designated suppliers in the future.
Prospective franchisees should be aware that while Del Taco does not currently receive direct payments from most suppliers, this could change. The FDD indicates that Del Taco reserves the right to develop negotiated purchase arrangements with additional vendors in the future, which may include signage, equipment, furniture, and fixtures. This means that the cost of goods for franchisees could potentially be affected by these arrangements.
Furthermore, Del Taco is beginning to receive a Sourcing Fee from franchisees in 2025 for purchases through certain third-party distributors. This fee is $0.25 per box (case of goods) and is collected by the distributors and forwarded to Del Taco weekly. This Sourcing Fee is applied to both franchised and company-owned restaurants. Franchisees should factor this fee into their cost projections. Del Taco also negotiates price and certain other contract terms with the suppliers; conduct food safety and product quality testing, inspections and remediation activities; manage product tests, rollouts and related product obsolescence; review distribution charges and performance; and participate in distribution discussion groups and dispute resolutions.