What is the defined geographic area called in the Del Taco Development Agreement?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
If you sign a Development Agreement, you will have the right and obligation to develop an agreed-upon number of Del Taco restaurants within a defined geographic area (the "Development Area") during the term of, and subject to a prescribed schedule ("Development Schedule) and other conditions set forth in, the Development Agreement.
The size and scope of the Development Area, which will be set forth in Exhibit A to the Development Agreement when you execute your Development Agreement. The Development Area will be defined by market points as determined by us. When establishing market points, we consider various information, such as the locations of other restaurants, direct and indirect competition, store characteristics, historical consumer source surveys, sales history, mobile customer data, demographics, and psychographics, among others. In most cases, the Development Agreement gives you no option or right to increase, reduce or otherwise change your Development Area, the number of restaurants you must open, or the time period in which you must open the restaurants.
You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.
Subject to your full compliance with the Development Agreement and any Franchise Agreements or other contracts with us or our affiliates, we will grant you limited exclusivity rights to develop Del Taco Restaurants in the Development Area during the term of the Development Agreement. Subject to the reservations and limitations described in the agreements, we will not establish, or grant franchises for others to establish, Del Taco Restaurants in the Development Area during the term of the Development Agreement. Except as expressly limited by the previous sentence, we and our affiliates retain all rights with respect to Del Taco restaurants, other branded, co-branded, or multi-branded restaurants, the
Proprietary Marks, the sale of similar or dissimilar products and services, and any other activities we deem appropriate whenever and wherever we desire.
The Development Agreement gives you no option or right to increase, reduce, or otherwise change your Development Area, the number of restaurants you must open, or the Development Schedule during which you must open the restaurants. The restrictions on our right to operate in your Development Area do not apply to any Del Taco Restaurant existing or under development on the date the Development Agreement is signed. We are not required to pay you if we or our affiliates exercise any of the rights specified above inside or outside your Development Area.
Source: Item 12 — TERRITORY (FDD pages 38–40)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, if a franchisee signs a Development Agreement, they obtain the right and obligation to develop a certain number of Del Taco restaurants within a specific geographic area, referred to as the "Development Area." This area is subject to a defined schedule and other conditions outlined in the Development Agreement. The Development Area's size and scope are detailed in Exhibit A of the Development Agreement and are determined by Del Taco using market points. These points are established by considering factors such as the locations of other restaurants, competition, store characteristics, consumer surveys, sales history, customer data, demographics, and psychographics.
Typically, the Development Agreement does not allow the franchisee to increase, reduce, or otherwise change their Development Area, the number of restaurants they must open, or the time period for opening them. While Del Taco grants limited exclusivity rights to develop Del Taco Restaurants in the Development Area during the agreement's term, this is subject to full compliance with the Development Agreement and other related contracts. Del Taco retains the right to operate or franchise other restaurants, including co-branded or multi-branded restaurants, within the Development Area.
It's important to note that the restrictions on Del Taco's right to operate in the Development Area do not apply to any Del Taco Restaurant existing or under development when the Development Agreement is signed. Furthermore, Del Taco is not obligated to compensate the franchisee if it or its affiliates exercise any rights within or outside the Development Area. Franchisees should be aware that they may face competition from other franchisees, company-owned outlets, or other distribution channels, as the Development Agreement does not grant an exclusive territory.