What is the definition of 'Lease' in the context of the Del Taco franchise agreement?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
acceptable to Del Taco to construct the Restaurant and to complete all improvements. Franchisee shall obtain and maintain in force during the entire period of construction the insurance required under Section 11 below; and Franchisee shall deliver to Del Taco such proof of such insurance as Del Taco shall require.
- 5.2.6 Prior to signing a lease, Franchisee shall submit to Del Taco a final draft of the lease for the Restaurant premises. The lease must contain the provisions contained in Exhibit G (Addendum to Lease) hereof. Within fifteen (15) days following Franchisee's execution of the lease for the Restaurant premises, Franchisee shall provide to Del Taco copies of (i) the fully-executed lease for the premises and the executed Addendum to Lease and (ii) the landlord's and property management company's notice address and contact information. Further, no later than ten (10) days following Franchisee's opening of the Restaurant for business, Franchisee shall provide Del Taco with a copy of the commencement date letter from the landlord, or similar documentary evidence which indicates the commencement date under the lease and the expiration date of the lease.
- 5.3 Restaurant Opening. In connection with the opening of the Restaurant:
- 5.3.1 Franchisee shall not open the Restaurant for business without first complying with all of Del Taco's pre-opening requirements and obligations contained in this Agreement and the Manuals.
- 5.3.2 Franchisee shall draw upon the Promotional Fee as described in Section 3.2 to conduct such grand opening and promotional activities as Del Taco may require.
- 5.3.3 Franchisee shall not open the Restaurant until Del Taco has determined that all construction has been substantially completed, and that such construction conforms to Del Taco's standards including materials, quality of work, signage, decor, paint, and equipment.
Source: Item 22 — CONTRACTS (FDD pages 58–59)
What This Means (2025 FDD)
According to the 2025 Del Taco Franchise Disclosure Document, the term 'lease' in the context of the franchise agreement pertains to the agreement between the franchisee and the landlord for the Restaurant premises. Several clauses in the franchise agreement address the lease, outlining the franchisee's obligations and Del Taco's rights regarding the property.
Specifically, before signing a lease, a Del Taco franchisee must submit a final draft of the lease for the Restaurant premises to Del Taco for approval. The lease must also contain the provisions outlined in Exhibit G, which is an addendum to the lease. After executing the lease, the franchisee must provide Del Taco with copies of the fully-executed lease, the executed Addendum to Lease, and the landlord's and property management company's contact information. Furthermore, the franchisee must provide Del Taco with a copy of the commencement date letter from the landlord, indicating the lease's commencement and expiration dates, no later than ten days after opening the Restaurant.
Del Taco also retains certain rights regarding the lease. Del Taco has the option to acquire the leases for the Restaurant or the right to occupy the premises. If Del Taco does not exercise this option, the franchisee must modify the premises upon termination or expiration of the agreement to distinguish it from other Del Taco Restaurants. The initial term of the Del Taco Franchise Agreement is dependent on the lease's expiration date, including any extensions or renewals, highlighting the importance of the lease terms. The franchisee cannot transfer or assign the lease without Del Taco's prior written consent, and any default or surrender of the lease that could result in the Restaurant being operated by someone not affiliated with Del Taco also requires prior written consent.