What is the definition of 'Protected Area' for a Del Taco restaurant, as defined in the franchise agreement?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
ended hereto as Exhibit G. Franchisee acknowledges and agrees that Del Taco's consent to Franchisee's proposed location, under this Section 1.1 or pursuant to the Site Selection Addendum, does not constitute any assurance, representation, or warranty of Del Taco of any kind.
- 1.2 Protected Area. Except as otherwise described in this Agreement, for so long as Franchisee is in full compliance with this Agreement, Del Taco will not, during the term of this Agreement, operate or license others to operate a Del Taco Restaurant at a physical premises located within the Protected Area. "Protected Area" shall mean the area within a one (1) mile radius around the Restaurant, with the exception of any outlet that is open, under construction or site approved or that is defined in this Agreement as an Alternative Point of Distribution (defined below) that is developed, constructed, operated, merchandised, sold, licensed and/or franchised to others by Del Taco to sell Menu Items, products, and services to the public within the Protected Area, as may be revised in accordance with Section 1.2.5 hereof. "Alternative Point(s) of Distribution" shall mean any outlet described in Section 1.2.2 of this Agreement. Del Taco retains all other rights not expressly granted in this Agreement. Without obligation to Franchisee, Del Taco and its affiliates may, among other things, and regardless of proximity to or economic impact upon the Restaurant:
- 1.2.1 Advertise and promote the System within and outside of the Protected Area;
- 1.2.2 Sell or authorize others to sell Menu Items, products, and services to the public within the Protected Area through Alternative Points of Distribution, which include outlets (whether mobile or fixed, permanent or temporary) located on military bases, institutional outlets (including college campuses, hospitals and school lunch programs), fairs, athletic contests or other special events, casinos, airports and larger retail outlets, including Wal-Mart and Home Depot, toll roads, limited access highways, schools, universities, enclosed shopping malls, hotels, industrial or government facilities, amusement or theme park complexes, train stations, bus stations or other transportation facilities and other locations owned or operated by major institutions with sites throughout the country or a particular state, or any other outlet and to use the System in connection with those Alternative Points of Distribution.
- 1.2.3 Offer and sell any products or services (including those offered by the Restaurant), under any marks (including the Proprietary Marks) outside of the Protected Area, and through any means (including through a Del Taco Restaurant);
- 1.2.4 Construct and operate other Del Taco Restaurants and to use the Del Taco System or any part of the Del Taco System at any location outside the Protected Area and to license others to do the same;
- 1.2.5 Establish, operate, and license others to establish and operate, businesses other than Del Taco Restaurants within and outside of the Protected Area;
- 1.2.6 Establish, operate, and license others to establish and operate, any co-branded or multi-branded restaurant or food-related business, within or outside the Protected Area, which uses the Proprietary Marks and the trademark(s) of one or more other related or unrelated brands and which may offer or sell same or similar menu items as Del Taco restaurants;
- 1.2.7 Offer and sell, and authorize others to offer and sell, approved collateral products and services, including those offered and sold at the Restaurant (such as pre-packaged food products, clothing, and other branded merchandise and memorabilia), under the Proprietary Marks or other marks at or from any location, within or outside the Protected Area, or through any channel of distribution (including, but not limited to, grocery stores, catalogs, the Internet, other retail or restaurant locations and other food service facilities such as kiosks, concessions, food trucks, or multi-brand facilities) and provide a limited number or representative sample of the products and services normally offered by the Restaurant;
- 1.2.8 Establish and operate, and license others to establish and operate, any restaurants or other businesses that Del Taco or its affiliates may operate or license as a result of any acquisition, consolidation, or merger, located within or outside the Protected Area, whether or not such other restaurants or businesses operate under the Proprietary Marks or under other marks; and
- 1.2.9 Engage in any other activity, action, or undertaking that Del Taco or its affiliates are not expressly prohibited from taking under this Agreement.
- 1.3 No Right to Subfranchise. Franchisee may not subfranchise, sublicense, or relicense to others any right to use the System or the Proprietary Marks.
- 1.4 Goodwill and Del Taco Name. Except as expressly provided by this Agreement, Franchisee shall acquire no right, title or interest in and to the System. Any and all goodwill associated with the System shall inure exclusively to Del Taco's benefit;
Source: Item 22 — CONTRACTS (FDD pages 58–59)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, a franchisee, while in full compliance with the franchise agreement, is granted a protected area. This means Del Taco will not operate or license others to operate another Del Taco Restaurant at a physical location within the defined protected area during the term of the agreement. The protected area is defined as the area within a one-mile radius around the franchisee's restaurant.
However, this protected area is subject to certain exceptions. Any Del Taco outlet that is already open, under construction, or site-approved, as well as any Alternative Points of Distribution, are excluded from the protected area. Alternative Points of Distribution include outlets located on military bases, institutional locations like college campuses and hospitals, fairs, athletic events, casinos, airports, larger retail outlets like Wal-Mart and Home Depot, toll roads, limited access highways, schools, universities, enclosed shopping malls, hotels, industrial or government facilities, amusement or theme park complexes, and transportation facilities. Del Taco retains the right to sell menu items through these alternative distribution points within the protected area.
Del Taco also retains all rights not expressly granted to the franchisee in the agreement. This includes the right to advertise and promote the Del Taco system within and outside the protected area. Furthermore, Del Taco can offer and sell any products or services under any marks outside the protected area through any means, including through another Del Taco Restaurant. Del Taco can also construct and operate other Del Taco Restaurants and license others to do the same outside the protected area. Del Taco may also modify or eliminate the Protected Area completely.
For a prospective franchisee, this means that while you are granted a one-mile radius of protection around your Del Taco restaurant, there are several exceptions that could allow Del Taco to operate or license other outlets within that area. It is important to carefully consider these exceptions and how they might impact the potential success of your franchise location. The specific location of the protected area will be described in Exhibit A to the Franchise Agreement.