What is the dependency between the Del Taco franchisee's lease and the 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.
Source: Item 22 — CONTRACTS (FDD pages 58–59)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, the franchise agreement and the franchisee's lease are closely linked. 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 specific provisions outlined in Exhibit G, known as the Addendum to Lease.
Within 15 days of 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 contact information. Furthermore, no later than 10 days after opening the restaurant, the franchisee must provide Del Taco with a copy of the commencement date letter from the landlord, which indicates the lease's commencement and expiration dates.
Del Taco also maintains some control over the lease through restrictions on transfer. The franchisee cannot transfer or assign the lease, or permit a default or surrender of the lease that would allow the restaurant to be operated by someone not operating a Del Taco Restaurant, without Del Taco's prior written consent. During a renewal, the franchisee must demonstrate they have the right to remain in possession of the premises for the duration of the renewal term or obtain Del Taco's approval for a new location.