Is a Del Taco Development Agreement holder subject to obligations regarding inspections and audits?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
| Obligation | Section in Franchise Agreement (FA) or Development Agreement (DA) | Item(s) in Disclosure Document |
|---|---|---|
| q. Owner’s participation, | FA – 5.4, 5.6 and 5.27 | 11 and 15 |
| management and staffing | DA – 12 | |
| r. Records and reports | FA – 7 and 7.6 DA – Not Applicable | Not Applicable |
| s. Inspections and audits | FA – 5.14, 7.1 and 7.4 DA – Not Applicable | 6 |
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 31–38)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, Development Agreement holders are not explicitly subject to obligations regarding inspections and audits. However, the Franchise Agreement does include obligations regarding inspections and audits.
The table in Item 11 of the Del Taco FDD outlines various obligations and their corresponding sections in the Franchise Agreement (FA) or Development Agreement (DA). Specifically, it indicates that obligations related to "Inspections and audits" are detailed in sections 5.14, 7.1, and 7.4 of the Franchise Agreement, but are "Not Applicable" to the Development Agreement. This suggests that while franchisees operating under a standard Franchise Agreement are subject to inspections and audits by Del Taco, those holding a Development Agreement are not directly bound by these specific obligations.
However, it is important to note that the Development Agreement likely contains other mechanisms through which Del Taco can ensure compliance with its standards and procedures. While the specific sections related to inspections and audits in the Franchise Agreement do not apply, Del Taco may still have the right to monitor and assess the performance and operations of restaurants developed under the Development Agreement through other means. A prospective franchisee should carefully review the entire Development Agreement to understand the full scope of Del Taco's oversight and control.