Does the Del Taco Development Agreement offer any exceptions to the standard Development Fee?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
re immediately upon the required opening date for the last Restaurant set forth on the Development Schedule or the actual opening date for the last Restaurant, whichever first occurs, unless sooner terminated in accordance with the terms and conditions of this Agreement.
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- Time of Essence. Time is of the essence of this Agreement.
5. Fees. The Developer shall pay to Del Taco the following fees:
- (a) In consideration of the Development Rights granted in this Agreement, the Developer shall pay to Del Taco a fully non-refundable Development Fee of $35,000 for the first Restaurant scheduled for opening and $10,000 for each additional Restaurant scheduled for opening, payable upon execution and delivery by the Developer of this Agreement. As between Developer and Del Taco, Del Taco shall earn the Development Fee upon the execution of this Agreement and shall not have any obligation to refund any portion of the Development Fee.
- (b) Upon the execution by the Developer of a Franchise Agreement, Del Taco shall credit from the Development Fee $35,000 for the first Restaurant scheduled for opening and $10,000 for each subsequent Restaurant scheduled for opening towards the initial franchise fee for each of those Restaurants. The Developer shall pay the balance of the initial franchise fee for the second and each subsequent Restaurant scheduled for opening. The Developer acknowledges that, once it has executed a Franchise Agreement for a Restaurant, the Developer will not have the right to a refund of any portion of the foregoing fees.
- (c) Notwithstanding any provision of the Agreement to the contrary, if Developer is not able to timely meet its Development Schedule, and provided that Developer and its affiliates are in full compliance with all agreements with Del Taco, Developer may request a twelve-month extension of one or more of the development deadlines in the Development Schedule, which extension Del Taco may grant or deny at its sole option. To request an extension of a development deadline, Developer must provide Del Taco at least six months' advance written notice.
Source: Item 23 — RECEIPTS (FDD pages 59–325)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, the standard Development Fee is $35,000 for the first restaurant and $10,000 for each additional restaurant. However, Del Taco does offer an exception to developers who are unable to meet their development schedule.
Specifically, if a developer is in full compliance with all agreements with Del Taco, they may request a twelve-month extension of one or more development deadlines in the Development Schedule. This extension is not guaranteed, as Del Taco may grant or deny it at their sole option. To request this extension, the developer must provide Del Taco with at least six months' advance written notice.
If Del Taco approves the extension, the developer must pay an Extension Fee of $5,000 times the number of development deadlines they wish to extend for twelve months. They must also sign an amendment to the Development Agreement to reflect the new dates and include a general release in favor of Del Taco. While the Extension Fee is initially non-refundable, Del Taco will credit it towards the Franchise Fee for the location upon execution of the applicable Franchise Agreement. This provides a conditional exception, allowing developers to adjust their schedule in exchange for a fee that is later credited back.