What is the Development Fee associated with the Del Taco Development Agreement?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Term. This Agreement and all Development Rights shall expire 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
Source: Item 23 — RECEIPTS (FDD pages 59–325)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, a Development Fee is required for the grant of development rights. The Development Fee is fully non-refundable. The fee is $35,000 for the first restaurant scheduled for opening and $10,000 for each additional restaurant scheduled for opening. This fee is payable upon the execution and delivery of the Development Agreement by the developer.
Del Taco earns the Development Fee upon the execution of the agreement. Del Taco does not have any obligation to refund any portion of the Development Fee. However, upon the execution of a Franchise Agreement, Del Taco will credit $35,000 from the Development Fee for the first restaurant and $10,000 for each subsequent restaurant towards the initial franchise fee for each of those restaurants.
The developer is responsible for paying the balance of the initial franchise fee for the second and each subsequent restaurant scheduled for opening. The developer acknowledges that once a Franchise Agreement is executed for a restaurant, they will not have the right to a refund of any portion of these fees. This structure is common in multi-unit development deals, where an initial fee secures the rights to develop multiple locations, with credits applied to franchise fees as each location opens.