What is the Development Fee for Del Taco based on, according to the table?
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
Source: Item 23 — RECEIPTS (FDD pages 59–325)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, the Development Fee is based on the number of restaurants a developer plans to open. The initial restaurant has a fee of $35,000, while each subsequent restaurant carries a fee of $10,000. This fee is paid in exchange for the Development Rights granted in the agreement.
This fee structure incentivizes developers to commit to opening multiple Del Taco locations. The initial higher fee for the first restaurant could be seen as covering the administrative and legal costs associated with setting up the development agreement. The subsequent lower fees for additional restaurants make it more attractive for developers to expand within their designated area.
It's important to note that these Development Fees are fully non-refundable and are earned by Del Taco upon the execution of the agreement. However, Del Taco will credit $35,000 for the first restaurant and $10,000 for each subsequent restaurant towards the initial franchise fee once the developer executes a Franchise Agreement. This means the Development Fee essentially acts as a deposit towards the initial franchise fees for each location.
Prospective developers should carefully consider the number of restaurants they commit to opening, as the Development Fee is non-refundable. They should also ensure they have a solid development plan and the financial resources to meet the development schedule outlined in the agreement to avoid any potential loss of fees.