Does Del Taco directly offer financing arrangements to franchisees?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
- 12.4.1 Franchisee shall comply with Del Taco's then-current transfer policies.
Franchisee and the proposed transferee shall provide Del Taco with all information and documents requested by Del Taco for its evaluation of the proposed transfer, transaction, and transferee, including the business and financial terms of the proposed transaction including the leases and/or any assignments, renewal or extension of the leases and any necessary landlord consents, financial and operational information regarding the proposed transferee, and evidence of any financing that may be required to complete the transaction and/or fund the transferee's operation after the transfer.
13. Default and Termination.
12.12 Securities Offerings. All materials for an offering of stock or partnership interests in Franchisee or any of Franchisee's affiliates which are required by federal or state law shall be submitted to Del Taco for review as described below before such materials are filed with any government agency. Any materials to be used in any exempt offering shall be submitted to Del Taco for such review prior to their use. No offering by Franchisee or any of Franchisee's affiliates shall imply (by use of the Proprietary Marks or otherwise) that Del Taco is participating in an underwriting, issuance, or offering of the securities of Franchisee or Franchisee's affiliates; and Del Taco's review of any offering shall be limited solely to the relationship between Del Taco and Franchisee and any subsidiaries and affiliates, if applicable, and shall not constitute any opinion as to any legal requirement. Del Taco may, at its option, require the offering materials to contain a written statement prescribed by Del Taco concerning the limitations stated in the preceding sentence. Franchisee (and the offeror if not Franchisee), the owners, and all other participants in the offering must fully indemnify Del Taco, its subsidiaries, affiliates, successor, and assigns, and their respective directors, officers, shareholders, partners, agents, representatives, servants, and employees in connection with the offering and shall execute any and all documents required by Del Taco to endorse such indemnification. For each proposed offering, Franchisee shall pay Del Taco a non-refundable fee of Five Thousand Dollars ($5,000) or such greater amount as is necessary to reimburse Del Taco for its reasonable costs and expenses (including legal and accounting fees) for reviewing the proposed offering. Franchisee shall give Del Taco written notice at least thirty (30) days before the date that any offering or other transaction described in this Section 12 commences. Any such offering shall be subject to all of the other provisions of this Section 12; and further, without limiting the foregoing, it is agreed that any such offering shall be subject to Del Taco's approval as to the structure and voting control of the offeror (and Franchisee, if Franchisee is not the offeror) after the financing is completed.
Source: Item 10 — FINANCING (FDD page 31)
What This Means (2025 FDD)
Based on the 2025 Del Taco Franchise Disclosure Document, it is not explicitly stated whether Del Taco offers direct financing to franchisees. However, the document does mention financial aspects related to franchise transfers and securities offerings.
Specifically, in the context of a franchise transfer, Del Taco requires the franchisee and the proposed transferee to provide information and documents, including evidence of any financing required to complete the transaction. This suggests that franchisees may need to seek external financing, but it doesn't confirm or deny direct financing from Del Taco.
Additionally, the FDD mentions that for offerings of stock or partnership interests in the franchisee, Del Taco reviews the offering materials but clarifies that this review does not imply Del Taco's participation in underwriting or offering securities. Franchisees are also required to pay Del Taco a non-refundable fee of $5,000 to cover the costs of reviewing the proposed offering. Since the FDD does not provide explicit details on direct financing options from Del Taco, prospective franchisees should directly inquire with Del Taco about available financing programs or preferred lending partners.