Is entering into a separate Franchise Agreement a requirement for each Del Taco Restaurant opened under a Development Agreement?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
Under our Development Agreement (see Exhibit D to this Disclosure Document), you will have the right and obligation to develop two or more Del Taco Restaurants within a defined geographic area. The Development Area will be described in the Development Agreement. Development Areas may be designated at Del Taco's discretion in such manner as we deem appropriate but, typically, we define Development Areas by market points as determined by us. You must enter into a separate Franchise Agreement (see Exhibit E to this Disclosure Document) on our then-current form of franchise agreement, the terms of which may differ from the current version of the Franchise Agreement attached to this Disclosure Document, for each Del Taco Restaurant you open.
Source: Item 1 — THE FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 6–8)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, if a franchisee enters into a Development Agreement with Del Taco, they are obligated to develop two or more Del Taco restaurants within a specific geographic area.
For each Del Taco restaurant that the franchisee opens under the Development Agreement, they must enter into a separate Franchise Agreement. This agreement will be on Del Taco's then-current form, which may have terms that differ from the Franchise Agreement attached to the current FDD.
This requirement is standard practice in the franchise industry, as it allows the franchisor to maintain control over each individual location while granting development rights for a larger territory. Prospective franchisees should carefully review the terms of both the Development Agreement and the then-current Franchise Agreement to understand their obligations and the potential changes in terms for each new location they open.