Can Del Taco establish businesses other than Del Taco Restaurants within a franchisee's Protected Area?

According to Del Taco's 2025 Franchise Disclosure Document, Del Taco retains the right to establish, operate, and license others to establish and operate businesses other than Del Taco restaurants both within and outside a franchisee's protected area. This includes the right to establish, operate, and license co-branded or multi-branded restaurants or food-related businesses that use Del Taco's trademarks along with other brands, even if they offer similar menu items.

This provision means that a Del Taco franchisee's protected area does not prevent Del Taco itself from opening or licensing other types of businesses, including those that might compete with the franchisee's Del Taco restaurant. These could be entirely different concepts or co-branded ventures. Del Taco also retains the right to sell menu items, products, and services through Alternative Points of Distribution within the Protected Area, such as outlets on military bases, college campuses, hospitals, fairs, casinos, airports, and larger retail outlets like Wal-Mart and Home Depot.

This is a significant consideration for prospective franchisees as it limits the exclusivity of their protected area. While Del Taco agrees not to operate or license another Del Taco Restaurant within a one-mile radius of the franchisee's location (with some exceptions), they can still introduce other business models or alternative distribution points that could draw customers away from the traditional Del Taco restaurant.

Therefore, a potential franchisee should carefully evaluate the market and competitive landscape, understanding that Del Taco retains considerable freedom to operate other businesses, including potentially competitive ones, within or near their protected area. This factor should be weighed into their financial projections and overall assessment of the franchise opportunity.