Can Del Taco establish minimum and maximum prices for menu items?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
ed suppliers.
- 5.24 Incentive and Loyalty Programs. Franchisee shall offer for sale, and will honor for purchases by customers, any incentive, convenience or loyalty programs which Del Taco may institute from time to time, and Franchisee shall do so in compliance with Del Taco's standards and procedures for such programs.
- 5.25 Prices. With respect to the sale of all Menu Items, products, or services, Franchisee shall have sole discretion as to the prices to be charged to customers;
Source: Item 22 — CONTRACTS (FDD pages 58–59)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, franchisees have sole discretion over the prices charged to customers for menu items, products, and services. However, Del Taco retains the right to establish, advertise, and promote minimum and maximum prices for these items, provided that it complies with applicable laws.
This means that while a Del Taco franchisee can generally set their own prices, Del Taco can implement price controls within certain limits. These price controls could be influenced by factors such as market conditions, competition, or promotional strategies. The FDD also states that Del Taco may establish pricing guidelines in its manuals, and franchisees agree to comply with these guidelines.
For a prospective franchisee, this indicates a degree of pricing flexibility but also the potential for Del Taco to influence or control pricing decisions. Franchisees need to stay informed about any pricing guidelines or minimum/maximum prices set by Del Taco and ensure compliance with these directives and all applicable laws. Understanding the balance between franchisee pricing discretion and franchisor price controls is crucial for managing profitability and competitiveness.