Can Del Taco establish and operate, and license others to establish and operate, any restaurants or other businesses that Del Taco or its Affiliates may operate or license as a result of any acquisition, consolidation, or merger, whether or not located within the Development Area and despite the proximity of such restaurants to the Development Area or their actual or threatened impact on sales at any Del Taco Restaurant?

According to Del Taco's 2025 Franchise Disclosure Document, Del Taco and its affiliates retain the right to establish, operate, and license others to establish and operate restaurants or other businesses resulting from acquisitions, consolidations, or mergers. This right applies regardless of the location of these businesses, whether inside or outside a franchisee's Development Area. It also applies irrespective of their proximity to existing Del Taco restaurants or any potential impact on sales at those restaurants. These other restaurants or businesses may operate under Del Taco's trademarks or other marks.

This provision means that even if a franchisee has exclusive development rights in a specific area, Del Taco can still establish or license other restaurants or businesses nearby if they result from a merger, acquisition, or consolidation. This can occur even if those new businesses impact the sales of the franchisee's Del Taco restaurants.

For a prospective franchisee, this clause represents a risk. While a franchisee may be granted a Development Area, Del Taco retains considerable freedom to expand its footprint through mergers and acquisitions, potentially creating competition for the franchisee's locations. It is important for potential franchisees to understand this risk and factor it into their investment decisions.