In the event of the Del Taco franchise agreement's expiration or termination, are there any provisions that will continue to be in effect?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
All provisions of this Agreement which, by their terms or intent, are designed to survive the expiration or termination of this Agreement, shall so survive the expiration and/or termination of this Agreement.
Franchisee shall immediately cease to operate the Restaurant, and shall not thereafter, directly or indirectly, represent to the public or hold Franchisee out as a present or former franchisee of Del Taco.
Franchisee shall immediately cease to operate the Restaurant, and shall not thereafter, directly or indirectly, represent to the public or hold Franchisee out as a present or former franchisee of Del Taco.
Franchisee shall have no right to use in its entity name (if applicable) the name "Del Taco," "Del" or any other names used by Del Taco.
This Guarantee shall terminate upon the termination or expiration of the Agreement, except that all obligations and liabilities of the undersigned which arose from events which occurred on or before the effective date of such termination shall remain in full force and effect until satisfied or discharged by the undersigned, and all covenants which by their terms continue in force after the expiration or termination of the Agreement shall remain in force according to their terms.
Del Taco shall have the option, to be exercised within thirty (30) days after termination or expiration of this Agreement, to purchase from Franchisee any or all of the equipment or inventory related to the operation of the Restaurant, at the lesser of the fair market value or Franchisee's book value. The book value shall be determined based upon a five (5) year straight line depreciation of original costs. For equipment that is five (5) or more years old, the parties agree that fair market value shall be deemed to be ten percent (10%) of the equipment's original cost.
Source: Item 22 — CONTRACTS (FDD pages 58–59)
What This Means (2025 FDD)
According to the 2025 Del Taco Franchise Disclosure Document, several provisions of the franchise agreement will remain in effect even after the agreement expires or is terminated. Generally, any provisions that are designed to survive termination, either by their explicit terms or by their intent, will continue to be in force.
Specifically, the franchisee must immediately cease operating the Del Taco restaurant and cannot represent themselves as a current or former franchisee. They must also stop using Del Taco's proprietary marks.
Additionally, if there are any outstanding obligations or liabilities that arose before the termination or expiration date, these will remain in full effect until they are satisfied or discharged. This ensures that any financial or legal responsibilities are not nullified simply by the end of the franchise agreement. Del Taco also has the option to purchase the restaurant's equipment and furnishings within 30 days of termination or expiration, at the lesser of fair market value or depreciated book value. For equipment older than five years, the fair market value is considered to be 10% of the original cost.