What is the exception to the abandonment rule for a Del Taco restaurant if the premises are damaged?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
- 13.2.4 If Franchisee at any time without the written consent of Del Taco ceases to operate or otherwise abandons the Restaurant for three (3) consecutive business days, or loses the right to possession of the Restaurant, or otherwise forfeits the right to do or transact business in the jurisdiction where the Restaurant is located; provided, however, that if, through no fault of Franchisee, the premises are damaged or destroyed by an event such that repairs or reconstruction cannot be completed within ninety (90) days thereafter, then Franchisee shall have thirty (30) days after such event in which to apply for Del Taco's approval to relocate and/or reconstruct the Restaurant, which approval shall not be unreasonably withheld;
Source: Item 22 — CONTRACTS (FDD pages 58–59)
What This Means (2025 FDD)
According to the 2025 Del Taco Franchise Disclosure Document, a franchisee may be at risk of violating their agreement if they cease to operate or abandon the restaurant for three consecutive business days without written consent from Del Taco. However, there is an exception to this rule.
If the Del Taco premises are damaged or destroyed through no fault of the franchisee, and repairs or reconstruction cannot be completed within 90 days, the franchisee has 30 days after the event to apply for Del Taco's approval to relocate or reconstruct the restaurant. Del Taco's approval for relocation or reconstruction cannot be unreasonably withheld.
This clause protects the franchisee from being penalized for abandonment in situations beyond their control, such as natural disasters or accidental damage to the property. It also provides a reasonable timeframe for the franchisee to seek approval for relocation or reconstruction, ensuring they are not immediately in breach of contract due to circumstances beyond their control.