What factors can affect labor costs for a Del Taco restaurant?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
n the area of the country in which (5) your Restaurant operates and the specific shipping costs involved in getting the products to your Restaurant.
- Labor includes wages paid to all hourly and management employees working in the Restaurant. (6) Your cost could vary depending on the prevailing wage rates of the area of the country in which
- your Restaurant operates and the specific labor laws. This item does not include owners' wages, draws, or other compensation.
- (7) Benefits include all employer and payroll taxes, including worker's compensation, plus amounts for vacation, health insurance and Restaurant manager bonuses.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 47–54)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, several factors can influence labor costs for a franchisee. The prevailing wage rates in the specific area where the Del Taco restaurant operates are a primary driver, as labor costs include wages paid to all hourly and management employees. Therefore, franchisees in areas with higher minimum wages or a more competitive labor market should anticipate higher labor expenses.
Benefit costs, which encompass employer and payroll taxes (including worker's compensation), vacation time, health insurance, and restaurant manager bonuses, also play a significant role. The amount of vacation time granted, the type and extent of insurance coverage provided to employees, and the specifics of the worker's compensation program can all cause a franchisee's costs to deviate from those of Del Taco's company-owned restaurants. These benefits are a substantial part of the overall labor expenses, and differences in these offerings can lead to considerable variations in costs.
It is important to note that the labor costs discussed in the FDD do not include wages, draws, or other compensation for the owner. This means a franchisee must factor in their own compensation separately when assessing the overall profitability of the Del Taco business. Understanding these variables is crucial for prospective franchisees to accurately estimate their potential operating expenses and financial performance.