What factors does Del Taco consider when approving a franchise location?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
The factors that we consider in approving your location include the property's location, the general character and population density of the neighborhood, demographic characteristics, traffic patterns, lot size and configuration, parking accommodations and ratios established by local zoning ordinances, competition from other businesses and access and visibility of the property from adjoining roads or highways.
We have implemented a business impact policy, under which you may be required to reimburse us for a Trade Area Survey Analysis and make a business impact payment to an existing franchisee as a condition for our approval of your proposed location if your proposed location is within a specified proximity of the existing restaurant (even if outside its Protected Area) and is anticipated to have a specified business impact upon the existing restaurant. Any business impact policy we implement may be modified, suspended, discontinued, or waived by us at any time.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 31–38)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, location approval is a critical step in the franchising process. The prospective franchisee is responsible for selecting a location and submitting it to Del Taco for review. Del Taco may visit the proposed site, but is not obligated to do so until a complete information package is submitted. Del Taco will then provide written acceptance or rejection within 45 days of receiving all required information. Failure to obtain approval in a timely manner can lead to termination of the Franchise Agreement.
Del Taco considers several factors when evaluating a potential location. These include the property's location, the general character and population density of the neighborhood, demographic characteristics, traffic patterns, lot size and configuration, parking accommodations and ratios established by local zoning ordinances, competition from other businesses, and the property's access and visibility from adjoining roads or highways. These criteria are typical for franchise location assessments, as they directly impact the potential customer base and operational efficiency of the restaurant.
Del Taco also has a business impact policy that may require the franchisee to reimburse Del Taco for a Trade Area Survey Analysis and make a business impact payment to an existing franchisee if the new location is too close to an existing Del Taco restaurant and is expected to negatively impact its business. This policy can be modified, suspended, discontinued, or waived by Del Taco at any time. This type of policy is designed to protect existing franchisees from cannibalization of sales due to new locations, which is a common concern in franchise systems.