Does the Del Taco Franchise Agreement grant the right to operate a Del Taco restaurant at a single location?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
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The Franchise Agreement grants you the right to operate a Del Taco restaurant at a single location selected by you and approved by us. If an approved location has not been identified when you execute the Franchise Agreement, a Site Selection Addendum to the Franchise Agreement will identify market points as determined by us (the "Site Selection Area") which will be within an approximate one-mile radius in which you may search for a site. When establishing market points, we consider various information, such as the locations of other restaurants, direct and indirect competition, store characteristics, historical consumer source surveys, sales history, mobile customer data, demographics, and psychographics, among others. Once approved by us, we will list the Restaurant's approved location on Exhibit A of the Franchise Agreement.
Subject to certain reserved rights in the Franchise Agreement, we will grant you a protected area around the approved location of the Restaurant (the "Protected Area"). The Protected Area is a circular area within
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a one-mile radius from the front door of your Del Taco Restaurant, excluding Alternative Points of Distribution (described in the Franchise Agreement).
You are required to operate the Restaurant only at the location we approve. You may not operate the Restaurant or offer or sell any products or services at or from any location other than the approved location identified in Exhibit A of the Franchise Agreement. We do not restrict you from soliciting or accepting food or beverage orders from consumers outside your Protected Area, including the internet, catalog sales, telemarketing, or direct marketing. However, we have the right to approve all advertising and marketing media and materials you wish to use. No restrictions exist that prevent us from soliciting or accepting orders from consumers inside your Protected Area in the same manner, and we will owe you no compensation if we do so. You may not relocate the Restaurant without our prior written consent. You must comply with our then-current site selection and construction standards.
We will not operate or license others the right to operate any Del Taco Restaurant at a physical premises located within the Protected Area (subject to the reservations and limitations described in the Franchise Agreement) during the term of your Franchise Agreement. Except as expressly limited by the previous sentence, we and our affiliates retain all rights with respect to Del Taco restaurants, other branded, cobranded, or multi-branded restaurants, the Proprietary Marks, the sale of similar or dissimilar products and services, and any other activities we deem appropriate whenever and wherever we desire.
The restrictions on our right to operate in your Protected Area do not apply to any Del Taco Restaurant existing or under development on the date the Franchise Agreement is signed. We are not required to pay you if we or our affiliates exercise any of the rights specified above inside or outside your Protected Area.
Development Agreement
If you sign a Development Agreement, you will have the right and obligation to develop an agreed-upon number of Del Taco restaurants within a defined geographic area (the "Development Area") during the term of, and subject to a prescribed schedule ("Development Schedule) and other conditions set forth in, the Development Agreement.
The size and scope of the Development Area, which will be set forth in Exhibit A to the Development Agreement when you execute your Development Agreement. The Development Area will be defined by market points as determined by us. When establishing market points, we consider various information, such as the locations of other restaurants, direct and indirect competition, store characteristics, historical consumer source surveys, sales history, mobile customer data, demographics, and psychographics, among others.
Source: Item 12 — TERRITORY (FDD pages 38–40)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, the Franchise Agreement does grant the right to operate a Del Taco restaurant at a single location. The location must be selected by the franchisee and approved by Del Taco. If a location is not yet approved when the Franchise Agreement is executed, a Site Selection Addendum will identify a Site Selection Area, within an approximate one-mile radius, where the franchisee can search for a site. Once Del Taco approves a location, it will be listed on Exhibit A of the Franchise Agreement.
Del Taco also grants a Protected Area around the approved location, which is a circular area within a one-mile radius from the front door of the Del Taco restaurant, excluding Alternative Points of Distribution. Franchisees are required to operate the restaurant only at the approved location and cannot operate or sell products or services from any other location without prior written consent from Del Taco. Franchisees may solicit and accept orders from consumers outside their Protected Area, but Del Taco has the right to approve all advertising and marketing materials.
It is important to note that Del Taco does not offer exclusive territories. Franchisees may face competition from other franchisees, company-owned outlets, or other channels of distribution. Additionally, Del Taco and its affiliates retain all rights to operate Del Taco restaurants, other branded restaurants, and sell similar or dissimilar products and services wherever they desire, with some limitations within the Protected Area. Jack in the Box restaurants, which are franchised by an affiliate of Del Taco, may be located near a Del Taco restaurant and may solicit orders from customers within the Protected Area.