Does the Del Taco franchise agreement specify any adjustments that can be made to the payment for Business Assets?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
As a condition of Del Taco's review of a proposed site, Del Taco may require Developer to pay for (or reimburse Del Taco for the costs of) a trade area survey analysis if the proposed site is within certain distance of any existing Restaurant as specified in Del Taco's then-current business impact policy.
Depending on the results of any such trade area survey analysis, Del Taco may (a) reject a proposed site, or (b) as a condition for Del Taco's approval of the proposed site, (i) require Developer to make a business impact payment to any affected franchisee(s) in accordance with Del Taco's then-current business impact policy, or (ii) notwithstanding any prior agreement to the contrary, reduce or withhold any development incentives to offset projected impacts upon any existing company-owned Restaurants in accordance with the then-current business impact policy.
Source: Item 23 — RECEIPTS (FDD pages 59–325)
What This Means (2025 FDD)
According to the 2025 Del Taco Franchise Disclosure Document, the franchisor may require a business impact payment or reduce/withhold development incentives based on a trade area survey analysis. Specifically, if a proposed Del Taco site is within a certain distance of an existing restaurant, Del Taco may require the developer to pay for a trade area survey analysis.
Depending on the results of this survey, Del Taco has the option to reject the proposed site. Alternatively, as a condition for approving the site, Del Taco can require the developer to make a business impact payment to any affected franchisees. Del Taco can also reduce or withhold any development incentives to offset projected impacts on existing company-owned restaurants. These adjustments are made in accordance with Del Taco's then-current business impact policy.
This policy ensures that new locations do not negatively impact existing franchisees or company-owned restaurants. The business impact payment and adjustments to development incentives serve as a mechanism to compensate for any potential loss of revenue or market share. This is a fairly common practice in franchising, as franchisors seek to balance growth with the financial health of their existing franchisees.