How does the franchise fee differ for a nontraditional Del Taco restaurant?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Nontraditional Restaurants. If you are developing a nontraditional restaurant, certain categories of the identified costs may vary significantly from those disclosed above. We anticipate that at least the following expenditures will vary from those previously stated: The Franchise Fee will be $1,750 per year of the term of your Franchise Agreement. On-Site Improvements are likely to range from $0 to $500,000. On-Site Improvement costs will vary depending on whether exterior site area improvements will be part of your development. Building or space improvement costs will vary depending on the size of the space being leased, type of finishes specified, how much back of house infrastructure may be shared with other tenants, if there is dining room area included in your development, as well as other site-specific development costs based upon landlord, regional, local, or municipal influences, and are likely to range from $370,000 to $800,000 and up. Like the building or space improvement cost influences noted above, furnishings, fixtures and equipment costs will vary and are likely to range from $250,000 to $750,000. An environmental assessment will likely range from $2,500 to $34,000. All other initial costs disclosed above are expected to be approximately the same for both traditional and non-traditional restaurants. Accordingly, we anticipate that the overall cost for a nontraditional restaurant will likely range from
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 21–28)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, the franchise fee structure differs for nontraditional restaurants compared to traditional locations. For a nontraditional Del Taco restaurant, the franchise fee is $1,750 per year of the Franchise Agreement's term.
This contrasts with the standard franchise fee of $35,000 for a traditional Del Taco restaurant. This difference can significantly lower the initial investment for franchisees interested in opening a Del Taco in a nontraditional location such as an airport, university campus, or food court.
However, while the franchise fee is lower, other costs associated with nontraditional locations, such as on-site improvements and building or space improvements, can vary significantly. The FDD notes that on-site improvements could range from $0 to $500,000, and building or space improvements could range from $370,000 to $800,000 and up. Furnishings, fixtures, and equipment costs are also likely to vary, ranging from $250,000 to $750,000. An environmental assessment is estimated to range from $2,500 to $34,000. The overall cost for a nontraditional Del Taco restaurant is projected to range from $856,000 to $2,543,000.
Prospective franchisees should carefully consider the specific requirements and potential costs associated with nontraditional locations, as these can vary widely based on the site and landlord requirements. While the reduced franchise fee may seem attractive, it is essential to evaluate the total investment required to ensure financial feasibility.