For a Del Taco franchise sale, what does the seller collect from the buyer through escrow?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
Seller shall collect from Buyer through escrow all sales tax in connection with this transaction on the personal property located at the Location ("Sales Tax(es)"), which the parties estimate to be as follows:
Rents, taxes and other charges due under the Subleases shall be prorated through Escrow D. as of the Closing Date.
At least one business day prior to the Closing Date, Buyer will deliver to Escrow immediately available funds in the amount of the Purchase Price payable at the Closing, the applicable Franchise Fees, plus Buyer's portion of any closing costs hereunder.
| (ii) | Buyer agrees and acknowledges that as a condition to Seller agreeing to sell the Locations to Buyer, at the Closing Buyer shall pay at least the sum of the Sales Taxes and any closing costs or prorations that are the responsibility of Buyer, from personal sources other than from any financing secured by t
Source: Item 23 — RECEIPTS (FDD pages 59–325)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, the seller collects sales tax from the buyer through escrow on the personal property located at the Del Taco location. The sales tax amount is estimated on a site-by-site basis. Additionally, rents, taxes, and other charges due under the subleases are prorated through escrow as of the closing date.
Prior to the closing date, the buyer must deliver to escrow immediately available funds for the purchase price, the applicable franchise fees, and the buyer's portion of any closing costs. The buyer and seller will also deliver fully executed franchise agreements, subleases, bills of sale, releases, and any other necessary documents to the escrow.
Furthermore, as a condition of the sale, the buyer must pay at least the sum of the sales taxes and any closing costs or prorations that are the responsibility of the buyer from personal sources other than from any financing secured by the buyer. This ensures that these obligations are met using the buyer's own funds, separate from any financing obtained for the overall purchase.