After the Del Taco franchise terminates or expires, for how long is the franchisee prohibited from having an interest in a competitive business, and within what geographic area?

According to Del Taco's 2025 Franchise Disclosure Document, a franchisee is subject to certain non-competition covenants after the franchise terminates or expires. Specifically, for a period of two years after the franchise terminates or expires, the franchisee cannot operate a competitive business within two miles of their original Del Taco location or any other existing Del Taco Restaurant. This restriction is subject to applicable state laws, which may modify or supersede the terms outlined in the franchise agreement.

A "competitive business" is defined as a restaurant or food service business that offers one or more Mexican or similar style menu items and operates in a quick service, fast food, or fast casual format. This definition is important because it clarifies the scope of the non-compete agreement, ensuring that franchisees understand what types of businesses they are prohibited from operating after leaving the Del Taco system.

Prospective franchisees should be aware of these post-termination restrictions, as they could significantly impact their ability to pursue other business ventures in the food service industry after their Del Taco franchise agreement ends. It is essential to consult with legal counsel to understand the enforceability and specific implications of these non-compete clauses in their state, as state laws can vary and may provide additional protections or limitations.