What must a Del Taco franchisee draw upon to conduct grand opening and promotional activities?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
5.3.2 Franchisee shall draw upon the Promotional Fee as described in Section 3.2 to conduct such grand opening and promotional activities as Del Taco may require.
3.2 Promotional Fee.
Franchisee shall pay Del Taco a fee of $10,000 (the "Promotional Fee") upon execution of this Agreement.
The Promotional Fee shall be drawn upon by Franchisee through reimbursements submitted to Del Taco in the manner that Del Taco designates or through direct payments by Del Taco to vendors in order to promote the Restaurant within a year of the Restaurant's opening.
Franchisee shall not contract for nor make any expenditures related to the promotion of the Restaurant unless Franchisee has submitted a request and received the written approval of Del Taco.
Franchisee shall submit invoices for promotional expenditures to Del Taco for direct payment to the vendor or for reimbursement.
Del Taco shall not pay or reimburse food or paper costs.
Del Taco shall not have any obligation to refund any portion of the Promotional Fee for any reason.
If Franchisee fails to spend all of the Promotional Fee within 12 months after the opening of the Restaurant, Franchisee shall forfeit the unused portion of the fee and Del Taco shall apply it toward Del Taco's general advertising or marketing programs.
Source: Item 22 — CONTRACTS (FDD pages 58–59)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, a new franchisee must use the Promotional Fee to fund grand opening and promotional activities. This Promotional Fee is $10,000, which is paid upon the signing of the franchise agreement.
The franchisee can access these funds through reimbursement requests submitted to Del Taco or via direct payments from Del Taco to approved vendors. However, the franchisee must obtain written approval from Del Taco before making any expenditures related to restaurant promotion. Invoices for promotional expenses must be submitted to Del Taco for payment or reimbursement, but Del Taco will not cover food or paper costs.
It is important to note that Del Taco is not obligated to refund any unused portion of the Promotional Fee. If the franchisee fails to spend the entire $10,000 within 12 months of the restaurant opening, the remaining funds will be forfeited and used by Del Taco for its general advertising or marketing programs. This arrangement ensures that promotional activities are conducted in accordance with Del Taco's standards and that unspent funds benefit the overall brand.