Is a Del Taco franchisee obligated to operate the restaurant at a specific location?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
xecute a lease which shall be coterminous with the Franchise Agreement, or a binding agreement to purchase the site. Del Taco's approval of any lease is conditioned upon inclusion in the lease of the Addendum to Lease attached to the Franchise Agreement as Exhibit G. However, Del Taco shall not be responsible for review of the Lease for any terms other than those contained in the Addendum to Lease.
- 7. Approved Location: After the location for the Restaurant is consented to by Del Taco pursuant to Section 4 hereof and leased or acquired by Franchisee pursuant to Section 5 hereof, the location shall constitute the approved location described in Section 1.1 of the Franchise Agreement. The Location shall be specified on Exhibit A to the Franchise Agreement, and shall become a part the Franchise Agreement. The Protected Area, as defined under Section 1.2 of the Franchise Agreement, shall be the geographic area thereafter described in Exhibit A to the Franchise Agreement, and shall become a part of the Franchise Agreement. Franchisee hereby acknowledges and agrees that consent by Del Taco of a site does not constitute an assurance, representation, or warranty of any kind, express or implied, as to the suitability of the site for the Restaurant or for any other purpose. Consent by Del Taco of the site indicates only that Del Taco believes the site complies with acceptable minimum criteria established by Del Taco solely for its purposes as of the time of the evaluation. Both Franchisee and Del Taco acknowledge that application of criteria that have been effective with respect to other sites and premises may not be predictive of potential for all sites and that, subsequent to approval by Del Taco of a site and demographic factors, such as competition from other similar businesses, included in or excluded from criteria used by Del Taco could change, thereby altering the potential of a site. Such factors are unpredictable and are beyond the control of Del Taco. Del Taco shall not be responsible for the failure of a site approved by Del Taco to meet Franchisee's expectations as to revenue or operational criteria. Franchisee further acknowledges and agrees that its acceptance of a franchise for the operation of the Restaurant at the site is based on its own independent investigation of the suitability of the site.
- 8. Entire Agreement: This Addendum shall be considered an integral part of the F
Source: Item 22 — CONTRACTS (FDD pages 58–59)
What This Means (2025 FDD)
According to the 2025 Del Taco Franchise Disclosure Document, a franchisee is obligated to operate the restaurant at a specific location. Once Del Taco approves a location, as detailed in Section 4 of the franchise agreement, and the franchisee leases or acquires it per Section 5, that location becomes the 'approved location,' as specified in Section 1.1 of the Franchise Agreement and Exhibit A. This location is then incorporated into the Franchise Agreement.
Del Taco's consent of a site doesn't guarantee its suitability or success. The FDD states that Del Taco's approval only indicates that the site meets the company's minimum criteria at the time of evaluation. Factors such as competition and demographic changes can affect a site's potential, and Del Taco isn't liable if the location fails to meet the franchisee's expectations regarding revenue or operational criteria. The franchisee is responsible for independently investigating the site's suitability.
Upon termination or expiration of the franchise agreement, if Del Taco doesn't acquire the leases for the restaurant, the franchisee must modify the premises to differentiate it from other Del Taco restaurants. This includes changing the telephone number and making other changes Del Taco requests. The franchisee must also cease using and transfer to Del Taco all telephone numbers, customer loyalty lists, domain names, websites, email addresses, and any other identifiers used while operating the restaurant.