When must the Del Taco franchisee pay the site development fee to Del Taco?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
fications and layout and shall not relate to Franchisee's obligations with respect to any federal, state and local laws, codes and regulations including the applicable provisions of the ADA regarding the construction, design and operation of the Restaurant, which subjects shall be Franchisee's sole responsibility. If Del Taco or its affiliates provide site development services to Franchisee, Franchisee will be required to pay Del Taco a site
Source: Item 22 — CONTRACTS (FDD pages 58–59)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, if Del Taco or its affiliates provide site development services, the franchisee will be required to pay a site development fee. This fee can be up to $50,000 for the work Del Taco or its affiliates complete toward developing the site, in addition to covering Del Taco's out-of-pocket and internal overhead costs.
Importantly, this site development fee is not refundable. The FDD explicitly states that the franchisee must pay this fee before Del Taco or its affiliates perform any site development services. This means a franchisee needs to have the funds available upfront before any work begins on the site.
This requirement is fairly standard in the franchise industry, as franchisors often require payment for services before they are rendered. It is crucial for prospective Del Taco franchisees to factor this cost and payment timing into their initial investment and financial planning. Understanding this upfront payment obligation is essential for managing cash flow during the initial stages of setting up the franchise.