Is a Del Taco franchisee required to install additions or modifications to their computer hardware at their own expense if Del Taco determines it will benefit all franchisees?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
To ensure full operational efficiency and optimum communication capability between and among equipment and computer systems installed by Franchisee, Del Taco, and other franchisees, Franchisee agrees, at its expense, that Franchisee shall keep its Technology System in good maintenance and repair, and, at its expense, and following the determination that Del Taco shall have the right to make, to the effect that same will prove economically or otherwise beneficial to all System franchisees, that Franchisee shall promptly install such additions, changes, modifications, substitutions and/or replacement to Franchisee's computer hardware, software, telephone and power lines, and other related facilities, as Del Taco directs periodically in writing.
Source: Item 22 — CONTRACTS (FDD pages 58–59)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, franchisees are generally responsible for the costs associated with maintaining and updating their technology systems. Specifically, a Del Taco franchisee must keep its Technology System in good maintenance and repair at its own expense. Furthermore, if Del Taco determines that additions, changes, modifications, substitutions, and/or replacements to the franchisee's computer hardware, software, telephone and power lines, and other related facilities will prove economically or otherwise beneficial to all Del Taco System franchisees, the franchisee must promptly install these at their own expense. Del Taco will direct these changes periodically in writing.
This requirement ensures that all Del Taco locations maintain a consistent and up-to-date technology infrastructure, which Del Taco believes will benefit the entire franchise system. However, it also means that franchisees must be prepared to invest in technology upgrades as directed by Del Taco, even if they might not immediately see the individual benefit. The franchisee bears the financial burden of these upgrades, which can include hardware, software, and communication systems.
This type of clause is fairly common in franchise agreements, as franchisors often need to maintain system-wide standards and compatibility. Prospective Del Taco franchisees should carefully consider the potential costs of these required technology upgrades and factor them into their overall investment and operating budget. It would be prudent to discuss with existing franchisees the typical frequency and cost of such upgrades to better understand the financial implications.