What is the Del Taco franchisee's responsibility regarding restrictive covenants relating to the location?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
- 5.2.3 Franchisee shall be responsible for obtaining all zoning classifications and clearances which may be required by state or local laws, ordinances, or regulations or which may be necessary or advisable owing to any restrictive covenants relating to Franchisee's location.
After having obtained such approvals and clearances, Franchisee shall submit to Del Taco, for Del Taco's approval, final plans for construction based upon the preliminary plans and specifications.
Del Taco's review and approval of plans shall be limited to review of such plans to assess compliance with Del Taco's design standards for Restaurants.
Once approved by Del Taco, such final plans shall not thereafter be changed or modified without the prior written permission of Del Taco.
Any such change made without Del Taco's prior written permission shall constitute a material default under this Agreement and Del Taco may withhold its authorization to open the Restaurant for business until the unauthorized change is rectified (or reversed) to Del Taco's reasonable satisfaction.
Source: Item 22 — CONTRACTS (FDD pages 58–59)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, the franchisee is responsible for obtaining all zoning classifications and clearances that may be required by state or local laws, ordinances, or regulations, or which may be necessary or advisable due to any restrictive covenants relating to the franchisee's location. This means the franchisee must ensure the chosen site complies with all legal requirements and any restrictions that could affect the restaurant's operation.
After obtaining the necessary approvals and clearances, the franchisee must submit final construction plans to Del Taco for approval. Del Taco's review is limited to assessing compliance with their design standards. Once approved, these plans cannot be changed without Del Taco's written permission. Any unauthorized changes can result in a material default under the Franchise Agreement, and Del Taco may withhold authorization to open the restaurant until the changes are rectified.
In practical terms, a prospective Del Taco franchisee needs to conduct thorough due diligence on potential locations to identify any zoning or restrictive covenant issues upfront. This may involve consulting with local authorities and legal counsel. Failing to do so could lead to delays, additional expenses, or even the inability to operate the franchise at the desired location. The franchisee bears the financial burden of ensuring compliance with these regulations and covenants.