What were the gains on the sale of company-operated restaurants for Del Taco in 2023?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
NGS AND FRANCHISE ACQUISITIONS
Refranchisings — The following table summarizes the number of restaurants sold to franchisees and gains recognized in each fiscal year (dollars in thousands):
| 202 | 4 | 2023 | 2022 | |
|---|---|---|---|---|
| Restaurants sold to Jack in the Box franchisees | _ | 5 | 15 | |
| Restaurants sold to Del Taco franchisees | 47 | 111 | ||
| Proceeds from the sale of company-operated restaurants (1) | $ 19 | 9,400 | $ 85,221 | $ 6,391 |
| Broker commissions | _ | (1,614) | _ | |
| Net assets sold (primarily property and equipment) | (: | 5,310) | (17,101) | (1,565) |
| Goodwill related to the sale of company-operated restaurants | (6 | 5,835) | (35,544) | (948) |
| Franchise fees | ( | 1,266) | (3,086) | |
| Sublease liabilities, net |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 58)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, the gains on the sale of company-operated restaurants in 2023 were $17,998,000. This figure reflects the financial benefit Del Taco recognized from selling its company-owned restaurants to franchisees or other entities. These transactions are part of Del Taco's broader strategy of refranchising, where they shift from operating restaurants themselves to supporting franchise owners.
For a potential Del Taco franchisee, this information provides insight into the company's financial activities and strategic decisions. The gains from restaurant sales can be reinvested into the business, potentially enhancing support for franchisees through improved training, marketing, or technology. It also indicates Del Taco's willingness to restructure its operations, which could lead to new opportunities for franchisees to acquire existing restaurants.
However, it's important to note that gains from sales are a one-time event and may not be indicative of ongoing profitability. Prospective franchisees should consider this within the context of Del Taco's overall financial performance and strategic goals. Understanding the reasons behind these sales, such as market optimization or capital reallocation, can provide a more comprehensive view of the company's direction and its potential impact on franchisees.
Furthermore, the FDD also lists other financial details related to these transactions, such as the proceeds from the sale of company-operated restaurants, broker commissions, net assets sold, goodwill, franchise fees, sublease liabilities, lease terminations and other related gains or losses. Reviewing these figures in totality can provide a more complete picture of the financial implications of Del Taco's refranchising activities.