What are the general insurance obligations for a Del Taco franchisee during the term of the Franchise Agreement?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
11.1 Franchisee shall comply with the following indemnification and insurance provisions:
11.1.1 Insurance Requirements.
During the term of this Agreement, Franchisee shall obtain and maintain in full force and effect, at its own expense, such insurance coverages as may be required of franchisees by Del Taco.
The current insurance requirements are listed in this Section; provided that Del Taco may update or modify the insurance requirements in the Manuals, may provide changed or modified insurance requirements in any lease agreement between Del Taco (or its Affiliates) and Franchisee, or may otherwise change or modify insurance requirements in writing by Company, at its sole discretion.
Prior to the opening of the Restaurant and thereafter, throughout the term of this Agreement, Franchisee shall furnish Del Taco with evidence satisfactory to Del Taco of such insurance coverages in effect in the form of Certificates of Insurance and any insurance policy endorsements required by Del Taco, and a copy of the Franchisee's insurance policy(ies), if requested by Del Taco.
Source: Item 22 — CONTRACTS (FDD pages 58–59)
What This Means (2025 FDD)
According to the 2025 Del Taco Franchise Disclosure Document, franchisees must obtain and maintain insurance coverage as required by Del Taco throughout the term of the Franchise Agreement. These insurance policies must be kept in full force and effect at the franchisee's own expense. The specific insurance requirements are listed in the FDD, but Del Taco retains the right to update or modify these requirements in the Manuals, in any lease agreement between Del Taco (or its Affiliates) and the franchisee, or in writing at its sole discretion.
Prior to opening the restaurant and throughout the term of the agreement, the franchisee must provide Del Taco with satisfactory evidence of the required insurance coverages. This evidence must be in the form of Certificates of Insurance and any insurance policy endorsements required by Del Taco, as well as a copy of the franchisee's insurance policy(ies) if requested by Del Taco.
This means that a prospective Del Taco franchisee needs to be prepared to budget for potentially changing insurance costs and to maintain the specific coverage levels and types mandated by Del Taco. Failure to maintain adequate insurance could result in a breach of the Franchise Agreement.