Does Del Taco guarantee a franchisee's leases?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
14.1.7 Assign Leases; Modification of Premises. Del Taco shall have the right and option, but not the obligation, to acquire the Leases for the Restaurant, or otherwise acquire the right to occupy the premises. Del Taco may assign or delegate this right or option to any of Del Taco's affiliates or a third party designee, without notice to, or request for approval from, the landlord or lessor of the premises. If Del Taco or its assignee or delegatee does not elect or is unable to exercise any option Del Taco may have to acquire the leases or subleases for the premises of the Restaurant, or otherwise acquire the right to occupy the premises, Franchisee shall make such modifications or alterations to the premises operated hereunder (including the changing of the telephone number) immediately upon termination or expiration of this Agreement as may be necessary to distinguish the appearance of said premises from that of other Del Taco Restaurants, and shall make such specific additional changes thereto as Del Taco may reasonably request for that purpose. In addition, Franchisee shall cease use of, and if Del Taco requests shall transfer to Del Taco, all telephone numbers, customer "loyalty" lists, and any domain names, websites, email addresses, and any other identifiers, whether or not authorized by Del Taco, used by Del Taco while operating the Restaurant, and shall promptly execute such documents or take such steps necessary to remove reference to the Restaurant from all trade or business telephone directories, including "yellow" and "white" pages, or at Del Taco's request transfer same to Del Taco. If Franchisee fails or refuses to comply with the requirements of this Section 14.1.7, Del Taco (or its designee) shall have the right to enter upon the premises of the Restaurant, without being guilty of trespass or any other tort, for the purpose of making or causing to be made such changes as may be required, at Franchisee's expense, which expense Franchisee agrees to pay upon demand.
Source: Item 10 — FINANCING (FDD page 31)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, Del Taco does not guarantee a franchisee's leases. However, Del Taco maintains certain rights regarding the leases. According to Item 22, Del Taco has the right and option, but not the obligation, to acquire the leases for the Restaurant or otherwise acquire the right to occupy the premises. Del Taco may assign or delegate this right or option to any of Del Taco's affiliates or a third party designee, without notice to, or request for approval from, the landlord or lessor of the premises.
If Del Taco or its assignee or delegatee does not elect or is unable to exercise any option Del Taco may have to acquire the leases or subleases for the premises of the Restaurant, or otherwise acquire the right to occupy the premises, the franchisee is responsible for making modifications or alterations to the premises, including changing the telephone number, to distinguish the appearance of the premises from other Del Taco Restaurants upon termination or expiration of the agreement. The franchisee must also cease use of and transfer to Del Taco all telephone numbers, customer loyalty lists, domain names, websites, email addresses, and any other identifiers used while operating the Restaurant.
If the franchisee fails to comply with these requirements, Del Taco has the right to enter the premises to make the necessary changes at the franchisee's expense. This clause ensures that Del Taco can maintain control over the brand's image and customer relationships even after a franchise agreement ends, and that Del Taco has the option to take over a restaurant location if necessary.