When does the Del Taco Guarantee terminate, and what obligations survive termination?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
This Guarantee shall terminate upon the termination or expiration of the Agreement, except that all obligations and liabilities of the undersigned which arose from events which occurred on or before the effective date of such termination shall remain in full force and effect until satisfied or discharged by the undersigned, and all covenants which by their terms continue in force after the expiration or termination of the Agreement shall remain in force according to their terms. Upon the death of an individual guarantor, the estate of such guarantor shall be bound by this Guarantee, but only for defaults and obligations hereunder existing at the time of death; and the obligations of the other guarantors will continue in full force and effect.
Source: Item 22 — CONTRACTS (FDD pages 58–59)
What This Means (2025 FDD)
According to the 2025 Del Taco Franchise Disclosure Document, the Guarantee terminates upon the termination or expiration of the Franchise Agreement. However, some obligations continue even after the agreement ends.
Specifically, any obligations or liabilities that arose from events occurring before the termination date remain in full effect until they are satisfied or discharged. Additionally, any covenants within the agreement that are explicitly designed to continue after the agreement's expiration or termination will remain in force according to their original terms. This ensures that certain responsibilities and duties of the franchisee, particularly those related to financial obligations or adherence to specific brand standards, do not simply disappear when the franchise agreement concludes.
In the event of the death of an individual guarantor, their estate remains bound by the Guarantee, but only for defaults and obligations existing at the time of death. The obligations of any other guarantors will continue unaffected. This provision protects Del Taco by ensuring that financial responsibilities are not evaded due to the death of a guarantor, while also limiting the estate's liability to existing defaults at the time of death.