Who does the Del Taco Guaranty benefit, and who is bound by it?

According to the 2025 Del Taco Franchise Disclosure Document, each holder of an ownership interest in the Developer must execute the Personal Guarantee included with the agreement. This means that individuals with an ownership stake in the entity (the Developer) that is entering into the franchise agreement with Del Taco are required to provide a personal guarantee.

The personal guarantee serves to benefit Del Taco. By requiring this guarantee, Del Taco seeks to ensure that there is a direct line of financial responsibility from the owners of the franchise entity to Del Taco itself. This provides Del Taco with an additional layer of security, as they can pursue the personal assets of the guarantors if the franchise entity fails to meet its financial obligations under the franchise agreement.

In practical terms, this means that if you are planning to become a Del Taco franchisee through a corporate entity or partnership, and you hold an ownership interest in that entity, you will likely be required to sign a personal guarantee. This legally binds you to the financial obligations of the franchise, potentially putting your personal assets at risk if the franchise encounters financial difficulties. Prospective franchisees should carefully consider this obligation and seek legal and financial advice before signing any franchise agreement or personal guarantee.