What happens to the Extension Fee if the Del Taco Franchise Agreement is executed?

According to the 2025 Del Taco Franchise Disclosure Document, the Extension Fee is credited towards the payment of the Franchise Fee for the specific location once the applicable Franchise Agreement is executed. This means that if a Del Taco developer needs to extend their development deadlines and pays an Extension Fee, that fee isn't simply an expense; it reduces the amount they owe for the franchise fee when they eventually sign the Franchise Agreement for that location.

To request an extension, the Del Taco developer must provide at least six months' advance written notice to Del Taco. For each twelve-month extension that Del Taco approves in writing, the developer must pay an Extension Fee of $5,000 times the number of development deadlines they wish to extend. They also need to sign an amendment to the Development Agreement, which includes a general release in favor of Del Taco.

It's important to note that the Extension Fee is earned by Del Taco upon receipt and is non-refundable, except in the specific case where it's credited towards the Franchise Fee upon the Franchise Agreement's execution. In all other situations, Del Taco retains the Extension Fees. This policy incentivizes developers to meet their original deadlines while providing a mechanism for flexibility, albeit at a cost, if delays occur. This is a fairly standard practice in franchising, where fees are often non-refundable but may be applied to future obligations under certain conditions.