What happens to the Del Taco franchise if the franchisee dies or becomes disabled?

According to Del Taco's 2025 Franchise Disclosure Document, the franchise agreement addresses the possibility of a franchisee's death or disability. Specifically, Del Taco will not unreasonably withhold consent to a transfer of the franchise to a third party within 6 months, provided that the transferee meets Del Taco's general conditions for transfer. This means that if a franchisee dies or becomes disabled, their business can be transferred to a qualified third party, subject to Del Taco's approval.

This provision offers some flexibility and protection for the franchisee and their family in the event of unforeseen circumstances. By allowing a transfer to a qualified third party, the franchisee's estate or family can potentially recoup some of the investment made in the franchise. It also ensures that the Del Taco location can continue operating under new management, maintaining the brand's presence in the market.

It is important to note that the transfer is subject to Del Taco's approval, and the transferee must meet the general conditions for transfer. These conditions likely include financial qualifications, management experience, and other criteria that Del Taco deems necessary to ensure the continued success of the franchise. A prospective franchisee should carefully review the franchise agreement and discuss these transfer conditions with Del Taco to fully understand the requirements and potential limitations.

While the FDD excerpt provides a general overview of the transfer process in the event of death or disability, it does not detail all the specific steps and requirements involved. A prospective franchisee should seek clarification from Del Taco regarding the specific procedures, documentation, and approvals needed to facilitate such a transfer. Understanding these details will help the franchisee and their family prepare for any eventuality and ensure a smooth transition if the need arises.