What happens to a Del Taco franchise upon the death of the franchisee?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
pon Del Taco and Franchisee. The cost of any such appraisal shall be shared equally by Del Taco and Franchisee. If Del Taco elects to exercise its right under this Section 12.6, Del Taco shall have the right to set off all amounts due from Franchisee, and one-half (½) of the cost of the appraisal, if any, against any payment to the seller.
- 12.7 Transfer Upon Death. Within six (6) months after Franchisee's death (if a natural person) or the death of an owner, the executor, administrator, or other personal representative of the deceased will transfer the interest of the deceased in this Agreement or Franchisee to a third party approved by Del Taco. If no personal representative is designated or appointed and no probate proceedings are instituted with respect to the estate of the deceased, the distributee of the interest of the deceased must be approved by Del Taco.
Source: Item 22 — CONTRACTS (FDD pages 58–59)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, within six months of the death of a franchisee or owner, their representative (executor, administrator, or personal representative) must transfer the deceased's interest in the franchise agreement to a third party approved by Del Taco. If no personal representative is appointed or probate proceedings are initiated, the distributee of the deceased's interest must be approved by Del Taco.
If the distributee is not approved by Del Taco, they must transfer the interest to a Del Taco-approved third party within six months of the franchisee's death. Any transfer upon death is subject to the same terms and conditions as any other transfer made during the franchisee's lifetime.
This means that the franchisee's heirs or estate do not automatically inherit the franchise. Del Taco retains control over who becomes a franchisee to ensure brand consistency and operational standards are maintained. The estate will need to find a buyer acceptable to Del Taco within the specified timeframe, or Del Taco has the right to step in and find a buyer. This process ensures a smooth transition and protects the Del Taco brand.