What happens if the distributee of a deceased Del Taco franchisee is not approved by Del Taco?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
If the distributee is not approved by Del Taco, the distributee will transfer the interest of the deceased to a third party approved by Del Taco within six (6) months after the date of death of the deceased.
Source: Item 22 — CONTRACTS (FDD pages 58–59)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, if the distributee of a deceased franchisee is not approved by Del Taco, the distributee must transfer the deceased's interest to a third party approved by Del Taco. This transfer must occur within six months of the franchisee's death.
This provision ensures that Del Taco maintains control over who operates its franchises, even in the event of a franchisee's death. The company has the right to approve any new operator to ensure they meet the brand's standards and qualifications. This is a common practice in franchising, as the success of a franchise system relies on consistent quality and operational standards across all locations.
For a prospective franchisee, this means that their heirs or beneficiaries cannot automatically take over the franchise upon their death unless approved by Del Taco. If the distributee is not approved, they will need to find a suitable buyer who meets Del Taco's criteria and is willing to purchase the franchise within the specified timeframe. This could potentially create a complex and time-sensitive situation for the franchisee's family.