What happens if a Del Taco franchisee materially breaches the contract, and how long do they have to cure it?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
b) Termination for Cause. The Company shall have the right to terminate this Contract or Franchisee's participation in the Platform immediately for a material breach of this Contract, provided such material breach is not cured within thirty (30) days after written notice of the breach or such material breach is incurable. Termination shall not constitute an election of remedies.
e) Cross Default.
Franchisee's breach of this Contract resulting in its termination for cause pursuant to Section 7.b) hereof shall constitute a breach of the Franchise Agreement, for which Company may, among other things, immediately terminate the Franchise Agreement without providing Franchisee an opportunity to cure.
Source: Item 23 — RECEIPTS (FDD pages 59–325)
What This Means (2025 FDD)
According to the 2025 Del Taco Franchise Disclosure Document, if a franchisee materially breaches their contract, Del Taco has the right to terminate the contract immediately, provided the breach is not cured within thirty days after written notice of the breach, or if the breach is incurable.
This means that if a Del Taco franchisee violates a significant term of their agreement, Del Taco will provide written notice, giving the franchisee 30 days to resolve the issue. If the franchisee fails to fix the breach within this timeframe, Del Taco can terminate the agreement. However, if the breach is of a nature that it cannot be fixed, Del Taco can terminate the agreement immediately.
Additionally, the FDD states that a franchisee's breach of contract resulting in its termination for cause will also constitute a breach of the Franchise Agreement. In this case, Del Taco may immediately terminate the Franchise Agreement without providing an opportunity to cure the breach. This cross-default provision highlights the interconnectedness of the agreements and the serious consequences of a breach.