What happens if the Del Taco Restaurant lease expires?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
- 2.1 Term. Except as otherwise provided herein and unless sooner terminated in accordance with the provisions hereof, the initial term of this Agreement shall commence on the Effective Date and expire on the date that is the earlier of (a) twenty (20) years after the opening date of the Restaurant or (b) the expiration date of the lease for the Restaurant premises, including all applicable extensions or renewals.
14.1 Upon termination or expiration of this Agreement, all rights granted hereunder to Franchisee shall forthwith terminate, and:
- 14.1.1 Cease Operations.
Franchisee shall immediately cease to operate the Restaurant, and shall not thereafter, directly or indirectly, represent to the public or hold Franchisee out as a present or former franchisee of Del Taco.
- 14.1.2 Cease Use of Proprietary Marks.
14.1.7 Assign Leases; Modification of Premises. Del Taco shall have the right and option, but not the obligation, to acquire the Leases for the Restaurant, or otherwise acquire the right to occupy the premises. Del Taco may assign or delegate this right or option to any of Del Taco's affiliates or a third party designee, without notice to, or request for approval from, the landlord or lessor of the premises. If Del Taco or its assignee or delegatee does not elect or is unable to exercise any option Del Taco may have to acquire the leases or subleases for the premises of the Restaurant, or otherwise acquire the right to occupy the premises, Franchisee shall make such modifications or alterations to the premises operated hereunder (including the changing of the telephone number) immediately upon termination or expiration of this Agreement as may be necessary to distinguish the appearance of said premises from that of other Del Taco Restaurants, and shall make such specific additional changes thereto as Del Taco may reasonably request for that purpose. In addition, Franchisee shall cease use of, and if Del Taco requests shall transfer to Del Taco, all telephone numbers, customer "loyalty" lists, and any domain names, websites, email addresses, and any other identifiers, whether or not authorized by Del Taco, used by Del Taco while operating the Restaurant, and shall promptly execute such documents or take such steps necessary to remove reference to the Restaurant from all trade or business telephone directories, including "yellow" and "white" pages, or at Del Taco's request transfer same to Del Taco.
14.1.8 Option to Purchase Equipment and Furnishings. Del Taco shall have the option, to be exercised within thirty (30) days after termination or expiration of this Agreement, to purchase from Franchisee any or all of the equipment or inventory related to the operation of the Restaurant, at the lesser of the fair market value or Franchisee's book value. The book value shall be determined based upon a five (5) year straight line depreciation of original costs. For equipment that is five (5) or more years old, the parties agree that fair market value shall be deemed to be ten percent (10%) of the equipment's original cost.
Source: Item 22 — CONTRACTS (FDD pages 58–59)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, the franchise agreement's initial term ends on the earlier of either 20 years after the restaurant's opening date or the lease's expiration date, including any extensions or renewals. If the lease expires, the franchise agreement terminates unless it's been renewed or extended.
Upon termination or expiration of the franchise agreement, the franchisee must immediately cease operating the Del Taco restaurant and cannot represent themselves as a current or former franchisee. The franchisee must also stop using Del Taco's proprietary marks.
Del Taco has the option, but not the obligation, to acquire the leases for the restaurant premises. If Del Taco does not exercise this option and the agreement terminates or expires, the franchisee must modify the premises to differentiate it from other Del Taco restaurants, including changing the telephone number. The franchisee must also transfer all telephone numbers, customer loyalty lists, domain names, websites, email addresses, and any other identifiers to Del Taco. Del Taco also has the option to purchase the restaurant's equipment and furnishings within 30 days of the agreement's termination or expiration, at the lesser of fair market value or book value, with specific valuation rules for older equipment.