What happens if Del Taco does not waive any of the conditions precedent before the Closing Date?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
- The following shall constitute conditions precedent to Seller's obligations under this Agreement. Seller shall determine, in its sole discretion, whether such conditions have been satisfied as of the Closing Date. In the event Seller does not waive any of the conditions set forth below prior to the Closing Date, this Agreement shall terminate, and the parties shall have no further obligations hereunder.
- (i) Seller shall have reviewed and approved Buyer's loan term sheets and(or) commitment letters, and such other information as may be reasonably requested by Seller, in its sole discretion, to determine Buyer's ability to obtain financing sufficient to complete the transaction contemplated in this Agreement. Buyer shall cooperate with Seller in connection with the foregoing condition by promptly providing to Seller any and all such documents and information requested by Seller.
- (ii) The terms and provisions of this transaction shall have been approved by Seller's executive management.
- (iii) Seller shall have reviewed and approved Buyer's financial status and liquidity, including, without limitation, Buyer's bank statements, financial statements, loan term sheets and(or) commitment letters, and such other information as may be requested by Seller, in its sole discretion, to determine Buyer's financial capability to complete the transaction contemplated in this Agreement. Buyer shall cooperate with Seller in connection with the foregoing condition by promptly providing to Seller any and all such documents and information requested by Seller.
- As an additional condition precedent for the Closing, prior to the Closing Date the parties shall have received the written consent to sublease each of the Locations from any third party where consent is required under any lease for a Location. Buyer shall be responsible for any reimbursements or payments due to any third parties in connection with obtaining any required consents.
Source: Item 23 — RECEIPTS (FDD pages 59–325)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, the agreement between the seller and buyer will terminate if Del Taco does not waive the conditions precedent before the Closing Date. In this case, neither party will have any further obligations to each other.
These conditions precedent relate to Del Taco's assessment of the buyer's financial capabilities. Specifically, Del Taco needs to review and approve the buyer's loan term sheets, commitment letters, financial status, and liquidity. Del Taco also needs to approve the overall terms of the transaction by its executive management. The buyer is obligated to cooperate with Del Taco by providing all necessary documents and information promptly.
Another condition precedent is obtaining written consent to sublease each location from any third party if required by the lease. The buyer is responsible for any reimbursements or payments to third parties to secure these consents. Therefore, it is crucial for a prospective Del Taco franchisee to provide all required financial documentation promptly and ensure all sublease consents are in order to avoid termination of the agreement.