If required by Del Taco, what is the franchisee obligated to do regarding the Del Taco gift card program?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
- 5.20 Gift Cards.
If Del Taco requires, Franchisee agrees to participate in the gift card program(s) that Del Taco specifies.
For this purpose, Franchisee must purchase the software, hardware, blank cards, and other items needed to sell and process gift cards or stored value cards, which Del Taco may specify in the Manuals or otherwise in writing.
Franchisee also agrees to pay such monthly and perswipe transaction fees as may be required by the vendor of the gift card system.
Franchisee must sell or honor gift cards only in accordance with Del Taco's written standards.
Franchisee must account for all gift card sales, gift card redemptions, and other gift card transactions in the manner Del Taco specifies in the Manuals.
Franchisee must maintain sufficient cash reserves to pay Del Taco or other franchisees as part of any network-wide periodic reconciliation of the gift card program.
Franchisee shall pay Del Taco or make payments as specified by Del Taco, in such amounts and at such times as directed by Del Taco, in accordance with Del Taco's gift card rules, programs and policies.
Franchisee agrees not to sell, issue, or redeem gift certificates other than gift cards that Del Taco has approved in writing.
Source: Item 22 — CONTRACTS (FDD pages 58–59)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, if Del Taco requires franchisee participation in a gift card program, the franchisee must adhere to several obligations. The franchisee must purchase the necessary software, hardware, blank cards, and other items to sell and process gift cards, as specified by Del Taco in its manuals or in writing. This ensures that all franchisees use a standardized system compatible with Del Taco's overall program.
Additionally, the franchisee is responsible for paying monthly and per-swipe transaction fees to the vendor of the gift card system. The franchisee must also sell and honor gift cards in accordance with Del Taco's written standards, ensuring consistent application of the gift card program across all locations. Proper accounting for all gift card sales, redemptions, and other transactions is mandatory, following the methods Del Taco outlines in its manuals.
Furthermore, the franchisee must maintain sufficient cash reserves to cover payments to Del Taco or other franchisees as part of any network-wide reconciliation of the gift card program. The franchisee is obligated to make payments to Del Taco as directed, following Del Taco's gift card rules, programs, and policies. Finally, franchisees are prohibited from selling, issuing, or redeeming any gift certificates other than the gift cards that Del Taco has approved in writing, maintaining control over the types of stored value products offered.
These requirements ensure uniformity and financial stability within the Del Taco gift card program, protecting both the brand and the participating franchisees. A prospective franchisee should carefully consider these obligations and associated costs when evaluating the Del Taco franchise opportunity.