What were the impairment charges and other expenses for Del Taco in 2024?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
Amount in 2024 is primarily comprised of a $2.2 million loss on sale of assets related to a Del Taco refranchising transaction that closed in the second quarter of 2024.
In connection with our impairment reviews performed during 2025 and 2024, the Company impaired certain Del Taco assets.
During the first quarter of 2024, the Company acquired 9 Del Taco franchise restaurants for $0.1 million as part of two separate transactions, and recognized related gains of $2.4 million. This amount is recorded in "Other operating expenses, net" in the accompanying condensed consolidated statements of earnings.
During the third quarter of 2024, the Company had identified triggering events that indicated the goodwill allocated to the Del Taco reporting unit might be impaired. As a result, the Company performed a quantitative test over the Del Taco reporting unit, noting that the fair value of the reporting unit was less than the carrying value, which resulted in an impairment of goodwill of $162.6 million at that time.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 58)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, the company incurred several expenses and charges related to impairment and other operating activities in 2024. Specifically, Del Taco recognized a $2.2 million loss on the sale of assets due to a refranchising transaction that occurred in the second quarter of 2024. Additionally, the company impaired certain Del Taco assets during impairment reviews conducted in 2024.
In the first quarter of 2024, Del Taco acquired 9 franchise restaurants for $0.1 million, which resulted in a gain of $2.4 million. This gain was recorded in "Other operating expenses, net." Furthermore, during the third quarter of 2024, a triggering event led to a quantitative test on the Del Taco reporting unit, resulting in a goodwill impairment of $162.6 million.
Prospective franchisees should note that these figures reflect specific activities and accounting treatments during 2024. Understanding these financial details can provide insight into Del Taco's strategic decisions regarding refranchising, asset management, and goodwill valuation. It's important to review the notes to the condensed consolidated financial statements for a comprehensive understanding of these expenses and their impact on Del Taco's financial performance.