Is the Initial Franchise Fee for Del Taco uniform across all agreements?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
re immediately upon the required opening date for the last Restaurant set forth on the Development Schedule or the actual opening date for the last Restaurant, whichever first occurs, unless sooner terminated in accordance with the terms and conditions of this Agreement.
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- Time of Essence. Time is of the essence of this Agreement.
5. Fees. The Developer shall pay to Del Taco the following fees:
- (a) In consideration of the Development Rights granted in this Agreement, the Developer shall pay to Del Taco a fully non-refundable Development Fee of $35,000 for the first Restaurant scheduled for opening and $10,000 for each additional Restaurant scheduled for opening, payable upon execution and delivery by the Developer of this Agreement. As between Developer and Del Taco, Del Taco shall earn the Development Fee upon the execution of this Agreement and shall not have any obligation to refund any portion of the Development Fee.
- (b) Upon the execution by the Developer of a Franchise Agreement, Del Taco shall credit from the Development Fee $35,000 for the first Restaurant scheduled for opening and $10,000 for each subsequent Restaurant scheduled for opening towards the initial franchise fee for each of those Restaurants. The Developer shall pay the balance of the initial franchise fee for the second and each subsequent Restaurant scheduled for opening.
Source: Item 23 — RECEIPTS (FDD pages 59–325)
What This Means (2025 FDD)
Based on the 2025 Del Taco Franchise Disclosure Document excerpts, the initial franchise fee structure is not entirely uniform, as it can be influenced by development agreements. Specifically, the document mentions a Development Fee of $35,000 for the first restaurant and $10,000 for each subsequent restaurant, which is credited towards the initial franchise fee upon execution of the Franchise Agreement.
For developers opening multiple Del Taco restaurants, the initial franchise fee can be offset by these development fee credits. This means the actual out-of-pocket initial franchise fee paid may vary depending on how many restaurants the developer commits to opening and the associated credits they receive.
Additionally, the document refers to addenda that modify provisions of the Franchise Agreement related to development in emerging markets, and incentives that reduce royalty fees. It also mentions that in the event a developer breaches the Development Agreement or Franchise Agreement, they shall immediately pay Del Taco the amount of any reduction in the Initial Franchise Fees or Royalty Fees. While these excerpts do not explicitly state that the initial franchise fee itself changes, they do suggest that the overall financial obligations can be adjusted based on specific agreements and compliance with development schedules.