What interest rate applies to any amount owing from the Developer to Del Taco that is not paid when due?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
- (d) Any amount owing from the Developer to Del Taco pursuant to this Section 5, if not paid when due, shall bear interest at the rate of seven percentage points in excess of the prime rate per annum, subject to any applicable limits imposed by California law, after the due date until paid.
Source: Item 23 — RECEIPTS (FDD pages 59–325)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, any amount owed by a Developer to Del Taco that is not paid when due will incur interest. The interest rate applied is seven percentage points above the prime rate per annum. However, this is subject to any applicable limits imposed by California law. The interest will be calculated from the due date until the payment is made.
For a prospective Del Taco developer, this means that failing to make timely payments can result in significant additional costs due to the high-interest rate. The prime rate is a benchmark interest rate used by banks, so the actual interest could fluctuate.
It is important for developers to maintain good financial management and ensure timely payments to avoid these charges. Developers should also be aware of California law, which may set a maximum limit on the interest rate that can be charged.