What interest rate does Del Taco charge on past due amounts?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee 1 | Amount | Due Date | Remarks |
|---|---|---|---|
| Interest | 7 percentage points in excess of the prime rate per annum as published in The Wall Street Journal | As incurred | We may charge interest on past due amounts. |
Source: Item 6 — OTHER FEES (FDD pages 18–21)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, Del Taco may charge interest on past due amounts. The interest rate is 7 percentage points in excess of the prime rate per annum as published in The Wall Street Journal. This interest is charged as incurred.
For a prospective franchisee, this means that if you fail to make payments on time to Del Taco, you will be subject to an interest charge on the outstanding balance. The specific interest rate will fluctuate based on the prime rate listed in The Wall Street Journal, plus a 7% margin. For example, if the prime rate is 5%, the interest rate charged by Del Taco would be 12%.
Franchisees should be aware of this policy and ensure timely payments to avoid incurring these interest charges, which could impact their profitability. It is a fairly standard practice in franchising to charge interest on overdue amounts, as it incentivizes prompt payment and compensates the franchisor for the time value of money and administrative costs associated with collecting late payments.