What is management required to do when preparing the condensed consolidated financial statements for Del Taco in conformity with U.S. GAAP?

According to Del Taco's 2025 Franchise Disclosure Document, when preparing the condensed consolidated financial statements in conformity with U.S. GAAP (Generally Accepted Accounting Principles), management is required to make certain assumptions and estimates. These assumptions and estimates affect the reported amounts of assets, liabilities, revenues, and expenses, as well as the disclosure of contingencies. This means that the financial statements are not based on exact figures but involve some level of judgment and prediction by the management team. These estimates can significantly impact the financial picture presented.

To make these assumptions and estimates, Del Taco's management may seek advice and consider information provided by actuaries and other experts in specific areas. This suggests that the company relies on professional advice to ensure the estimates are reasonable and accurate. However, the document also cautions that actual amounts could differ materially from these estimates. This implies a degree of uncertainty and risk, as the true financial performance of Del Taco may vary from what is reported in the condensed consolidated financial statements.

For a prospective franchisee, this information highlights the importance of understanding the estimates and assumptions used in preparing Del Taco's financial statements. While U.S. GAAP provides a standardized framework, the use of estimates introduces subjectivity. Franchisees should consider this when evaluating the financial health and performance of the company, as the reported figures are not definitive and are subject to change. It would be prudent for potential franchisees to discuss these assumptions with Del Taco and seek professional financial advice to fully understand the implications.