What is the maximum Development Fee for a Del Taco Development Agreement?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Term. This Agreement and all Development Rights shall expire 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.
Source: Item 23 — RECEIPTS (FDD pages 59–325)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, the Development Fee is calculated based on the number of restaurants a developer commits to opening. The developer must pay a non-refundable fee of $35,000 for the first restaurant and $10,000 for each additional restaurant scheduled for opening. Therefore, the maximum development fee is dependent on the number of restaurants the developer agrees to open under the Development Agreement.
For example, if a developer commits to opening five Del Taco restaurants, the Development Fee would be $35,000 for the first restaurant plus $10,000 for each of the four additional restaurants, totaling $75,000. This fee is payable upon the execution of the Development Agreement and is non-refundable to Del Taco.
However, Del Taco credits these development fees towards the initial franchise fees when the developer executes a Franchise Agreement for each location. Specifically, $35,000 is credited for the first restaurant and $10,000 for each subsequent restaurant, reducing the initial franchise fee owed for each location. The developer is responsible for paying the remaining balance of the initial franchise fee for the second and subsequent restaurants.
Prospective Del Taco developers should carefully consider the number of restaurants they commit to opening, as this directly impacts the initial Development Fee. While the fee is later credited towards franchise fees, it represents a significant upfront investment. Developers should also be aware that the Development Fee is non-refundable, emphasizing the importance of thorough planning and due diligence before entering into a Development Agreement with Del Taco.