What is the maximum renewal term length for a Del Taco franchise?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
f, the initial term of this Agreement shall commence on the Effective Date and expire on the date that is the earlier of (a) twenty (20) years after the opening date of the Restaurant or (b) the expiration date of the lease for the Restaurant premises, including all applicable extensions or renewals.
- 2.2 Renewal. Franchisee may, at its option, renew Franchisee's right to operate the Restaurant for one (1) additional term which shall be the lesser of (a) twenty (20) years or (b) the remaining term of the lease for the Restaurant premises, including all applicable extensions or renewals, subject to the following conditions, each of which must be met prior to such renewal:
- 2.2.1 Franchisee shall deliver to Del Taco a written notice of Franchisee's election to renew no fewer than twelve (12) months nor more than eighteen (18) months prior to the end of the initial term;
- 2.2.2 Franchisee shall pay in lieu of the initial franchise fee, a renewal fee equal to the greater of (a) $35,000 or (b) Del Taco's then-current initial franchise fee for a new Del Taco Restaurant when Franchisee delivers the written notice required under Section 2.2.1;
- 2.2.3 Franchisee shall not have received, prior to its election to renew, written notice of a default under this Agreement on more than 3 separate occasions and, from the time of Franchisee's election to renew through the expiration of the initial term, Franchisee or its affiliates shall not have been in default of any provision of this Agreement, any amendment to this Agreement, or any other agreement between Franchisee and Del Taco or its affiliates;
Source: Item 22 — CONTRACTS (FDD pages 58–59)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, a franchisee has the option to renew their franchise agreement for one additional term. The length of this renewal term is determined by whichever is shorter: a period of twenty years, or the remaining term of the restaurant's lease, including any applicable extensions or renewals.
To be eligible for renewal, the franchisee must meet several conditions. They must provide Del Taco with written notice of their intent to renew within a specific timeframe—no fewer than twelve months and no more than eighteen months before the end of the initial term. Additionally, they must pay a renewal fee, which is the greater of $35,000 or Del Taco's current initial franchise fee for new restaurants at the time of the renewal notice.
Furthermore, the franchisee must maintain a good standing with Del Taco. This means they should not have received written notice of default under the Franchise Agreement on more than three separate occasions prior to their election to renew. From the time they elect to renew until the initial term expires, they must not be in default of any agreement with Del Taco or its affiliates. Del Taco must also reasonably judge that the franchisee has substantially complied with all terms and conditions of their agreements and the operating standards set by Del Taco during the initial term. Meeting these conditions ensures that only franchisees who have consistently met Del Taco's standards are granted the opportunity to renew their franchise.