What monetary obligations must a Del Taco franchisee satisfy to be eligible for renewal?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
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;
Source: Item 22 — CONTRACTS (FDD pages 58–59)
What This Means (2025 FDD)
According to the 2025 Del Taco Franchise Disclosure Document, a franchisee must meet specific monetary obligations to be eligible for renewal. The franchisee must have satisfied all monetary obligations owed to Del Taco and its affiliates, and must have consistently met these obligations throughout the initial franchise term. This indicates that all fees, royalties, and other payments required by the franchise agreement must be current and up-to-date.
In addition to satisfying all outstanding monetary obligations, the franchisee is also required to pay a renewal fee. This renewal fee is equal to the greater of $35,000 or Del Taco's then-current initial franchise fee for a new Del Taco restaurant. This fee must be paid when the franchisee delivers written notice of their election to renew the franchise agreement.
Furthermore, upon executing the renewal franchise agreement, the franchisee must pay a Promotional Fee. This fee is equal to the greater of $10,000 or the Promotional Fee then being charged to new franchisees. This Promotional Fee is intended to support marketing and promotional activities for the restaurant. These financial obligations, along with other non-monetary requirements, determine a franchisee's eligibility for renewal with Del Taco.