Does Del Taco need to approve the deductible amounts on the insurance policies required of a Del Taco franchisee?

According to Del Taco's 2025 Franchise Disclosure Document, all deductible amounts on the insurance policies that Del Taco requires must be disclosed in writing to Del Taco and are subject to their approval. This approval must be noted on the Certificate of Insurance.

Del Taco requires franchisees to obtain and maintain several types of insurance coverage. These include Commercial General Liability insurance of not less than $5,000,000, Business Automobile Liability insurance with a limit of not less than $1,000,000 per accident, and Workers' Compensation and Employer's Liability insurance with a limit not less than $1,000,000 per occurrence. Franchisees must also carry "All Risk" property insurance, Builders' All Risk insurance, and Cyber Liability insurance with a limit not less than $1,000,000 per occurrence.

This requirement means that a prospective Del Taco franchisee cannot independently decide on the deductible amounts for their insurance policies. Del Taco has the right to review and potentially reject deductible amounts they deem unacceptable. This is a fairly standard practice in franchising, allowing the franchisor to ensure adequate risk management across all franchise locations. Franchisees must provide Del Taco with Renewal Certificates of Insurance no later than thirty days before the expiration date of all policies.

For a potential franchisee, this underscores the importance of discussing insurance requirements in detail with Del Taco during the due diligence process. Understanding the acceptable deductible ranges and the factors Del Taco considers during the approval process can help in budgeting for insurance costs and avoiding potential conflicts later on.