What are the notice periods required for termination for convenience by Del Taco and the franchisee, respectively?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
c) Termination for Convenience. The Company may terminate this Contract by giving sixty (60) days' written notice to Franchisee. Franchisee may terminate the Contract by giving one hundred fifty (150) days' written notice to C. In the event the Company issues a sixty (60) day written notice of termination and prior to the expiration of the 60th day the Company becomes aware of facts indicating Franchisee breached these terms and conditions, the Company may accelerate the effective date of the termination and exercise its right to terminate this Contract immediately.
Source: Item 23 — RECEIPTS (FDD pages 59–325)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, the notice periods for termination for convenience differ between Del Taco and the franchisee. Del Taco can terminate the contract by providing the franchisee with sixty days' written notice. Conversely, if the franchisee wishes to terminate the contract, they must provide Del Taco with one hundred fifty days' written notice.
This difference in notice periods has practical implications for both parties. Del Taco has the flexibility to end the agreement relatively quickly, allowing them to respond to changing market conditions or strategic realignments. However, the franchisee needs to provide a significantly longer notice period, which could be challenging if they need to exit the agreement due to unforeseen circumstances.
The FDD also states that if Del Taco issues a sixty-day termination notice and subsequently discovers that the franchisee has breached the terms and conditions of the agreement, Del Taco can accelerate the termination date and terminate the contract immediately. This clause provides Del Taco with an additional layer of protection in cases of franchisee non-compliance.
Prospective franchisees should carefully consider these termination terms and conditions, as they could impact their ability to exit the franchise agreement if needed. It is advisable to seek legal counsel to fully understand the implications of these clauses before entering into a franchise agreement with Del Taco.