How does the number of units to be developed affect the Development Fee for a Del Taco Development Agreement?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
re 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
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 directly related to the number of restaurants a developer commits to opening. The initial restaurant slated for development carries a fee of $35,000, while each subsequent restaurant in the development agreement incurs a fee of $10,000. This fee structure incentivizes developers to commit to multiple locations, as the initial fee is significantly higher than the fee for additional units.
This fee is fully non-refundable and is payable upon the execution of the Development Agreement. Del Taco earns the Development Fee upon execution of the agreement. However, Del Taco provides a credit towards the initial franchise fee upon the execution of each Franchise Agreement. The credit is $35,000 for the first restaurant and $10,000 for each subsequent restaurant, effectively applying the development fees towards the franchise fees as the restaurants are developed.
For a prospective Del Taco developer, understanding this fee structure is crucial for financial planning. A developer committing to a larger number of restaurants will face a higher initial Development Fee but will also receive corresponding credits towards the franchise fees for each location as they are developed. This system encourages multi-unit development while ensuring Del Taco is compensated for granting exclusive development rights within a specific area.