Is Del Taco obligated to refund any portion of the Promotional Fee for any reason?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
ranchise Fee is fully-earned and non-refundable in consideration of the administrative and other expenses incurred by Del Taco in granting this franchise and for Del Taco's lost or deferred opportunity to offer the rights to this franchise to others.
- 3.2 Promotional Fee. Franchisee shall pay Del Taco a fee of $10,000 (the "Promotional Fee") upon execution of this Agreement. The Promotional Fee shall be drawn upon by Franchisee through reimbursements submitted to Del Taco in the manner that Del Taco designates or through direct payments by Del Taco to vendors in order to promote the Restaurant within a year of the Restaurant's opening. Franchisee shall not contract for nor make any expenditures related to the promotion of the Restaurant unless Franchisee has submitted a request and received the written approval of Del Taco. Franchisee shall submit invoices for promotional expenditures to Del Taco for direct payment to the vendor or for reimbursement. Del Taco shall not pay or reimburse food or paper costs. Del Taco shall not have any obligation to refund
Source: Item 22 — CONTRACTS (FDD pages 58–59)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, Del Taco is not obligated to refund any portion of the Promotional Fee for any reason. The franchisee is required to pay Del Taco a $10,000 Promotional Fee upon execution of the Franchise Agreement. This fee is intended to be used to promote the restaurant within a year of its opening, through reimbursements submitted by the franchisee or direct payments by Del Taco to vendors.
The franchisee must obtain written approval from Del Taco before contracting for or making any expenditures related to the promotion of the restaurant. Invoices for promotional expenditures must be submitted to Del Taco for direct payment to the vendor or for reimbursement, but Del Taco will not pay or reimburse food or paper costs.
If the franchisee fails to spend the entire Promotional Fee within 12 months after the restaurant's opening, the unused portion of the fee is forfeited. Del Taco will then apply the remaining balance toward its general advertising or marketing programs. This means that franchisees need to carefully plan and execute their promotional activities within the specified timeframe to fully utilize the Promotional Fee, as any unspent funds will not be returned and will instead benefit Del Taco's broader marketing efforts.