What obligations does a Del Taco franchisee have regarding location selection (Item 9) and what assistance does Del Taco provide (Item 11)?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
aco the right to make decisions, take actions and/or refrain from taking actions not inconsistent with Franchisee's rights and obligations hereunder.
[Signature Page Follows]
Executed as of the day and year first set forth above.
Del Taco LLC Jack Tang, Vice President, General Counsel Its:
Exhibit B
Site Selection Addendum
| Del Taco LLC ("Del Taco"), a California limited liability company, and the undersigned (the |
|---|
| "Franchisee") have this day of, 20 (the "Effective Date") entered into a Del Taco |
| Franchise Agreement ("Franchise Agreement") and desire to supplement its terms as set out below in this |
| Site Selection Addendum (this "Site Selection Addendum"). |
| 1. |
| Time to Locate Site: Within one hundred eighty days (180) days after the Effective Date |
| (the "Search Period"), Franchisee shall acquire or lease/sublease, at Franchisee's expense, commercial |
| real estate that is properly zoned for the use of the business to be conducted by Franchisee under the |
| Franchise Agreement (a "Restaurant") at a site consented to Del Taco as hereinafter provided. Such |
| location shall be within the following area: |
| (the "Site Selection Area"). The Site Selection Area is described solely for the |
| purpose of selecting a site for the Restaurant. |
| Del Taco shall not establish, nor franchise another to |
| establish, a Del Taco Restaurant operating under the System within the Site Selection Area until Del Taco |
| consents to a location for the Restaurant, or until the expiration of the Search Period, whichever event first |
| occurs. If a suitable site has not been identified and consented to by the end of the Search Period, Del Taco |
| may, at its option, extend the Search Period by up to sixty (60) days. Franchisee acknowledges and agrees |
| that Del Taco shall have no responsibility for, or liability to Franchisee for, any site review, analysis, |
| evaluation, or recommended undertaken by or on behalf of any real estate broker or advisor used or retained |
| by Franchisee. Failure by Franchisee to acquire or lease an approved site for the Franchised Business within |
| the Search Period shall constitute a default under Section 13 of the Franchise Agreement and under this |
| Addendum, and Del Taco may terminate the Franchise Agreement and this Addendum, pursuant to the |
| terms of Section 13 of the Franchise Agreement. |
- 2. Site Evaluation Services: Del Taco shall furnish to Franchisee suggested site selection criteria, which is currently reflected in advice based on site and demographic factors, and will include Del Taco's minimum standards for a location for the Restaurant. Del Taco will also provide such site selection counseling and assistance as Del Taco may deem advisable. Del Taco shall perform any on-site evaluation as Del Taco may deem advisable in response to Franchisee's requests for site approval; provided, however, that Del Taco shall not be required to provide on-site evaluation for any proposed site. If on-site evaluation is deemed necessary and appropriate by Del Taco (on its own initiative or at Franchisee's request) for any Restaurant to be established, Franchisee shall reimburse Del Taco for all reasonable expenses incurred by Del Taco in connection with such on-site evaluation, including, without limitation, the cost of travel, lodging and meals.
- 3. Additional Site Evaluation Services: Del Taco recommends, but does not require, that Franchisee engage the services of a third-party real estate or site evaluation professional or business, to assist with the analysis and evaluation of a particular site, and/or to utilize competitive sales data from a third-party. Franchisee acknowledges and agrees that any site evaluation model or service is only one tool or factor that may be used to evaluate a potential site, and it is not a predictor of future sales.
- 4. Site Selection Package Submission and Approval: Franchisee shall submit to Del Taco, in the form specified by Del Taco, such site approval forms and data that Del Taco may specify, which may include a copy of the site plan, financial information, and such other information or materials as Del Taco may reasonably require, together with an option contract, letter of intent or other evidence satisfactory to Del Taco which confirms Franchisee's favorable prospects for obtaining the site. Franchisee acknowledges that time is of the essence. Del Taco shall have thirty (30) days after receipt of a complete site selection
package and request for approval and such information and materials as Del Taco may request to approve or disapprove the proposed site in writing as the location for the Restaurant, in Del Taco's sole discretion. In the event Del Taco does not disapprove a proposed site by written notice to Franchisee within said thirty (30) days, such site shall be deemed approved by Del Taco.
- 5. Business Impact Analysis. As a condition of Del Taco's review of a proposed site, Del Taco may require Franchisee to pay for (or reimburse Del Taco for the costs of) a trade area survey analysis if the proposed site is within certain distance of any existing Restaurant as specified in Del Taco's thencurrent business impact policy. Depending on the results of any such trade area survey analysis, Del Taco may (a) reject a proposed site, or (b) as a condition for Del Taco's approval of the proposed site, (i) require Franchisee to make a business impact payment to any affected franchisee(s) in accordance with Del Taco's then-current business impact policy, or (ii) notwithstanding any prior agreement to the contrary, reduce or withhold any development incentives to offset projected impacts upon any existing company-owned Restaurants in accordance with the then-current business impact policy.
- 6. Lease Responsibilities: Within sixty (60) days after site approval by Del Taco, Franchisee shall execute a lease which shall be coterminous with the Franchise Agreement, or a binding agreement to purchase the site. Del Taco's approval of any lease is conditioned upon inclusion in the lease of the Addendum to Lease attached to the Franchise Agreement as Exhibit G. However, Del Taco shall not be responsible for review of the Lease for any terms other than those contained in the Addendum to Lease.
- **7.
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, franchisees bear significant responsibility for location selection, while Del Taco offers guidance and approval rights. Specifically, the franchisee must acquire or lease commercial real estate properly zoned for a Del Taco Restaurant within a designated "Site Selection Area" and within 180 days of the Effective Date of the agreement. This timeline is crucial, as failure to secure an approved site within this period can lead to termination of the Franchise Agreement. Del Taco may extend the search period by up to 60 days at its option. The franchisee is also responsible for employing a qualified architect or engineer to prepare plans based on Del Taco's standard construction package. These plans are subject to Del Taco's approval for conformance with their image specifications. The franchisee is solely responsible for complying with all applicable laws and regulations, including ADA requirements. Before construction, the franchisee must comply with all requirements to Del Taco's satisfaction. Franchisee shall submit to Del Taco site approval forms and data that Del Taco may specify, which may include a copy of the site plan, financial information, and such other information or materials as Del Taco may reasonably require, together with an option contract, letter of intent or other evidence satisfactory to Del Taco which confirms Franchisee's favorable prospects for obtaining the site. Del Taco shall have thirty (30) days after receipt of a complete site selection.
Del Taco provides suggested site selection criteria based on site and demographic factors, including minimum standards for a location. Del Taco will also provide such site selection counseling and assistance as Del Taco may deem advisable. However, Del Taco is not required to provide on-site evaluation for any proposed site, though they may do so at their discretion. If Del Taco performs an on-site evaluation, the franchisee must reimburse Del Taco for all reasonable expenses, including travel, lodging, and meals. Del Taco recommends, but does not require, that franchisees engage a third-party real estate professional for site evaluation. Del Taco retains the right to inspect the Restaurant prior to opening and the franchisee cannot open without Del Taco's written approval.
Del Taco also provides a standard construction package with plans and specifications, site criteria, and sample site plans. Franchisees must adapt these plans at their own expense. If Del Taco or its affiliates provide site development services, the franchisee will be required to pay a site development fee of up to $50,000, plus out-of-pocket and overhead costs, before the services are performed; this fee is non-refundable. Del Taco has the right to modify the architectural plans and specifications as it deems appropriate. Overall, while Del Taco offers assistance and guidance, the franchisee carries the primary responsibility for finding and developing a suitable location that meets Del Taco's standards and complies with all regulations.