Does Del Taco offer financing arrangements through its affiliates?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
Del Taco shall not unreasonably withhold any consent required by Section 12.3.4 above; provided, that if Franchisee proposes to transfer its obligations hereunder or any interest in all or substantially all of the assets of the Restaurant, or if Franchisee or an owner proposes to transfer any direct or indirect interest in Franchisee, or if Franchisee or any owner proposes to undertake any transfer that is subject to Section 12.3, Del Taco shall have the right to require, among other things, any or all of the following as conditions of Del Taco's approval:
- 12.4.1 Franchisee shall comply with Del Taco's then-current transfer policies.
Franchisee and the proposed transferee shall provide Del Taco with all information and documents requested by Del Taco for its evaluation of the proposed transfer, transaction, and transferee, including the business and financial terms of the proposed transaction including the leases and/or any assignments, renewal or extension of the leases and any necessary landlord consents, financial and operational information regarding the proposed transferee, and evidence of any financing that may be required to complete the transaction and/or fund the transferee's operation after the transfer.
12.4.2 The transferor shall have executed a general release (which shall include a release from the transferor, Franchisee, Franchisee's owners, and guarantors), in a form satisfactory to Del Taco, of any and all claims against Del Taco and its affiliates, successors, and assigns, and their respective directors, officers, shareholders, partners, agents, representatives, servants, and employees in their corporate and individual capacities including claims arising under this Agreement, any other agreement between Del Taco and Franchisee or their affiliates, and federal, state, and local laws and rules.
12.4.3 The transferee of an owner shall be designated as an owner and each transferee who is designated as an owner shall enter into a written agreement, in a form satisfactory to Del Taco, agreeing to be bound as an owner under the terms of this Agreement as long as such person or entity owns any interest in Franchisee; and, if Franchisee's obligations were guaranteed by the transferor, the owner shall guarantee the performance of all such obligations in writing in a form satisfactory to Del Taco.
Source: Item 10 — FINANCING (FDD page 31)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, it is not clear whether Del Taco offers financing arrangements through its affiliates. While the document discusses financial matters related to franchisees, it does not explicitly state that Del Taco or its affiliates provide direct financing to franchisees.
Item 22 of the FDD discusses the transfer of interests and conditions for approval, noting that Del Taco may request evidence of financing required to complete a transaction. This suggests that franchisees may need to seek financing from external sources. Additionally, the document mentions that franchisees may propose offerings of stock or partnership interests, which would require Del Taco's review, and that Del Taco is not participating in the underwriting of these securities.
To gain clarity on whether Del Taco or its affiliates offer financing, a prospective franchisee should directly ask the franchisor about available financing options, terms, and eligibility requirements. This information is crucial for making an informed decision about investing in a Del Taco franchise.