Can Del Taco operate co-branded restaurants within a Del Taco franchisee's specified area?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
Though we have no current plans to do so, we and our affiliates (including those identified in Item 1) may operate or franchise co-branded or multi-branded Restaurants within your specified area that use our trade name, trademarks, and service marks together with the trade name, trademarks and service marks of one or more related or unrelated companies. We do not anticipate conflicts with, or between, Del Taco franchisees and Jack in the Box franchisees, or between Del Taco franchisees and the operators of co-branded or multi-branded restaurants, regarding territory, customers, or franchisor support because we only grant Del Taco franchises and the restaurant concepts offer different food products and dining experiences. If a conflict does arise, we will analyze the conflict and take actions (if any) that we deem appropriate, which may include participating in nonbinding mediation.
Source: Item 12 — TERRITORY (FDD pages 38–40)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, Del Taco and its affiliates retain the right to operate or franchise co-branded or multi-branded restaurants within a franchisee's specified area. These restaurants would use Del Taco's trade name, trademarks, and service marks in conjunction with those of related or unrelated companies. While Del Taco states they have no current plans to do so, this right is reserved. This applies to both franchisees with a Protected Area under a Franchise Agreement and those with a Development Area under a Development Agreement.
This clause means that even if a franchisee has a protected territory or development area, Del Taco could still introduce co-branded or multi-branded concepts within that area. This could potentially increase competition for the franchisee. Del Taco indicates that they do not anticipate conflicts arising from this due to the different food products and dining experiences offered by Del Taco versus other concepts. However, if a conflict does arise, Del Taco states they will analyze the situation and take actions they deem appropriate, potentially including nonbinding mediation.
Prospective franchisees should be aware that while they may have certain territorial protections, these are not absolute. Del Taco retains significant rights to operate or franchise other concepts, including co-branded ones, within the same area. This is a fairly common practice in franchising, as franchisors often seek to maximize brand presence and explore different market segments. Franchisees should carefully consider this potential for internal competition when evaluating the Del Taco franchise opportunity.