What were the proceeds from the sale of company-operated Del Taco restaurants in 2022?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
NGS AND FRANCHISE ACQUISITIONS
Refranchisings — The following table summarizes the number of restaurants sold to franchisees and gains recognized in each fiscal year (dollars in thousands):
| 202 | 4 | 2023 | 2022 | |
|---|---|---|---|---|
| Restaurants sold to Jack in the Box franchisees | _ | 5 | 15 | |
| Restaurants sold to Del Taco franchisees | 47 | 111 | ||
| Proceeds from the sale of company-operated restaurants (1) | $ 19 | 9,400 | $ 85,221 | $ 6,391 |
| Broker commissions | _ | (1,614) | _ | |
| Net assets sold (primarily property and equipment) | (: | 5,310) | (17,101) | (1,565) |
| Goodwill related to the sale of company-operated restaurants | (6 | 5,835) | (35,544) | (948) |
| Franchise fees | ( | 1,266) | (3,086) | |
| Sublease liabilities, net |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 58)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, the proceeds from the sale of company-operated restaurants in 2022 totaled $6,391,000. This figure represents the gross revenue Del Taco received from selling company-owned locations to franchisees or other entities. It's important to note that this is the 'top line' number before any deductions for expenses related to the sale.
Several factors can influence the proceeds from restaurant sales. These include the number of restaurants sold, their locations, and the specific terms of the sale agreements. For instance, the FDD notes that in 2022, 15 Del Taco restaurants were sold to Jack in the Box franchisees. The proceeds can also be affected by whether the sales involve existing franchisees expanding their operations or new franchisees entering the system.
It is important to consider that the gains on the sale of company-operated restaurants for 2022 were $3,878,000. The proceeds from the sale of company-operated restaurants do not represent the net financial benefit to Del Taco, as there are related expenses such as broker commissions, the value of net assets sold, goodwill, franchise fees, sublease liabilities, lease terminations, and other costs. These expenses are deducted from the proceeds to arrive at the actual gain on the sales. Therefore, while the proceeds indicate the scale of refranchising activity, the gains provide a clearer picture of the profitability of these transactions for Del Taco.