When purchasing Del Taco assets, what two amounts constitute the Purchase Price?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
| (ii) | Buyer agrees and acknowledges that as a condition to Seller agreeing to sell the Locations to Buyer, at the Closing Buyer shall pay at least the sum of the Sales Taxes and any closing costs or prorations that are the responsibility of Buyer, from personal sources other than from any financing secured by the Assets, the Locations or any other Del Taco restaurant businesses operated by Buyer, and which shall be immediately available at the Closing. |
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| (iii) | In consideration of the purchase by Buyer of the Additional Assets and the Stand Bank for each of the Locations, within 3 days after receipt of a billing from Seller, for each of the Locations, Buyer shall pay to Seller the sum of: (a) an amount equal to Del Taco's current price to Franchisees who buy from Del Taco for food and packaging, and (b) an amount equal to the Stand Bank. |
Source: Item 23 — RECEIPTS (FDD pages 59–325)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, the purchase price for additional assets includes two components. First, the buyer must pay an amount equal to Del Taco's current price to franchisees for food and packaging when buying directly from Del Taco. Second, the buyer must pay an amount equal to the Stand Bank for each of the locations being purchased. These payments must be made within 3 days of receiving a billing statement from the seller.
This means that when a franchisee purchases existing Del Taco locations, the purchase price is not a single, fixed amount. Instead, it's composed of the cost of food and packaging inventory at Del Taco's standard rate, plus the value of the Stand Bank (presumably cash on hand) for each location. This ensures that the buyer is paying for the existing inventory and cash assets of the business.
Prospective franchisees should carefully consider the implications of this payment structure. They need to factor in the cost of food, packaging, and the Stand Bank when budgeting for the acquisition of existing Del Taco restaurants. It is also important to clarify with Del Taco what constitutes the 'current price' for food and packaging, and how the value of the Stand Bank is determined for each location to avoid any surprises during the purchase process.