What was the reported gain on the acquisition of franchise-operated Del Taco restaurants?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
o franchisees and/or sell and leaseback with a third party, and iii) closed restaurant properties which we are marketing for sale.
4. FRANCHISE ACQUISITIONS
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Franchise acquisitions — During the first quarter of 2024, the Company acquired 9 Del Taco franchise restaurants for $0.1 million as part of two separate transactions, and recognized related gains of $2.4 million. This amount is recorded in "Other operating expenses, net" in the accompanying condensed consolidated statements of earnings. The Company did not acquire any Jack in the Box or Del Taco franchise restaurants in the first quarter of 2025. For further information, see Note 8, Other Operating Expenses, Net, in the notes to the condensed consolidated financial statement.
The following table summarizes the number of restaurants acquired from franchisees and the gains recognized for the sixteen weeks ended January 21, 2024 (dollars in thousands):
| Restaurants acquired from Del Taco franchisees | 9 |
|---|---|
| Purchase price (1) | $ (86) |
| Closing and acquisition costs | (43) |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 58)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, in 2024, the company acquired 9 franchise-operated restaurants and recognized a gain of $2.4 million. This gain is recorded under "Other operating expenses, net" in the condensed consolidated statements of earnings.
Additionally, the FDD provides a table summarizing the acquisition, which states the gain on the acquisition of franchise-operated restaurants was $2,357,000. The purchase price for the 9 restaurants was ($86,000), with closing and acquisition costs of ($43,000). The acquired property and equipment were valued at $3,612,000, intangible assets at $167,000, and operating lease right-of-use assets at $3,211,000. Operating lease liabilities were listed at ($4,505,000).
These figures reflect the financial impact of Del Taco's strategy of acquiring existing franchise locations. For a potential franchisee, this indicates that Del Taco is actively involved in managing and reshaping its franchise network, which could present both opportunities and potential changes in the competitive landscape. Understanding the reasons behind these acquisitions and their financial outcomes could be valuable for anyone considering investing in a Del Taco franchise.