Does Del Taco require franchisees to participate personally in the direct operation of the franchise?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 15: OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS]
We require you to participate personally in the direct operation of the franchise. If you operate as a legal entity, someone affiliated with your organization and approved by us must participate personally in the operations. Your designated Operating Principal and you must attend and satisfactorily complete the initial training program conducted by us as described in Item 11. To ensure a consistent brand experience, we require that the person responsible for the direct operation of the franchise have at least two years of experience (for a single unit franchisee) as a manager of a quick service Restaurant or at least five years of experience (for a multi-unit franchisee) as a manager of a quick service Restaurant, and an equity interest of at least 10% in the business.
You will control and be solely responsible for the day-to-day operation of the Restaurant and the terms and conditions and employment of your personnel, including the soliciting, hiring, firing, disciplining, paying, scheduling, and managing of your employees.
We may require that you and each person who is actively involved in the operation of the franchise, including the manager, execute an agreement in the form provided by us, under which each of you agree not to divulge any of our trade secrets or confidential or proprietary information, including the contents of any of our manuals, or to participate in or have any interest in any competitive business.
If you operate as a legal entity, we will require all of your owners to execute the personal guaranty of your obligations attached to the Franchise Agreement and Development Agreement.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD page 42)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, franchisees are required to participate personally in the direct operation of the franchise. If the franchisee is a legal entity, someone affiliated with the organization and approved by Del Taco must participate personally in the operations. This individual is referred to as the Operating Principal.
The Operating Principal, along with the franchisee, must attend and satisfactorily complete the initial training program conducted by Del Taco. To ensure a consistent brand experience, the person responsible for the direct operation of the franchise must have at least two years of experience as a manager of a quick service restaurant if they are a single-unit franchisee, or at least five years of experience if they are a multi-unit franchisee. Additionally, the Operating Principal must have an equity interest of at least 10% in the business.
The franchisee is responsible for the day-to-day operation of the restaurant, including managing personnel. Del Taco may also require the franchisee and anyone actively involved in the operation, including the manager, to sign an agreement to protect Del Taco's trade secrets and confidential information. If the franchisee operates as a legal entity, all owners may be required to execute a personal guaranty of the franchisee's obligations.