What is the required action for a Del Taco franchisee if the restaurant premises are damaged?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
- 13.2.4 If Franchisee at any time without the written consent of Del Taco ceases to operate or otherwise abandons the Restaurant for three (3) consecutive business days, or loses the right to possession of the Restaurant, or otherwise forfeits the right to do or transact business in the jurisdiction where the Restaurant is located; provided, however, that if, through no fault of Franchisee, the premises are damaged or destroyed by an event such that repairs or reconstruction cannot be completed within ninety (90) days thereafter, then Franchisee shall have thirty (30) days after such event in which to apply for Del Taco's approval to relocate and/or reconstruct the Restaurant, which approval shall not be unreasonably withheld;
Source: Item 22 — CONTRACTS (FDD pages 58–59)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, if the restaurant premises are damaged or destroyed through no fault of the franchisee, making repairs or reconstruction impossible within 90 days, the franchisee has 30 days after the event to seek Del Taco's approval to relocate and/or reconstruct the restaurant. Del Taco's approval for relocation or reconstruction cannot be unreasonably withheld.
This clause protects the franchisee from immediate termination if unforeseen circumstances, such as natural disasters or accidental damage, render the restaurant inoperable. The franchisee is given a reasonable timeframe to propose a solution, either by rebuilding at the same location or finding a new site. Del Taco retains the right to approve the proposed solution, ensuring it aligns with the brand's standards and strategic interests, but they must act reasonably in their decision.
This provision is fairly standard in franchise agreements, as it balances the franchisor's need to maintain brand consistency and operational standards with the franchisee's investment and potential hardship caused by unexpected events. It is important for prospective franchisees to understand the conditions under which they can relocate or reconstruct their restaurant and the process for obtaining franchisor approval.