Is Del Taco required to approve any particular supplier for its franchisees?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
5.13.2 Nothing in the foregoing shall be construed to require Del Taco to approve any particular supplier, nor to require Del Taco to make available to prospective suppliers, standards and specifications for formulas, which Del Taco shall have the right to deem confidential.
5.13.3 Notwithstanding anything to the contrary contained in this Agreement, Franchisee acknowledges and agrees that, at Del Taco's sole option, Del Taco may establish one or more strategic alliances or preferred vendor programs with one or more nationally or regionally-known suppliers who are willing to supply all or some Restaurants with some or all of the products and/or services that Del Taco requires for use and/or sale in the development and/or operation of Restaurants.
In this event, Del Taco may limit the number of approved suppliers with whom Franchisee may deal, designate sources that Franchisee must use for some or all products and other products and services, and/or refuse any of Franchisee's requests if Del Taco believes that this action is in the best interests of the System or the franchised network of Restaurants.
Del Taco shall have unlimited discretion to approve or disapprove of the suppliers who may be permitted to sell products to Franchisee.
- 5.13.4 Franchisee acknowledges and agrees that Del Taco shall have the right to collect and retain all manufacturing allowances, marketing allowances, rebates, credits, monies, payments or benefits (collectively, "Allowances") offered by suppliers to Franchisee or to Del Taco or its affiliates based upon Franchisee's purchases of products and other goods and services.
These Allowances may be based on System-wide purchases of food, beverages, paper goods, merchandise and other items.
Franchisee assigns to Del Taco or its designee all of Franchisee's right, title and interest in and to any and all such Allowances and authorizes Del Taco or its designee to collect and retain any or all such Allowances without restriction (unless otherwise instructed by the supplier).
- 5.13.5 Franchisee shall comply with all terms, conditions, and obligations of all contracts and arrangements with suppliers, including contracts and arrangements negotiated by Del Taco or third parties as part of a network or multiple-franchise or multiple-restaurant supply and distribution arrangement, and Franchisee's contracts with and obligations to suppliers.
Franchisee shall promptly pay all suppliers in accordance with the agreed-upon terms.
In the event Franchisee fails to promptly pay one or more suppliers as required, Del Taco may, but is not required to, pay such supplier(s) on behalf of Franchisee, and Franchisee shall promptly reimburse Del Taco for such payment following notice from Del
Taco, or Del Taco may obtain payment through the EFT process described in Section 3.5 above and the Manuals.
5.13.6 Del Taco reserves the right to designate, specify and/or approve the manufacturer and/or supplier of all signs used or installed at the Restaurant (the "Sign Manufacturer").
5.14 Inspections.
Franchisee grants Del Taco and its agents the right to enter (physically or virtually) upon the Restaurant premises at any time for the purpose of conducting inspections, for among other purposes, preserving validity of the Proprietary Marks, and verifying Franchisee's compliance with this Agreement and the policies and procedures outlined in the Manuals.
Del Taco shall also have the right to take and maintain photographs and videos, in any medium, of the Restaurant and the operations at the Restaurant.
Franchisee shall cooperate with Del Taco's representatives in such inspections by rendering such assistance as they may reasonably request, including but not limited to providing access to Franchisee's employees and guests; and, upon notice from Del Taco or its agents and without limiting Del Taco's other rights under this Agreement, Franchisee shall take such steps as may be necessary to correct immediately any deficiencies detected during any such inspection.
Source: Item 22 — CONTRACTS (FDD pages 58–59)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, Del Taco is not required to approve any particular supplier. However, franchisees must purchase all products, ingredients, supplies, and materials from suppliers that Del Taco has approved in writing. Del Taco has the right to establish strategic alliances or preferred vendor programs with nationally or regionally known suppliers and may limit the number of approved suppliers with whom a franchisee may deal. Del Taco also has unlimited discretion to approve or disapprove suppliers.
Del Taco considers various factors when determining whether to approve a supplier. These factors include the supplier's ability to meet Del Taco's standards and specifications, adequate quality controls and capacity to supply the franchisee's needs promptly and reliably, the ability of the System to take advantage of marketplace efficiencies, and written approval by Del Taco before any purchases are made by the franchisee. Del Taco also reserves the right to reinspect the facilities and products of any approved supplier and to revoke its approval if the supplier fails to continue meeting Del Taco's criteria.
If a franchisee wishes to purchase from an unapproved supplier, they must submit a written request to Del Taco for approval. Del Taco can require its representatives to inspect the supplier's facilities and test samples, with the franchisee or supplier bearing the costs. Del Taco may also require the supplier to comply with other requirements, including paying inspection fees, administrative costs, or other payments to Del Taco for services rendered to the suppliers. Franchisees must also comply with all contracts and arrangements with suppliers, including those negotiated by Del Taco.