What rights does the Development Agreement NOT grant to the Del Taco Developer?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
nts identified on Exhibit B. The Developer shall have limited exclusive rights to develop Restaurants—that is, Del Taco will not establish, or grant franchises for others to establish, Del Taco Restaurants—in the Development Area for the term of this Agreement. The Developer shall submit Site Approval Packages and shall develop and open the total number of Restaurants set forth on and in accordance with the Development Schedule. This Agreement is not a franchise agreement and does not grant the Developer any right to use the Del Taco System or any part of the Del Taco System. The Developer shall have no right under this Agreement to license others to use the Del Taco System or any part of this Del Taco System.
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- Term. This Agreement and all Development Rights shall expire immediately upon the required opening date for the last Restaurant set forth on the Development Schedule or the actual opening date for the last Restaurant, whichever first occurs, unless sooner terminated in accordance with the terms and conditions of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 59–325)
What This Means (2025 FDD)
According to the 2025 Del Taco Franchise Disclosure Document, the Development Agreement grants limited exclusive development rights for restaurants in a specific area, but it does not grant the developer the right to use the Del Taco System or any part of it. The developer also cannot license others to use the Del Taco System. The agreement solely allows the developer to select sites for restaurants and submit them to Del Taco for approval.
Specifically, the Development Agreement does not grant a license to use the Del Taco System or to open or operate any restaurants within the development area. To gain these rights, the developer must execute a Franchise Agreement and pay the franchise fee. Furthermore, the development rights are considered personal services and cannot be sold, assigned, transferred, or encumbered. The developer is also prohibited from using the Del Taco name or related names in their business name and must clearly indicate independent ownership.
Del Taco retains the right to construct and operate other Del Taco restaurants and to use the Del Taco System outside the Development Area, as well as to license others to do the same. Del Taco also retains the right to develop, use, and franchise trade names, trademarks, service marks, and copyrights associated with the Del Taco System for other franchise systems outside the Development Area. Del Taco can also develop and franchise Del Taco restaurants at Alternative Points of Distribution, such as airports, college campuses, and malls, even within the Development Area, although they must first offer the opportunity to the developer if the developer can meet the same terms and conditions.