What specific requirements must a Del Taco franchisee follow when constructing, furnishing, and opening the restaurant?

aco's prior written approval.

• 4.10 Delegation of Duties. Franchisee acknowledges and agrees that any designee, employee, or agent of Del Taco may perform any duty or obligation imposed on or available to Del Taco by the Agreement, as Del Taco may direct.

5. Obligations of Franchisee; Operational Standards.

• 5.1 System Standards and Development of Restaurant. Franchisee understands and acknowledges that every detail of the Restaurant is important to Franchisee, Del Taco, and other franchisees in order to develop and maintain high operating standards, to increase the demand for the products sold by all franchisees, and to protect Del Taco's reputation and goodwill. Franchisee shall construct, furnish, and open the Restaurant according to the requirements contained herein. Franchisee shall open the Restaurant at the later of (a) one hundred eighty (180) days from the Effective Date, or (b) if upon execution of this Agreement, a location for the Restaurant has not been obtained by Franchisee and approved by Del Taco, one hundred eighty (180) days from the later of (i) Del Taco's approval of the location for the Restaurant pursuant to the Site Selection Addendum, or (ii) Franchisee's access to the leased premises as permitted by the lessor under the lease.
• 5.2 Pre-Opening Obligations. Before commencing any construction of the Restaurant, Franchisee, at its expense, shall comply, to Del Taco's satisfaction, with all of the following requirements:
• 5.2.1 Franchisee shall employ a qualified, licensed architect or engineer who is acceptable to Del Taco to prepare, for Del Taco's approval, preliminary plans and specifications for site improvement and construction of the Restaurant based upon the site construction package furnished by Del Taco or its designee pursuant to Section 4.1, and as may otherwise be authorized by Del Taco due to the particularities of the site of the proposed location. Del Taco's approval shall be limited to conformance with Del Taco's standard image specifications and layout and shall not relate to Franchisee's obligations with respect to any federal, state and local laws, codes and regulations including the applicable provisions of the ADA regarding the construction, design and operation of the Restaurant, which subjects shall be Franchisee's sole responsibility. If Del Taco or its affiliates provide site development services to Franchisee, Franchisee will be required to pay Del Taco a site development fee of up to fifty thousand dollars ($50,000) for work Del Taco or its affiliates complete toward developing the site, in addition to Del Taco or its affiliates' out-of-pocket and internal overhead costs. This amount is not refundable and must be paid before the site development services are performed.

• 5.2.2 Franchisee shall comply, at Franchisee's expense, with all federal, state and local laws, codes and regulations, including the applicable provisions of the ADA regarding the construction, design and operation of the Restaurant.
• 5.2.3 Franchisee shall be responsible for obtaining all zoning classifications and clearances which may be required by state or local laws, ordinances, or regulations or which may be necessary or advisable owing to any restrictive covenants relating to Franchisee's location. After having obtained such approvals and clearances, Franchisee shall submit to Del Taco, for Del Taco's approval, final plans for construction based upon the preliminary plans and specifications. Del Taco's review and approval of plans shall be limited to review of such plans to assess compliance with Del Taco's design standards for Restaurants. Once approved by Del Taco, such final plans shall not thereafter be changed or modified without the prior written permission of Del Taco. Any such change made without Del Taco's prior written permission shall constitute a material default under this Agreement and Del Taco may withhold its authorization to open the Restaurant for business until the unauthorized change is rectified (or reversed) to Del Taco's reasonable satisfaction.
• 5.2.4 Franchisee shall obtain all permits and certifications required for the lawful construction and operation of the Restaurant and shall certify in writing to Del Taco that all such permits and certifications have been obtained. Franchisee shall provide copies of all such permits and certificates to Del Taco within ten (10) days of Del Taco's request for same.
• 5.2.5 Franchisee shall employ a qualified licensed general contractor who is acceptable to Del Taco to construct the Restaurant and to complete all improvements. Franchisee shall obtain and maintain in force during the entire period of construction the insurance required under Section 11 below; and Franchisee shall deliver to Del Taco such proof of such insurance as Del Taco shall require.
• 5.2.6 Prior to signing a lease, Franchisee shall submit to Del Taco a final draft of the lease for the Restaurant premises. The lease must contain the provisions contained in Exhibit G (Addendum to Lease) hereof. Within fifteen (15) days following Franchisee's execution of the lease for the Restaurant premises, Franchisee shall provide to Del Taco copies of (i) the fully-executed lease for the premises and the executed Addendum to Lease and (ii) the landlord's and property management company's notice address and contact information. Further, no later than ten (10) days following Franchisee's opening of the Restaurant for business, Franchisee shall provide Del Taco with a copy of the commencement date letter from the landlord, or similar documentary evidence which indicates the commencement date under the lease and the expiration date of the lease.
  • 5.3 Restaurant Opening. In connection with the opening of the Restaurant:
• 5.3.1 Franchisee shall not open the Restaurant for business without first complying with all of Del Taco's pre-opening requirements and obligations contained in this Agreement and the Manuals.
• 5.3.2 Franchisee shall draw upon the Promotional Fee as described in Section 3.2 to conduct such grand opening and promotional activities as Del Taco may require.
• 5.3.3 Franchisee shall not open the Restaurant until Del Taco has determined that all construction has been substantially completed, and that such construction conforms to Del Taco's standards including materials, quality of work, signage, decor, paint, and equipment.
• 5.3.4 Franchisee shall not open the Restaurant until the Operating Principal, the Restaurant Manager and the Shift Managers have successfully completed all training required by Del Taco,

and Franchisee has hired and trained to Del Taco's standards a sufficient number of employees to service the anticipated level of the Restaurant's customers.

• 5.3.5 Franchisee shall not open the Restaurant until all amounts due to Del Taco under this Agreement or any other related agreements have been paid.
• 5.3.6 As and when required by Del Taco, Franchisee shall provide to Del Taco a summary of the expenditures incurred by Franchisee, on the format required by Del Taco, in connection with the acquisition, development and opening of the Restaurant and in connection with any remodeling or renovation of the Restaurant.
• 5.4 Training. Franchisee acknowledges that its owners and managers must be knowledgeable regarding the operation of Del Taco Restaurants, including the preparation and delivery of Menu Items and the provision of customer service in accordance with the brand standards established by Del Taco, which may be modified by Del Taco from time to time. Franchisee acknowledges that successful completion of Del Taco's training programs by Franchisee's owners and managers is critical to properly own, operate and manage the Restaurant. Franchisee acknowledges that applicable laws and regulations require that at least one person on the staff at a food service business must satisfactorily complete state and/or local mandated food handling training, and be certified as having successfully completed the training. Franchisee and at least one of its employees that attend Del Taco's management training program must also successfully complete a state and/or local mandated food handling program before commencing training with Del Taco, and Franchisee and each trainee must provide a certificate of successful completion of such program prior to commencing training. Also, Franchisee's employees must be covered by Franchisee's workers' compensation insurance policy prior to commencing training with Del Taco, and Franchisee must provide evidence of such coverage if requested by Del Taco. With regard to training, at least seven individuals must attend and successfully complete Del Taco's training programs: the Franchisee's Operating Principal, one (1) full-time Restaurant Manager, and at least five (5) Shift Managers (collectively, the "Franchisee's Principal Trainees").
• 5.4.1 Initial Training. Prior to the opening of the Restaurant, the Franchisee's Principal Trainees, and such other employees of Franchisee who Del Taco shall have the right to approve, shall attend and successfully complete, to Del Taco's satisfaction, the initial training program offered by Del Taco. All aspects of the Franchised Business shall be conducted under the management and supervision of the Operating Principal. In addition, the daily operations of the Restaurant shall be supervised under the active full-time management of the Operating Principal or Restaurant Manager who has successfully completed (to Del Taco's satisfaction) Del Taco's initial training program.
• 5.4.2 Operating Principal and Restaurant Manager. If the Operating Principal or the Restaurant Manager cease active management of or employment at the Restaurant, Franchisee shall enroll a qualified replacement (who shall be reasonably acceptable to Del Taco) in Del Taco's initial training program not more than thirty (30) days after the cessation of the former person's full-time employment and/or management responsibilities. The replacement shall attend and successfully complete the basic management training program, to Del Taco's reasonable satisfaction, as soon as it is practical to do so. Franchisee shall pay Del Taco's then-current training fees and per diem expenses.
• 5.4.3 Refresher Training / Annual Conventions. If Franchisee is in default of this Agreement, the Franchisee's Principal Trainees may also be required to attend such refresher courses, seminars, and other training programs as Del Taco may reasonably specify from time to time, including up to twenty (20) days of refresher programs each year during the term of the Agreement. In addition, such of the Franchisee's Principal Trainees as Del Taco may require, may be required to attend Del Taco's annual convention for up to three (3) days per year.

• 5.4.4 Pre-Opening Crew Training. If the Restaurant is one of the first two Del Taco restaurants that Franchisee or Franchisee's affiliate opens, after Franchisee or Franchisee's affiliate has hired the crew, Del Taco may provide Franchisee with such assistance as Del Taco deems advisable in training the crew in opening the Restaurant. Such assistance will be for a duration of two weeks before the opening of Franchisee's or Franchisee's affiliate's first and second Del Taco restaurant. Franchisee shall be responsible for the crew training.
• 5.4.5 Continuing Management and Crew Training. After the Restaurant has opened, Del Taco may, at its option, assist Franchisee in the training of management and crew to promote the proper use of the System. Franchisee at all times shall maintain at least one certified Restaurant Manager in the Restaurant and shall have a combination of nine additional Shift Managers trained and certified by Del Taco for the Restaurant. Franchisee shall have sole authority and discretion regarding all employment matters, including hiring, firing, discipline, compensation, benefits, and scheduling. Franchisee is solely responsible for ensuring its managers and employees are adequately trained and supervised. Del Taco may make training available to all future management employees of Franchisee. Every future manager must complete, to Del Taco's satisfaction, the pre-opening management training described in Section 5.4 above, and receive certification by Del Taco. If a Restaurant Manager's position becomes vacant, Franchisee shall fill the vacancy within 60 days with a fully-trained and certified Restaurant Manager.
• 5.4.6 Training costs. The cost of all initial training instruction and required materials shall be borne by Del Taco. All other expenses incurred in connection with training and, if required, attendance at Del Taco's annual convention, including the costs of transportation, lodging, meals, wages, workers' compensation insurance and trainees' meals during training sessions, for Franchisee, its investors, and all of its employees, shall be borne by Franchisee.
• 5.4.7 Additional Training. If Franchisee requests that Del Taco provide on-site training in addition to that described in this Section 5.4, and Del Taco is able to do so, then Franchisee agrees that it shall pay Del Taco's then-current per diem charges and out-of-pocket expenses, which shall be as set forth in the Manual or otherwise in writing.
• 5.5 Restaurant Premises. Franchisee shall use the Restaurant premises solely for the operation of the Restaurant; shall keep the Restaurant open and in normal operation for such hours and days as Del Taco may from time to time specify in the Manuals or as Del Taco may otherwise approve in writing; and shall refrain from using or permitting the use of the Restaurant premises for any other purpose or activity at any time. As used in this Section 5.5, the term "premises" shall include the grounds surrounding the Restaurant. Franchisee shall comply with all terms and conditions of the lease for the Restaurant, and shall provide Del Taco with copies of all notices of default or breach of the lease, notices regarding the renewal or extension of the lease, and all other notices or correspondence related to Franchisee compliance with lease and Franchisee's right to remain in possession of the premises.
• 5.6 Personnel. Franchisee agrees to maintain a competent, conscientious, trained staff in numbers sufficient to promptly service customers, including at least one (1) Shift Manager on duty at all times and to take such steps as are necessary to ensure that its employees preserve good customer relations and comply with such dress code as Del Taco may prescribe. Franchisee shall comply with all applicable employment and wage and hour laws and regulations. Franchisee is solely responsible for all employment decisions and functions of the Restaurant including those related to hiring, firing, training, compliance with wage and hour requirements, personnel policies, scheduling, benefits, recordkeeping, supervision, and discipline of employees, regardless of whether Franchisee receives advice from Del Taco on these subjects. Franchisee acknowledges and agrees that all personnel decisions, including hiring, firing, disciplining, compensation, benefits, and scheduling, shall be made by Franchisee, without any influence or advice from Del Taco, and such decisions and actions shall not be, nor be deemed to be, a decision or action of Del

Taco. Further, it is the intention of the parties to this Agreement that Del Taco shall not be deemed an employer or joint employer with Franchisee or Franchisee's employees for any reason. If Del Taco incurs any cost, loss, or damage as a result of any actions or omissions of Franchisee or Franchisee's employees, including any that relate to any party making a finding of any joint employer status, Franchisee will fully indemnify Del Taco for such loss.

• 5.7 Health Standards. Franchisee shall meet and maintain the highest health standards and ratings applicable to the operation of the Restaurant. Franchisee shall furnish to Del Taco, within five (5) days after receipt thereof, a copy of all inspection reports, warnings, citations, certificates, and/or ratings resulting from inspections conducted by any federal, state or municipal agency with jurisdiction over the Restaurant. Without limiting the foregoing, Franchisee and all required personnel shall obtain and maintain all necessary and required licenses and certificates for food service and food handling as may be required by applicable local rules and regulations and/or the Manual, at Franchisee's sole expense.
• 5.8 Restaurant Maintenance.

Source: Item 22 — CONTRACTS (FDD pages 58–59)