During the term of the Del Taco franchise, can a franchisee use the Del Taco System in connection with another restaurant?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in the Agreement | Summary |
|---|---|---|
| q. Non-competition covenants during the term of the franchise | 10.5 | You cannot use the Del Taco System or any other names, marks, systems, logotypes, symbols or foodstuffs provided by us or an approved supplier in connection with another Restaurant; you cannot operate any “competitive business”, which means a Restaurant or food service business that offers one or more Mexican or similar style menu items, and is operated in a quick service, fast food, or fast casual format. (subject to state law) |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 42–46)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, a franchisee is restricted from using the Del Taco System in connection with another restaurant during the term of the franchise agreement. Specifically, franchisees cannot use the Del Taco System, or any names, marks, systems, logotypes, symbols, or foodstuffs provided by Del Taco or an approved supplier, for any other restaurant.
This restriction also extends to operating any "competitive business." A competitive business is defined as a restaurant or food service that offers one or more Mexican or similar style menu items and operates in a quick service, fast food, or fast casual format. This non-compete clause is subject to state law, meaning its enforceability can vary depending on the specific state regulations.
For a prospective Del Taco franchisee, this means a complete dedication to the Del Taco brand and system during the franchise term. Franchisees cannot simultaneously operate another restaurant, especially one that could be considered competitive, using Del Taco's resources or branding. This is a fairly standard restriction in franchising, designed to protect the brand's integrity and prevent direct competition from its own franchisees. Franchisees need to be aware of these limitations and ensure their business activities align with these restrictions to avoid potential breaches of the franchise agreement.