How is the term of the gift card agreement for each Del Taco Licensed Restaurant determined?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
The term of this Agreement with respect to each Licensed Restaurant shall begin on the Effective Date and shall expire upon the expiration date of the Franchise Agreement (i.e. (a) the expiration of the initial term of the Franchise Agreement, in the event Franchisee does not renew its right to operate the Licensed Restaurant pursuant to Section 2.2 of the Franchise Agreement, or (b) the expiration of such renewal term, in the event Franchisee renews its right to operate the Licensed Restaurant pursuant to Section 2.2 of the Franchise Agreement), unless terminated sooner pursuant to Article 10 of this Agreement, or pursuant to the terms of the Franchise Agreement.
Source: Item 23 — RECEIPTS (FDD pages 59–325)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, the gift card agreement's term for each licensed restaurant begins on the effective date and concludes when the Franchise Agreement expires. This expiration occurs either at the end of the initial term if the franchisee does not renew, or at the end of the renewal term if the franchisee chooses to renew their right to operate the Del Taco restaurant. The agreement can also be terminated earlier as per Article 10 of the gift card agreement or the terms outlined in the Franchise Agreement itself.
This means that a Del Taco franchisee's participation in the gift card program is directly tied to the length of their Franchise Agreement. If a franchisee decides not to renew their agreement, their participation in the gift card program ends when the initial term expires. Conversely, if they renew, their participation extends through the renewal term.
It is important for prospective Del Taco franchisees to understand that the gift card program is not optional. The agreement specifies that Del Taco requires franchisee participation in the gift card program for each designated franchised Del Taco Restaurant. This ensures consistency across all locations and allows for a unified brand experience for customers using gift cards.
Franchisees should carefully review both the Franchise Agreement and the Premium Gift Card Processing Agreement to fully understand their obligations and the conditions under which either agreement can be terminated. Understanding these terms is crucial for managing their business and financial planning.