Are there any exceptions to Del Taco's policy of not offering financing?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
parties' understanding and agreement that any transfer in Franchisee, Franchisee's obligations and/or rights hereunder, all or substantially all of the assets of the Restaurant, or any indirect or direct interest in Franchisee shall be subject to all of the terms of this Section 12.
12.12 Securities Offerings. All materials for an offering of stock or partnership interests in Franchisee or any of Franchisee's affiliates which are required by federal or state law shall be submitted to Del Taco for review as described below before such materials are filed with any government agency. Any materials to be used in any exempt offering shall be submitted to Del Taco for such review prior to their use. No offering by Franchisee or any of Franchisee's affiliates shall imply (by use of the Proprietary Marks or otherwise) that Del Taco is participating in an underwriting, issuance, or offering of the securities of Franchisee or Franchisee's affiliates; and Del Taco's review of any offering shall be limited solely to the relationship between Del Taco and Franchisee and any subsidiaries and affiliates, if applicable, and shall not constitute any opinion as to any legal requirement. Del Taco may, at its option, require the offering materials to contain a written statement prescribed by Del Taco concerning the limitations stated in the preceding sentence. Franchisee (and the offeror if not Franchisee), the owners, and all other participants in the offering must fully indemnify Del Taco, its subsidiaries, affiliates, successor, and assigns, and their respective directors, officers, shareholders, partners, agents, representatives, servants, and employees in connection with the offering and shall execute any and all documents required by Del Taco to endorse such indemnification. For each proposed offering, Franchisee shall pay Del Taco a non-refundable fee of Five Thousand Dollars ($5,000) or such greater amount as is necessary to reimburse Del Taco for its reasonable costs and expenses (including legal and accounting fees) for reviewing the proposed offering. Franchisee shall give Del Taco written notice at least thirty (30) days before the date that any offering or other transaction described in this Section 12 commences. An
Source: Item 10 — FINANCING (FDD page 31)
What This Means (2025 FDD)
Based on the 2025 Del Taco Franchise Disclosure Document, there is no mention of Del Taco offering financing to franchisees. However, if a franchisee seeks to offer securities in their Del Taco franchise, they must submit all offering materials to Del Taco for review before filing with any government agency. This review ensures that the offering materials do not imply Del Taco's participation in underwriting or issuing the franchisee's securities. Del Taco's review is limited to the relationship between Del Taco and the franchisee and does not constitute any legal opinion.
Del Taco may require the offering materials to include a statement clarifying these limitations. The franchisee, along with owners and participants in the offering, must indemnify Del Taco against any liabilities related to the offering. For each proposed offering, the franchisee must pay Del Taco a non-refundable fee of $5,000, or a greater amount if necessary to cover Del Taco's costs and expenses, including legal and accounting fees, for reviewing the offering.
The franchisee must provide Del Taco with written notice at least 30 days before commencing any offering. Del Taco's approval is required regarding the structure and voting control of the offeror and the franchisee after the financing is completed. While this doesn't constitute direct financing from Del Taco, it outlines the process and requirements if a franchisee seeks external funding through securities offerings, ensuring Del Taco's interests and brand are protected during such financial activities.