Under what agreement is the Development Fee paid to Del Taco?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
ssion of Site Approval Packages and the development of Restaurants as set forth on Exhibit B to this Agreement.
- (g) "Restaurant" or "Restaurants" shall mean one or more Del Taco restaurants.
- (h) "Site Approval Package" shall mean the information and forms required by Section 7 of this Agreement.
- (i) "Alternative Point(s) of Distribution" shall mean those locations as further defined in Section 13(c) of this Agreement.
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- Grant of Development Rights. Del Taco hereby grants to the Developer, subject to the terms and conditions of this Agreement and as long as the Developer complies with this Agreement and all other agreements with Del Taco, limited exclusive Development Rights for Restaurants 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 Del Taco's 2025 Franchise Disclosure Document, the Development Fee is paid under the Development Agreement. Specifically, in consideration of the development rights granted in the Development Agreement, the developer must pay Del Taco a non-refundable fee of $35,000 for the first restaurant scheduled to open and $10,000 for each additional restaurant. This fee is payable upon the execution and delivery of the Development Agreement by the developer. Del Taco earns the Development Fee upon the execution of the agreement and has no obligation to refund any portion of it.
This agreement grants the developer limited exclusive rights to develop Del Taco restaurants within a defined Development Area, meaning Del Taco will not establish or franchise others to establish restaurants in that area during the term of the agreement, provided the developer complies with the agreement and all other agreements with Del Taco. The developer is required to submit site approval packages and adhere to the Development Schedule for opening restaurants.
It is important to note that the Development Agreement itself is not a franchise agreement and does not grant the developer the right to use the Del Taco System. The developer also cannot license others to use the Del Taco System under this agreement. The Development Agreement and rights expire upon the opening date of the last restaurant on the Development Schedule or the required opening date, whichever comes first, unless terminated earlier according to the agreement's terms.