Under what circumstances does the Del Taco agreement terminate immediately?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
If Licensee exceeds the authorized scope of the License granted under this Agreement or violates any obligation under Articles 3 or 8 of this Agreement with respect to any License, Del Taco may, in its sole discretion, immediately terminate this Agreement or the License granted with respect to any or all of the Licensed Restaurants without prior notice. Del Taco may, in its sole discretion, immediately terminate this Agreement or the License granted with respect to any Licensed Restaurant(s): (i) without prior notice, if Licensee fails to pay the License Fee or Support Services Fee pertaining to that Licensed Restaurant within 30 days after it is due; (ii) without prior notice, if the franchise or license agreement for that Licensed Restaurant is terminated; (iii) without prior notice, if the franchise, franchise agreement or Licensed Restaurant is transferred; or (iv) if Licensee fails to cure any other breach of this Agreement within 15 days of written notice of the breach.
Discontinuation of Software and Documentation. Del Taco may discontinue publication or distribution of the Software and Documentation for any reason. If Del Taco discontinues publication or distribution of the Software and Documentation, this Agreement shall terminate immediately with respect to all Licenses. In that event, Del Taco will refund or credit a pro rata portion of any License Fees already paid by Licensee, as determined by Del Taco in its sole discretion.
Source: Item 23 — RECEIPTS (FDD pages 59–325)
What This Means (2025 FDD)
According to the 2025 Del Taco Franchise Disclosure Document, Del Taco has the right to terminate the agreement immediately under certain conditions. Specifically, if a Del Taco licensee exceeds the authorized scope of their license or violates obligations under Articles 3 or 8 of the agreement, Del Taco can terminate the agreement or the license for specific restaurants without prior notice.
Del Taco can also immediately terminate the agreement without prior notice if the licensee fails to pay the License Fee or Support Services Fee within 30 days of the due date, if the franchise or license agreement for a restaurant is terminated, or if the franchise agreement or licensed restaurant is transferred. Additionally, if Del Taco discontinues the publication or distribution of the Software and Documentation for any reason, the agreement terminates immediately for all licenses.
For prospective Del Taco franchisees, these terms highlight the importance of adhering to the scope of the license, maintaining timely payments, and understanding the conditions under which the agreement can be terminated without prior notice. The immediate termination clauses emphasize the need for franchisees to diligently manage their operations and finances to avoid potential breaches that could lead to the loss of their franchise.