Under what circumstances can a Del Taco area developer terminate the Development Agreement?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in the Agreement | Summary |
|---|---|---|
| n. Our right of first refusal to | Not applicable | Not applicable. |
| acquire your business | ||
| o. Our option to purchase your | Not applicable | Not applicable |
| business | ||
| p. Your death or disability | Not applicable | Not applicable |
| q. Non-competition covenants during the term of the franchise | 17(e) | You cannot have any interest in a competitive business within the protected area of any Restaurant operated under a franchise agreement executed pursuant to the Development Agreement or any other existing Del Taco restaurant. (subject to state law) |
| r. Non-competition covenants after the franchise terminates or expires | 17(e) | You cannot have any interest in a competitive business for two years after expiration or termination, within the protected area of any Restaurant operated under a franchise agreement executed pursuant to the Development Agreement or any other existing Del Taco restaurant. (subject to state law) |
| s. Modification of the | 23 | All changes require mutual agreement in writing. |
| agreement | ||
| t. Integration/ merger clause | 23 | Only the written terms of agreement and the exhibits bind the parties. Notwithstanding the foregoing, nothing in this or any related agreement is intended to disclaim the express representations made in the Franchise Disclosure Document, its exhibits and amendments. Any representations or promises outside of the Franchise Disclosure Document and other agreements may not be enforceable. (Subject to state law) |
| u. Dispute resolution by arbitration or mediation | 18 | The parties must arbitrate any controversy or claim, except that either party may file for preliminary injunctive relief, a restraining order, or order of specific performance, including, without limitation, injunctive relief pertaining to the use of the Del Taco System and Marks. |
| v. Choice of forum | 18 and 20 | All litigation and arbitration must take place in Orange County, California, subject to applicable state law. See Exhibit F. |
| w. Choice of law | 20 | California law applies, subject to applicable state law. See Exhibit F. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 42–46)
What This Means (2025 FDD)
Based on the 2025 Del Taco Franchise Disclosure Document, Item 17 provides a table summarizing various provisions related to termination, transfer, and dispute resolution, but it does not explicitly detail the circumstances under which a Del Taco area developer can terminate the Development Agreement. The table includes provisions such as Del Taco's right of first refusal to acquire the business, options to purchase the business, and conditions related to death or disability, but these relate to Del Taco's rights, not the developer's.
While the table outlines aspects like non-competition covenants during and after the franchise term, modification of the agreement, integration/merger clauses, dispute resolution, choice of forum, and choice of law, it does not specify the conditions that would allow the area developer to terminate the agreement. These provisions primarily concern the operational and legal aspects of the franchise relationship rather than the specific conditions under which the developer can end the agreement.
Therefore, a prospective Del Taco area developer should carefully review the Development Agreement itself and seek clarification from Del Taco regarding the specific conditions under which they, as the developer, would be entitled to terminate the agreement. This would include understanding any performance-based criteria, breach of contract scenarios, or other circumstances that could lead to termination by the developer.