Under what circumstances is a personal guarantee not required for a Del Taco franchisee?

Based on the 2025 Del Taco Franchise Disclosure Document, the circumstances under which a personal guarantee is not required relate to the transfer of ownership. Specifically, when a franchisee proposes to transfer their obligations or any interest in the restaurant's assets, Del Taco has the right to require certain conditions for approval. One of these conditions involves the transferee of an owner entering into a written agreement to be bound by the terms of the Franchise Agreement. However, the personal guarantee aspect is conditional.

The FDD states that "if Franchisee's obligations were guaranteed by the transferor, the owner shall guarantee the performance of all such obligations in writing in a form satisfactory to Del Taco." This implies that if the original franchisee (transferor) had provided a personal guarantee, then the new owner (transferee) might also be required to provide a personal guarantee. Conversely, if the original franchisee was not required to provide a personal guarantee, it is less likely that the new owner would be required to do so.

Therefore, a personal guarantee is not explicitly waived in all transfer scenarios. The requirement for a personal guarantee from the new owner depends on whether the original franchisee had provided one. A prospective franchisee should clarify with Del Taco the specific conditions under which a personal guarantee can be avoided during a transfer, as this is contingent on the initial agreement and the financial standing of the transferee.