Under what circumstances can Del Taco require the transfer of a Del Taco franchise due to permanent disability?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
- 12.8 Transfer Upon Permanent Disability.
Upon Franchisee's permanent disability or the permanent disability of any owner with a controlling interest in Franchisee, Del Taco may require Franchisee's or the owner's interest to be transferred to a third party approved by Del Taco within six (6) months after notice to Franchisee. "Permanent Disability" shall mean any physical, emotional, or mental injury, illness, or incapacity that would prevent a person from performing the obligations set forth in this Agreement for at least six (6) consecutive months and from which condition recovery within six (6) consecutive months from the date of determination of disability is unlikely.
If Del Taco and Franchisee or Franchisee's representative disagree as to whether a person has a permanent disability, the existence of the permanent disability shall be determined by a licensed practicing physician selected by Del Taco upon examination of such person or, if such person refuses to be examined, then such person shall automatically be deemed permanently disabled for the purposes of this Section 12.8 as of the date of refusal.
Del Taco shall pay the cost of the required examination.
- 12.9 Notification Upon Death or Permanent Disability.
Within ten (10) days after the death or permanent disability of Franchisee (if a natural person) or an owner, Franchisee or Franchisee's representative shall notify Del Taco of the death or permanent disability in writing.
Any transfer upon death or permanent disability will be subject to the same terms and conditions set out in this Section 12 for any inter vivos transfer.
Source: Item 22 — CONTRACTS (FDD pages 58–59)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, Del Taco can require a franchise to be transferred if the franchisee or an owner with a controlling interest becomes permanently disabled. Permanent disability is defined as a physical, emotional, or mental condition that prevents the person from fulfilling their obligations under the franchise agreement for at least six consecutive months, with recovery within another six months being unlikely.
If Del Taco and the franchisee disagree on whether a permanent disability exists, Del Taco will select a licensed physician to examine the person in question. If the person refuses the examination, they are automatically considered permanently disabled. Del Taco is responsible for covering the cost of this examination.
The franchisee must notify Del Taco in writing within ten days of the permanent disability of the franchisee or an owner. The transfer must be completed within six months after Del Taco provides notice to the franchisee. Any transfer due to permanent disability is subject to the same terms and conditions as any other transfer of the franchise.