Under what conditions does the Del Taco franchise agreement automatically terminate without notice?

According to Del Taco's 2025 Franchise Disclosure Document, the franchise agreement can terminate automatically without notice under specific circumstances. These include unauthorized use of Del Taco's proprietary marks, failure to use the marks as directed, or contesting the validity of Del Taco's ownership of these marks. Additionally, the agreement can be terminated without notice if a franchisee fails to comply with the terms of the agreement or any other agreement with Del Taco on more than two occasions within a 12-month period. Finally, if the franchisee's right to possess the restaurant terminates for any reason, the franchise agreement is also subject to immediate termination without notice.

These conditions highlight the importance of strict adherence to Del Taco's brand standards and contractual obligations. For a prospective franchisee, this means understanding and complying with all aspects of the franchise agreement, including the proper use of trademarks and consistent operational compliance. Failure to do so could result in the immediate loss of the franchise.

In contrast, other defaults allow for a cure period, where the franchisee has a chance to rectify the issue before termination. These include failure to make payments, submit required information, or operate the restaurant according to Del Taco's standards. However, the defaults that trigger immediate termination without notice are typically related to intellectual property and repeated contractual breaches, reflecting Del Taco's emphasis on protecting its brand and maintaining consistent standards across all franchise locations.

Prospective franchisees should carefully review the franchise agreement to fully understand the conditions that could lead to termination, both with and without the opportunity to cure. Understanding these terms is crucial for managing risk and ensuring the long-term success of the franchise.