Under what conditions will the post-term non-compete period for a Del Taco franchisee not begin to run?

According to Del Taco's 2025 Franchise Disclosure Document, the post-term non-compete period will not begin until the franchisee starts complying with the non-compete terms. This means that if a franchisee violates the non-compete agreement after the franchise agreement ends, the two-year clock on the non-compete doesn't even start until they cease the violating activity.

The non-compete agreement states that the franchisee cannot be involved in a Competitive Business, which is defined as a restaurant or food service business offering Mexican or similar style menu items in a quick service, fast food, or fast casual format. This restriction applies for two years after the franchise agreement terminates, expires, or after a final order from an arbitrator or court. The restriction applies within the Protected Area of the Restaurant or within two miles of any other Del Taco restaurant.

This condition creates a significant risk for franchisees who may inadvertently violate the non-compete terms. For example, if a former franchisee opens a non-compliant restaurant, the two-year non-compete period could be extended indefinitely until the franchisee ceases the violating activity. Therefore, it is crucial for prospective Del Taco franchisees to fully understand the scope of the post-term non-compete and ensure strict compliance to avoid unintentionally extending the restriction.