Under what conditions will Del Taco not require or accept payment of the initial franchise fee?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
NCHISE BE DELIVERED TOGETHER WITH THE DISCLOSURE DOCUMENT.
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- The California Department of Financial Protection and Innovation has determined that we, the franchisor, have not demonstrated we are adequately capitalized and/or that we must rely on franchise fees to fund our operations. The Commissioner has imposed a fee deferral condition, which requires that we defer the collection of all initial fees from California franchisees until we have completed all of our pre-opening obligations and you are open for business. For California franchisees who sign a development agreement, the payment of the development and initial fees attributable to a specific unit in your development schedule is deferred until that unit is open.
The registration of this franchise offering by the California Department of Financial Protection and Innovation does not constitute approval, recommendation, or endorsement by the commissioner.
{See the last page of this Exhibit F for your Signature.}
HAWAII
THESE FRANCHISES WILL BE/HAVE BEEN FILED UNDER THE FRANCHISE INVESTMENT LAW OF THE STATE OF HAWAII. FILING DOES NOT CONSTITUTE APPROVAL, RECOMMENDATION OR ENDORSEMENT BY THE DIRECTOR OF REGULATORY AGENCIES OR A FINDING BY THE DIRECTOR OF REGULATORY AGENCIES THAT THE INFORMATION PROVIDED HEREIN IS TRUE, COMPLETE AND NOT MISLEADING.
THE FRANCHISE INVESTMENT LAW MAKES IT UNLAWFUL TO OFFER OR SELL ANY FRANCHISE IN THIS STATE WITHOUT FIRST PROVIDING TO THE PROSPECTIVE FRANCHISEE, OR SUBFRANCHISOR, AT LEAST SEVEN DAYS PRIOR TO THE EXECUTION BY THE PROSPECTIVE FRANCHISEE OF ANY BINDING FRANCHISE OR OTHER AGREEMENT, OR AT LEAST SEVEN DAYS PRIOR TO THE PAYMENT OF ANY CONSIDERATION BY THE FRANCHISEE, OR SUBFRANCHISOR, WHICHEVER OCCURS FIRST, A COPY OF THE OFFERING CIRCULAR, TOGETHER WITH A COPY OF ALL PROPOSED AGREEMENTS RELATING TO THE SALE OF THE FRANCHISE.
THIS OFFERING CIRCULAR CONTAINS A SUMMARY ONLY OF CERTAIN MATERIAL PROVISIONS OF THE FRANCHISE AGREEMENT. THE CONTRACT OR AGREEMENT SHOULD BE REFERRED TO FOR A STATEMENT OF ALL RIGHTS, CONDITIONS, RESTRICTIONS AND OBLIGATIONS OF BOTH THE FRANCHISOR AND THE FRANCHISEE.
- The following paragraph is added at the end of Item 21 of the Disclosure Document.
Attached at the end of Exhibit F to the FDD and incorporated into this Hawaii Addendum to the Franchise Disclosure Document are the unaudited financial statements for our parent, Jack in the Box Inc. and subsidiaries, as of January 21, 2024.
- Release. The language contained in Section 2.2.7 of the Franchise Agreement is hereby deleted in its entirety and the following is substituted in its place:
Franchisee and Franchisor shall execute a mutual general release, in a form prescribed by Franchisor, of any and all claims which each may have against the other and their affiliates (except as to amounts then due to Franchisor for royalties, advertising contributions, materials, and the like), and their respective shareholders, directors, employees, and agents in their corporate and individual capacities, excluding only such claims as each may have that arise under the Hawaii Franchise Investment Law.
- Conditions for Approval of Transfer.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 42–46)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, the timing of the initial franchise fee payment is subject to specific conditions and state regulations. Generally, Del Taco may defer the payment of the initial franchise fee until certain obligations are met. In several states, addenda modify the standard franchise agreement to delay when Del Taco collects the initial franchise fee.
In California, Del Taco defers the collection of all initial fees from franchisees until they have completed all pre-opening obligations and the restaurant is open for business. For California franchisees who sign a development agreement, the payment of development and initial fees attributable to a specific unit in the development schedule is deferred until that unit is open. Similarly, in Virginia, the initial franchise fee and other initial payments owed to Del Taco are deferred until Del Taco has completed its pre-opening obligations and the outlet is opened for business. The Virginia State Corporation Commission's Division of Securities and Retail Franchising also requires Del Taco to defer payment of the development fee and other initial payments until Del Taco has completed its pre-opening obligations under the Development Agreement.
In South Dakota, the fees payable under Item 5 of the Disclosure Document do not become due until the opening of the business at the Franchised Site. Likewise, in Illinois, payment of the Initial Franchise Fee and other initial fees are deferred until completion of Del Taco's pre-opening obligations for the restaurant. These deferral policies are often mandated by state franchise laws to protect franchisees, ensuring that Del Taco fulfills its obligations before receiving the initial franchise fee. This provides a level of security for the franchisee, aligning payment with the progress of the franchise setup.