Under what conditions does Del Taco have the right to terminate the Franchise Agreement and Sublease for any of the locations?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
ept such employment offer. Buyer will not be obligated to hire Seller's employees, and Buyer will tender "at will" employment to those of Seller's former employees that Buyer elects to hire, effective as soon as feasible after the applicable Closing. Buyer will be responsible for and assume any and all liability relating to post-Closing employment of any of the employees at the Locations hired by Buyer.
- Buyer agrees and acknowledges that Buyer shall be obligated to comply at all times with the provisions of Section 5.1. of the Franchise Agreement for each of the Locations. Such section requires, among other things, (a) that the Locations be kept in good condition and in conformity with the "System" (as defined therein), and (b) that Buyer make any improvements and alterations as may be determined by Del Taco to be necessary.
- Buyer acknowledges that Del Taco shall have the right to terminate the Franchise Agreement and Sublease for any of the Locations as of the expiration of the current term of the Master Lease(s), or as of the expiration of any extension of such term, upon written notice to Buyer; provided, however, that following receipt of any such notice from Del Taco, if Buyer desires to remain at the subject Location(s), Buyer will be permitted to contact the master landlord(s) and negotiate terms directly with such master landlord(s), with the condition that Del Taco will be released from any and all lease obligations and/or guarantees with respect to the subject Location(s).
PURCHASE PRICE; OTHER PAYMENTS 3.
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Source: Item 23 — RECEIPTS (FDD pages 59–325)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, Del Taco has specific rights regarding the termination of the Franchise Agreement and Sublease under certain conditions. Del Taco can terminate the Franchise Agreement and Sublease for any of the locations as of the expiration of the current term of the Master Lease(s), or as of the expiration of any extension of such term. However, Del Taco must provide written notice to the buyer.
If the buyer desires to remain at the location(s) after receiving such notice, they are permitted to contact the master landlord(s) and negotiate terms directly with them. This is conditional on Del Taco being released from any and all lease obligations and/or guarantees with respect to the subject location(s).
Additionally, if a franchisee violates any obligation under the agreement, Del Taco may, in its sole discretion, immediately terminate the agreement with respect to any or all of the licensed restaurants without prior notice. Del Taco may also immediately terminate the agreement without prior notice if the franchisee fails to pay fees pertaining to a licensed restaurant within 30 days after it is due, if the Franchise Agreement for that licensed restaurant is transferred, or if the franchisee fails to cure any other breach of this Agreement within 15 days of written notice of the breach.