Under the Del Taco Franchise Agreement, can a franchisee face competition from other channels of distribution or competitive brands that Del Taco controls?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.
Our affiliate, Different Rules, LLC ("Jack in the Box Franchisor"), franchises quick-service restaurants that operate under the "Jack in the Box" trademark and offer a variety of foods, including hamburgers, specialty sandwiches, French fries, tacos, salads, bowls, drinks, and side items. Our affiliate, Jack in the Box Properties, LLC ("JIB Properties") operates company-owned Jack in the Box restaurants. The principal business address for Jack in the Box Franchisor and JIB Properties is 9357 Spectrum Center Blvd., San Diego, California 92123. Jack in the Box restaurants may be located near your Del Taco restaurant's location, and may solicit and accept orders from customers near your Del Taco restaurant's location or within your Protected Area (under a Franchise Agreement), or Development Area (under a Development Agreement). These Jack in the Box restaurants may be located within your Protected Area or Development Area, or open there at any time. Though we have no current plans to do so, we and our affiliates (including those identified in Item 1) may operate or franchise co-branded or multi-branded Restaurants within your specified area that use our trade name, trademarks, and service marks together with the trade name, trademarks and service marks of one or more related or unrelated companies. We do not anticipate conflicts with, or between, Del Taco franchisees and Jack in the Box franchisees, or between Del Taco franchisees and the operators of co-branded or multi-branded restaurants, regarding territory, customers, or franchisor support because we only grant Del Taco franchises and the restaurant concepts offer different food products and dining experiences. If a conflict does arise, we will analyze the conflict and take actions (if any) that we deem appropriate, which may include participating in nonbinding mediation.
Source: Item 12 — TERRITORY (FDD pages 38–40)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, a franchisee may face competition from other channels of distribution or competitive brands that Del Taco controls. This means that even though a franchisee is granted the right to operate a Del Taco restaurant, Del Taco retains the right to operate or franchise other outlets, including those that might compete directly with the franchisee's location. This competition could come from various sources, including other Del Taco franchisees, outlets that Del Taco owns directly, or other distribution channels and brands that Del Taco has control over.
Del Taco's affiliate, Different Rules, LLC, franchises quick-service restaurants under the "Jack in the Box" trademark. These Jack in the Box restaurants may be located near a Del Taco restaurant's location, and may solicit and accept orders from customers nearby or within the Del Taco restaurant's Protected Area (under a Franchise Agreement) or Development Area (under a Development Agreement). These Jack in the Box restaurants may even be located within a franchisee's Protected Area or Development Area, or open there at any time.
Del Taco also retains the right to operate or franchise co-branded or multi-branded restaurants within a franchisee's specified area, using Del Taco's trade name, trademarks, and service marks along with those of related or unrelated companies. While Del Taco states they do not anticipate conflicts between Del Taco franchisees and Jack in the Box franchisees, or operators of co-branded or multi-branded restaurants, regarding territory, customers, or franchisor support, they also state that if a conflict does arise, they will analyze the conflict and take actions (if any) that they deem appropriate, which may include participating in nonbinding mediation. This lack of an exclusive territory and the potential for competition from other brands and channels controlled by Del Taco is a significant factor for prospective franchisees to consider.