Can Del Taco update or modify the insurance requirements for its franchisees?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
During the term of this Agreement, Franchisee shall obtain and maintain in full force and effect, at its own expense, such insurance coverages as may be required of franchisees by Del Taco.
The current insurance requirements are listed in this Section; provided that Del Taco may update or modify the insurance requirements in the Manuals, may provide changed or modified insurance requirements in any lease agreement between Del Taco (or its Affiliates) and Franchisee, or may otherwise change or modify insurance requirements in writing by Company, at its sole discretion.
Prior to the opening of the Restaurant and thereafter, throughout the term of this Agreement, Franchisee shall furnish Del Taco with evidence satisfactory to Del Taco of such insurance coverages in effect in the form of Certificates of Insurance and any insurance policy endorsements required by Del Taco, and a copy of the Franchisee's insurance policy(ies), if requested by Del Taco.
Source: Item 22 — CONTRACTS (FDD pages 58–59)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, Del Taco has the authority to modify the insurance requirements for its franchisees. The FDD states that while current insurance requirements are listed, Del Taco retains the right to update or modify these requirements. These changes can be communicated through the manuals, lease agreements between Del Taco (or its affiliates) and the franchisee, or in writing directly from the company.
This means that a prospective Del Taco franchisee must be prepared to adjust their insurance coverage during the term of the franchise agreement to comply with any changes Del Taco deems necessary. These changes are at Del Taco's sole discretion, giving franchisees little room to negotiate the terms. Franchisees are responsible for obtaining and maintaining the required insurance coverages at their own expense.
Throughout the agreement, franchisees must furnish Del Taco with satisfactory evidence of their insurance coverage, including Certificates of Insurance, any required policy endorsements, and copies of the insurance policies if requested. This ensures that Del Taco can verify compliance with their insurance requirements. Franchisees should factor in the potential for increased insurance costs when budgeting for their Del Taco franchise, as these requirements can change over time.