Del Taco
Del Taco offers Mexican-American and American cuisine in quick-service restaurants. Known for its tacos, the brand operates in the fast-food sector.
About Del Taco
Del Taco Restaurants, Inc. is an American fast food restaurant chain focused on a variety of tacos, burritos, french fries, and burgers. Del Taco is a subsidiary of Yadav Enterprises and is led by Chief Transformation Officer Ulyses Camacho. It is headquartered in Lake Forest, California and has approximately 595 locations in 18 US states.
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Del Taco franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation of a Del Taco franchised business ranges from $1,497,200 to $3,321,000. This includes between $46,700 to $156,000 that must be paid to the franchisor or its affiliate(s). [p.1]
What is the initial franchise fee?
The initial franchise fee is $35,000, which Franchisee shall pay upon execution of the Agreement. This fee is fully-earned and non-refundable in consideration of administrative and other expenses incurred by the Franchisor [p.157].
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is 5% of Net Sales for the Restaurant [p.158]. Additionally, during the term of the agreement, a royalty of 40% of Net Sales from Games and Devices is also payable [p.158]. Del Taco uses the marketing fees to enhance the image of the System through various advertising, marketing, public relations, and promotional activities [p.176].
How long is the initial franchise agreement, and can I renew it?
This isn't specified in the excerpts.
Can I sell or transfer my franchise, and what does that require?
Yes, you can sell or transfer your franchise, but it requires approval from Del Taco. According to [p.230], good cause for refusal includes preventing transfers except under certain conditions. Additionally, you must pay a non-refundable transfer fee of $5,000 at the earlier of when the transferee signs the new agreement or begins training ([p.187]). If the transfer is not consummated due to reasons other than Del Taco's disapproval, you will also need to reimburse Del Taco for its incurred costs and expenses related to evaluating the proposed transfer ([p.187]).
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement on any grounds available by law [p.234]. Additionally, the franchisor may terminate a franchise prior to expiration only for good cause, which includes the failure of the franchisee to comply with lawful provisions of the franchise agreement and to cure such failure after being given written notice and a reasonable opportunity to do so [p.230(c)].
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts.
Do I get an exclusive or protected territory?
You do not receive an exclusive territory [p.38]. However, you are granted a Protected Area around your approved restaurant location, which is a one-mile radius from the front door of your Del Taco Restaurant, excluding Alternative Points of Distribution [p.38].
What training and ongoing support does the franchisor provide?
The franchisor provides technical support at your restaurant through the first day of opening [p.26]. After your first restaurant opens, they will monitor training levels and assist with maintaining proper training for management and crew [p.37]. This includes in-store training available via an e-learning platform for future managers [p.37].
How many franchised outlets are there, and how many have closed or been terminated?
As of the end of their most recent fiscal year ended September 29, 2024, there were a total of 461 franchised Del Taco restaurants. According to the FDD excerpts provided, no freestanding franchised restaurants closed after being open less than 12 months during the fiscal years surveyed from 2015 to 2024 [p.52]. This isn't specified in the excerpts regarding terminations beyond the opening period of 12 months.
Does the franchisor share any financial performance or earnings information?
The franchisor does not make any financial performance representations other than the one specified in [p.54], and it does not authorize its employees or representatives to make such representations either orally or in writing. However, if you are purchasing an existing outlet, the franchisor may provide actual records of that outlet's performance. [p.54]
What am I restricted to selling, and where must I buy supplies?
You are restricted to offering and selling only those products and services that the franchisor has approved [p.42]. You must purchase all goods, products, menu items, foodstuffs, beverages, packaging materials, signage, furniture, fixtures, equipment, computer hardware and software, and small wares ('Supplies') used to operate or furnish your Del Taco Restaurant from vendors who demonstrate the ability to meet the franchisor's standards and specifications and whom they have approved in writing [p.28].