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Considering a Del Taco Franchise? Don’t Overlook These 16 Important Franchise Fees

by Franchise Chatter on March 21, 2017

in Franchise Fees, Mexican Restaurant Franchise



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Don't Invest in a Franchise Until You Check Out This List

Del Taco Restaurant Exterior Photo by Hazboy

This post was updated on September 18, 2017 to reflect information from Del Taco’s 2017 FDD.

If you are considering a Del Taco franchise, don’t get blindsided by these 16 important franchise fees (from the initial franchise fee, to the royalty fee, to 14 other fees found in Items 5 and 6 of Del Taco’s 2017 FDD).



1.  Franchise Fee:  $35,000

  • If you purchase the rights to develop and operate one Del Taco restaurant under a Franchise Agreement, you must pay Del Taco a Franchise Fee of $35,000 and a Promotional Fee of $10,000 when you sign the Franchise Agreement, which must occur within 10 days after construction begins. Del Taco earns those fees when paid and has no obligation to refund them for any reason.
  • On signing the Development Agreement, you must pay the full Franchise Fee for the first restaurant, plus $17,500 for each additional restaurant to be developed under the Development Agreement. Del Taco will credit the $17,500 against the Franchise Fee for your second and each subsequent restaurant as it opens. Del Taco earns those fees when paid and has no obligation to refund them for any reason.

Incentive Programs

Market Specific Development Incentive Program:  $20,000 off the Franchise Fee

  • Del Taco currently offers a “Market Specific Development Incentive Program” for qualified franchisees that commit to opening a minimum of five new restaurants in specifically designated new markets under a Development Agreement. Under the Market Specific Development Incentive Program, for any restaurants opened under the Development Agreement in accordance with the development schedule, Del Taco will waive $20,000 of the $35,000 Franchise Fee.
  • Under the Market Specific Development Incentive Program, for all restaurants opened under the Development Agreement in accordance with the development schedule, Del Taco will reduce the royalty fee to 2.0% during the restaurants’ first year of operations, 3.0% during the restaurants’ second year of operations, and 4.0% during the restaurants’ third year of operations.

2.  Pre-Opening Support:  $1,700 to $3,500

  • Before the opening of your restaurant, Del Taco will provide technical support at your restaurant through the first day of opening of your restaurant. The date and time of the pre-opening support will be determined by Del Taco in its sole discretion. You must reimburse Del Taco for its travel, meals, lodging, and expenses, which are estimated to range from $1,700 to $3,500.

3.  Promotional Fee:  $10,000

  • You spend the Promotional Fee, with the approval and coordination of Del Taco’s Marketing Department, for the purpose of promoting your restaurant. You must submit invoices to Del Taco for promotional expenditures for its direct payment to the vendor or for reimbursement.  Del Taco will not pay or reimburse you for food or paper costs.
  • If you do not spend the Promotional Fee within one year after the opening date of your restaurant, you will forfeit the unused portion of the fee and Del Taco will apply it toward its general advertising programs.

4.  Purchase Price of Company-Owned Restaurant:  $50,000 to $1,500,000



  • In the case of a conversion of a company-owned restaurant to a franchised restaurant, Del Taco will negotiate the purchase price, taking into account the value of the restaurant’s equipment, signs, cash flow, and leasehold or other real property interests, plus the Franchise Fee. The total purchase price is expected to range from $50,000 to $1,500,000.

5.  Royalty:  5% of net sales

  • Due Date:  Payable weekly by electronic funds transfer on the third calendar day following each sales week in which the sales occurred.
  • Net sales include all revenue from the restaurant, except for refunds and sales or similar taxes.

6.  Marketing:  4% of net sales

  • Due Date:  Payable weekly by electronic funds transfer on the third calendar day following the sales week in which the sales occurred.
  • Del Taco may increase the fee to the then-current fee it charges new franchisees.

7.  Computer Systems Support Services Fee:  $40 per week and $150 per hour for on-site installation of PCs and software, and for on-site troubleshooting, billed in 15 minute increments, plus any costs for materials

  • Due Date:  Payable after opening, in weekly installments with your royalty fee payments.
  • You must purchase and maintain the systems Del Taco requires.
  • Del Taco may increase the fee to the then-current fee it charges new franchisees.
  • In addition to required computer software programs, you have the option to purchase restaurant theft detection software from Del Taco. Currently, it does not charge a fee for this optional program, although it may do so in the future.

8.  Market Force Information Fee:  $3.08 per week

  • Due Date:  Payable after opening in weekly installments with your royalty fee payments.
  • You must participate in Del Taco’s electronic guest experience measurement program, which provides data regarding customer satisfaction with your restaurant, among other information. You must pay Del Taco a weekly fee for access to the guest experience measurement technology platform.
  • Del Taco may increase the fee to the then-current fee it charges new franchisees.

9.  PeopleMatter:  $5.00 per week

  • Due Date:  Payable after opening, in weekly installments with your royalty fee payments.
  • You must participate in Del Taco’s online learning management system, which provides training to all of Del Taco’s restaurant employees. You must pay Del Taco a weekly fee for access to the online learning management system.
  • Del Taco may increase the fee to the then-current fee it charges new franchisees.

10.  Transfer Fee:  at least $5,000 per restaurant and possibly more in order to cover Del Taco’s costs of review and approval, including attorney fees



  • Due Date:  Before consummation of the transfer.
  • Payable when you sell your franchise or, if a legal entity, when a controlling interest in the entity transfers.

11.  Interest:  7 percentage points in excess of the prime rate per annum, as published in The Wall Street Journal

  • Due Date:  As incurred.
  • Del Taco may charge interest on past due amounts.

12.  Successor Fees:  the fee being paid by other franchisees for a successor Agreement, but not less than $35,000, plus the then-current Promotional Fee (currently $10,000)

  • Due Date:  On execution of the successor Franchise Agreement.
  • Payable when you transfer the Franchise Agreement or a controlling interest in you. You must pay the Successor Fee and Promotional Fee in addition to any remodel costs required.

13.  Audit Fees and Expenses:  will not exceed Del Taco’s actual out-of-pocket costs (currently about $1,000 to $2,000)

  • Due Date:  As incurred.
  • You must pay all amounts shown as due. If you understated net sales by 1% or more, you also must pay all costs of the audit.

14.  Indemnification Costs:  varies

  • Due Date:  As incurred.
  • You must pay for the cost of defending Del Taco against any liability as a result of your operations.

15.  New Product and Vendor Testing:  will not exceed Del Taco’s actual out-of-pocket costs (currently about $2,000 to $3,000)

  • Due Date:  As incurred.
  • If you desire to purchase any items from an unapproved vendor, you must submit a written request to Del Taco for approval. Del Taco has the right to require, as a condition of its approval, that its representative inspect the vendor’s facilities and take samples from the proposed vendor for testing.

16.  Reimbursement of Insurance:  cost of obtaining coverage

  • Due Date:  On receipt of invoice.
  • If you fail to procure the required insurance, Del Taco may secure that insurance and require you to reimburse it for the premiums and other expenses relating to obtaining that insurance.

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