Risk Score
Pending analysis
Investment Range
$856,000 - $6,647,000
Franchise Fee
$26,250
Total US Locations
594
Business Summary
Del Taco operates quick-service, fast-casual restaurants specializing in Mexican-American cuisine. Del Taco offers a standardized menu including tacos, burritos, burgers, shakes, and breakfast items. Del Taco restaurants are designed using a 'Fresh Flex' prototype, which is adaptable for various real estate options like freestanding or end-cap locations, ranging from approximately 1,152 to 2,304 square feet, and typically employ 20 to 45 people.
Corporate History
Del Taco was originally formed as a California corporation on January 21, 1988, later converting to a California limited liability company in March 2006. The company has operated and franchised Del Taco restaurants since February 1990. In March 2022, Del Taco Holdings, Inc. (Del Taco's parent) was acquired by Jack in the Box Inc. In May 2025, Jack in the Box Inc. announced it was exploring strategic options for the Del Taco brand, including possible divestiture.
Financial Overview
Investment Range
$856,000 - $6,647,000
Franchise Fee (Low)
$26,250
Franchise Fee (High)
$35,000
Royalty %
5%
Marketing %
4%
Equipment Costs (Low)
$1,141,000
Equipment Costs (High)
$2,708,000
Working Capital
$46,500
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Del Taco's parent company, Jack in the Box Inc., has audited financial statements with an unqualified opinion from the auditor regarding internal control over financial reporting. However, the auditor identified the evaluation of goodwill impairment for the Del Taco brand as a critical audit matter due to the high degree of subjective judgment involved in estimating the fair value and the potential for significant effects from changes in revenue growth rate assumptions. The FDD also includes a special risk note stating that the franchisor's financial condition, as reflected in its financial statements, calls into question its ability to provide services and support. Furthermore, in May 2025, Jack in the Box Inc. announced it is exploring strategic options related to the Del Taco brand, including possible divestiture.
Financing Details
Del Taco does not offer any direct or indirect financing arrangements to its franchisees. Additionally, Del Taco does not guarantee any franchisee notes, leases, or other financial obligations.
Performance Metrics
Total US Locations
594
Franchised Units
461
Corporate Units
133
Avg Square Footage
1,728
Franchising Since
1990
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
Yes
Litigation Count
12
Litigation Summary
Del Taco and its parent company, Jack in the Box Inc., have been involved in several legal disputes. Some cases are ongoing, including a lawsuit filed in the Philippines against a former Jack in the Box franchisee regarding unlawful unit operations, which recently saw a decision in favor of the company but is awaiting potential appeal. Another ongoing case in Texas, filed in 2017, involves a former Jack in the Box franchisee alleging breach of franchise and lease agreements, where a jury initially awarded damages but the court later overturned the verdict; this case is currently on appeal. A new complaint was filed in Washington in March 2025 by two franchisees alleging violations of franchise and consumer protection acts after their franchise agreements were terminated. Del Taco itself had a class action lawsuit in California regarding wage provisions, filed in 2014, which was settled for $50 million in 2023. Another class action against Del Taco concerning a data breach, filed in 2019, was settled in 2023. Jack in the Box Inc. also settled several other significant lawsuits with franchisees between 2020 and 2021 regarding breach of contract, misrepresentation related to a repair program, and non-approval of sales. Additionally, Jack in the Box Inc. is subject to ongoing injunctive or restrictive orders, including a 1970 consent decree in Missouri regarding 'hamburger' advertising and a 2018 stipulation in San Diego for gift card redemption policies in California.
Bankruptcy History
Del Taco discloses that two of its current officers, Ryan Ostrom (Chief Customer and Digital Officer) and Steven Piano (Chief People Officer), were previously employed by GNC Holdings, Inc. This entity (and its affiliates) filed for Chapter 11 bankruptcy protection on June 23, 2020, while they were employed there. The reorganization plan was confirmed on October 14, 2020, and GNC Holdings, Inc. was reorganized. Del Taco emphasizes that GNC Holdings, Inc. and its successors were not and are not related to Del Taco or its affiliates. Aside from this, Del Taco has no other bankruptcy information to report.
Agreement Terms
Initial Term
20 years
Renewal Term
20 years
Renewal Conditions
To renew, Del Taco franchisees must not have any existing defaults under their current agreement and must provide written notice of their intent to renew at least 12 months in advance. Franchisees will need to sign a new franchise agreement, which might have significantly different terms, including potentially higher fees and a modified protected area. They must also sign a general legal release, ensure all monetary obligations are met, and pay both a Renewal Fee and a Promotional Fee. Del Taco may also require franchisees to remodel their restaurant and complete additional training programs.
Training & Support Program
Franchisor Assistance
Before opening, Del Taco provides assistance with a standard construction package, pre-opening training for the Del Taco System (including standards, methods, and procedures), initial inventory and supply orders, access to confidential operating manuals, and merchandising/marketing advice. Del Taco also conducts a pre-opening inspection. After opening, Del Taco monitors training levels, provides electronic access to updated manuals and training aids, offers periodic merchandising, marketing, and operational advice, and publishes bulletins and reports regarding plans, policies, and research. Del Taco can also specify or require certain communications, computer systems, and hardware for use in the restaurant.
Initial Training Hours
448
Training Location
Certified training restaurant, which may be a franchised or company-owned location, in various states, or at Del Taco's corporate headquarters in Lake Forest, California for some personnel.
Ongoing Support
Del Taco provides ongoing support by monitoring training levels and offering training for future management employees throughout the franchise agreement term. Franchisees receive electronic access to updated operating manuals and training aids. Del Taco also offers periodic merchandising, marketing, and other data and advice as it is developed. Support is available through periodic individual or group advice, consultations, and assistance via personal visits, telephone, online communications, mail, or email. Bulletins, intranet information, brochures, and reports regarding Del Taco's plans, policies, research, and activities are also provided.
Franchise Requirements
Ideal Candidate Profile
Del Taco is seeking qualified, independent businesspersons. The individual responsible for the direct operation of the franchise must participate personally in the business. For a single-unit franchisee, this individual must have at least two years of experience as a quick-service restaurant manager, or for a multi-unit franchisee, at least five years of experience. This operating principal must also hold at least a 10% equity interest in the business if the franchisee is a business entity, and must satisfactorily complete Del Taco's initial training program.
Industry Experience Required
Yes
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Min Years Experience
2
Operational Details
Location Type
retail
Owner Participation
hands-on
Territory Type
Protected
Staff Count
33
Territory Size Requirements
Del Taco grants franchisees a protected area which is generally a circular area with a one-mile radius from the front door of the Del Taco restaurant. This protected area excludes certain 'Alternative Points of Distribution.' For development agreements, the development area is defined by market points determined by Del Taco.
Staffing Notes
Del Taco requires franchisees to maintain a competent, trained staff sufficient to serve customers, with at least one Shift Manager on duty at all times. For initial training, a minimum of seven individuals must complete the program: the Operating Principal, one full-time Restaurant Manager, and at least five Shift Managers. For restaurants with 24-hour operations, a minimum of one certified Restaurant Manager and five Shift Managers are required (or nine Shift Managers for the first two restaurants). For non-24-hour operations, at least one Restaurant Manager and four Shift Managers are required (or seven Shift Managers for the first two restaurants). Franchisees are solely responsible for all employment decisions and functions, including hiring, firing, compensation, and scheduling.