Del Taco^®

Food & Beverage • Year: 2025

All product and company names mentioned are trademarks™ or registered® trademarks of their respective holders. Use of these names does not imply any affiliation with, sponsorship by, or endorsement by them.

What Is Del Taco?

Del Taco is a quick-service, fast-casual franchise offering a uniform menu of primarily Mexican-American foods such as tacos and burritos, along with burgers, shakes, French fries, breakfast items, soft drinks, and similar items. The primary service channels include fast-casual dine-in seating and drive-thru service, with restaurant staffing that typically ranges from about 20 to 45 employees. Franchise locations use the Del Taco Fresh Flex prototype (1,152 to 2,304 square feet) that is adaptable to free-standing buildings or end-cap drive-thru sites and may also be authorized in a variety of specified non-traditional venues (e.g., airports, stadia, malls, and similar sites).

Del Taco Franchise: Pros and Cons

The franchisor's perfect 100 training-and-support score and 448 hours of training-well above industry peers-shows heavy investment in operator preparation and ongoing support, but recurring legal friction, including 12 disclosed lawsuits, five alleged fraud cases, three franchisor enforcement actions and three franchisee-initiated settlements, poses significant operational and reputational risk.

Pros

A perfect 100 training-and-support score plus 448 hours of training - well above industry peers - indicates the franchisor invests heavily in operator preparation and ongoing support.

With 594 total outlets and 461 franchised units (both top-10% for Food & Beverage), the brand has scale that typically yields stronger recognition, supply-chain leverage, and a sizable peer network to learn from.

Zero franchisee-initiated judgments - unusually low versus peers - suggests disputes rarely escalate to court judgments.

Cons

Twelve disclosed lawsuits, five alleged fraud cases, three franchisor enforcement actions and three franchisee-initiated settlements - all well above typical - point to recurring legal friction between operators and the franchisor.

Estimated startup costs up to $3,321,000 (Item 7 max) with a minimum around $1,497,200, plus high asset and training cost estimates, are well above industry peers and substantially raise the capital and financing required to open.

Nine reacquired outlets and nine non-renewals (both well above typical) indicate higher-than-normal operator turnover, suggesting more frequent exits from the system.

Lawsuits & Legal Risk

64/100

NORMAL

Del Taco has faced significant employment class litigation (a $50M wage-and-hour class settlement approved 2023) and customer-data breach claims that settled in 2023; affiliated parent-company franchise disputes involve terminations, marketing funds and breach claims, some still on appeal. Due diligence: review Item 3 litigation details, Item 12 territorial/post-termination clauses, marketing-fund rules, and labor-compliance obligations.

Territory Protection

35/100

NORMAL

Del Taco grants a site-specific, non-exclusive protected territory: a circular one-mile Protected Area around the approved restaurant (Exhibit A), with site-selection governed by the Franchise Agreement. The grant is contingent on performance and compliance; Del Taco retains rights to develop nearby units, sell via online/alternative channels, and use other trademarks.

Training & Support

100

Excellent

The brand provides a comprehensive 448-hour training curriculum designed to prepare eight trainees for launch through a structured curriculum. The program includes on-site launch support for operational readiness; on-site assistance carries additional fees, and franchisees are responsible for travel and living expenses.

Franchisee Stability

78/100

Good

Del Taco earns a Good Stability Score. Three-year turnover of 2.82% is well below the typical Food & Beverage franchise (around 5%) and sits toward the lower end of turnover among the 258 Food & Beverage systems used for comparison. Out of 29 total exits across the three reported years, ceased operations dominated with 20, alongside 9 franchisor buybacks, no terminations, and no non-renewals.

The dominance of ceased operations suggests location-level economics: operators chose to close underperforming locations rather than exits driven by franchisor enforcement. Beyond its industry-relative position, a 2.82% three-year turnover rate is genuinely exceptional in absolute terms across all of franchising. For prospective franchisees, examine unit-level economics in the geographies where closures have concentrated.

Unit Growth Analysis

This franchise shows extremely slow but slightly accelerating growth: units rose from 591 (2023) to 592 (2024) - +1 unit (+0.17%) - then to 594 (2025) - +2 units (+0.34%), with the latest YoY growth ~0.3%. For investors that means a stable, low‑risk system with very limited expansion - growth has roughly doubled in rate year-over-year but the absolute additions are minimal, suggesting near‑saturation or a weak development pipeline unless franchise expansion activity picks up.

How Much Does It Cost to Open a Del Taco Franchise?

Opening a Del Taco franchise requires a total initial investment of $1,497,200 to $3,321,000, according to the 2025 Franchise Disclosure Document. This range covers the franchise fee, real estate, equipment, training, and initial working capital needed to launch and operate through the early months.

Minimum Investment

$1,497,200

Franchise Fee

Real Estate

Equipment & Assets

Reserves

Training

Other

Maximum Investment

$3,321,000

Minimum Investment Breakdown

Franchise Fee$35,000

Real Estate$517,000

Equipment & Assets$407,000

Reserves$28,000

Training$242,000

Other$268,200

Maximum Investment Breakdown

Franchise Fee$35,000

Real Estate$1,324,000

Equipment & Assets$757,000

Reserves$65,000

Training$321,000

Other$819,000

Investment Analysis

This investment analysis is coming soon. Have ideas for other analyses you'd like us to add? Get in touch.

The initial investment amounts shown are estimates only. Actual costs may vary based on location size, business model, and multi-unit ownership arrangements. We recommend reviewing the full Franchise Disclosure Document for complete details.

How Much Do Del Taco Franchise Owners Make?

Del Taco franchise locations reported average gross sales of $1,613,899 and median gross sales of $1,541,335 in 2025, based on financial performance data disclosed in Item 19 of the Franchise Disclosure Document.

Average Gross Sales:

$1,613,899

Median Gross Sales:

$1,541,335

High Gross Sales:

$6,898,837

Low Gross Sales:

$380,237

Sample Size:

387

Percent Attaining Average:

45.0%

Audit Status:

Unaudited

Franchise vs Corporate Performance: Franchised freestanding restaurants averaged $1,613,899 in sales in 2024, which is lower than the company-owned average sales of $1,804,158 reported for the same year, indicating company-owned outlets on average generate higher sales volumes in this dataset.

Performance Variability Analysis: There is substantial variability in franchised unit performance in 2024, with highest sales of $6,898,837 and lowest of $380,237, and only 45% of franchised units met or exceeded the average, signaling a wide dispersion around the mean.

Data Scope and Limitations: The Item 19 sales figures for franchised units do not include cost or expense data (company-owned units provide P&L detail), and 2022 was a shortened fiscal year that was annualized, so cost and profitability comparisons should be made cautiously.

Frequently Asked Questions

Is Del Taco a good franchise to own?

Whether Del Taco is a good franchise depends on your goals, experience, and local market. Key factors from the 2025 FDD: Del Taco operates 594 locations, received a legal risk score of 64/100, a training and support score of 100/100. Financial performance data is disclosed in Item 19. Prospective franchisees should review the full Franchise Disclosure Document and consult with a franchise attorney before making any investment decision.

Is a Del Taco franchise worth the investment?

The value of a Del Taco franchise investment depends on factors such as location, operator experience, and market demand. The initial investment ranges from $1,497,200 to $3,321,000. Del Taco disclosed average gross sales of $1,613,899 in 2025. Franchise investments carry inherent risk, and prospective buyers should conduct thorough due diligence before committing capital.

What is the failure rate of Del Taco franchises?

In the 2025 FDD, Del Taco reported 0 terminated franchises and 9 non-renewals out of 594 total locations. Franchise closures can result from many factors including market conditions, operator decisions, lease expirations, and franchisor enforcement actions. The FDD's Item 20 provides the most detailed unit turnover data.

How long does it take to break even with a Del Taco franchise?

Break-even timelines for Del Taco franchises are not disclosed in the 2025 Franchise Disclosure Document. Break-even periods vary significantly based on initial investment level, local market conditions, operating costs, and revenue ramp-up speed. Prospective franchisees should build a pro forma financial model using Item 7 cost estimates and, where available, Item 19 financial performance data from the FDD.

Is Del Taco a franchise or a corporate-owned business?

As of the 2025 FDD, Del Taco operates 461 franchised locations and 133 company-owned locations. Franchise opportunities are available through the franchisor's disclosure process.

Interested in Del Taco?

Get more information and connect with the franchise directly.