Del Taco: Franchise Costs, Fees, Profit & Locations

Del Taco is a fast-food restaurant franchise specializing in Mexican-inspired cuisine.

Del Taco was founded in 1964 and has since grown to become the second-largest brand in the fast-growing Mexican quick-service restaurant category. Del Taco is known for serving freshly prepared, Mexican-inspired food at competitive prices, a combination that has contributed to its loyal fan base and strong presence across the United States.

With over 590 locations in 15 states, Del Taco offers a variety of menu items including tacos, burritos, quesadillas, nachos, and more. The restaurant is actively expanding across the U.S. and is seeking passionate multi-unit restaurant operators to join its franchise system.

Del Taco's fast-food business model prioritizes flexibility, convenience and scalability to adapt to changing consumer preferences and market dynamics while maintaining a focus on quality and freshness in its offerings.

Here are some key aspects of Del Taco's business model:

• Fresh Flex Store Design: Del Taco has introduced a new store design prototype that focuses on striking exteriors and distinctive interiors to evoke a contemporary feel. It aims to lower net investment costs and improve real estate flexibility.

• Ultimate Convenience Platform: The business model emphasizes an ultimate convenience platform, which includes efficient kitchen designs to optimize labor and improve guest experience. It also features dedicated mobile app and delivery drive-thru lanes, contactless third-party delivery pickup stations, and inviting on & off-premise dining options.

• Flexible Construction Plan: Del Taco's flexible construction plan allows for the construction of locations in a wide variety of traditional and non-traditional venues, catering to diverse customer needs and preferences.

• Preferred Site Criteria: Del Taco has specific criteria for selecting new restaurant locations, including land size, building size, population, employment, household income, and traffic counts. These criteria ensure that new locations are strategically positioned for success.

Del Taco has a diverse range of preferences concerning land, demographic, and site characteristics when evaluating potential locations for new restaurants. They emphasize the following specifications:

• Land Size: Minimum of 25,000 Square Feet

• Building Size: Minimum of 1,200 Square Feet

• Population: Minimum of 10,000 within a one-mile radius

• Employment: Minimum of 3,000 within a one-mile radius

• Household Income: Average of $65,000

• Traffic Counts: Minimum of 25,000 Daily

Del Taco's adaptable construction plan allows for the establishment of locations in various traditional and non-traditional venues, including free-standing buildings, endcaps, co-development projects, convenience stores (c-stores), travel plazas, airports, stadiums, college campuses, military bases and more.

The Del Taco AUV for freestanding franchised restaurants in 2022 is $1,618,863.

Opening a Del Taco franchise requires an estimated initial investment ranging from $812,700 to $2,467,500, with a minimum liquidity of $500,000 and a minimum net worth of $1,000,000. Each franchise location requires a $35,000 franchise fee, and ongoing royalties consist of 5% of net sales and 4% for advertising.

There is a reduced royalty payment structured as follows: 1% in year 1, 2% in year 2, 3% in year 3, 4% in year 4, and 5% thereafter.

The franchise fee is $35,000.

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