Franchisee Development Deals Follow Q4 Same Store Sales Increase of 7.5% at Franchise Locations**
LAKE FOREST, Calif. – Del Taco, the nation’s second largest Mexican quick service restaurant
chain, is carrying tremendous momentum into the first quarter of 2021. Despite pandemic induced pressures, the brand was resilient during the initial COVID-19 slowdown and began to
thrive during the second half of 2020. This led to their eighth consecutive year of positive
franchise same store sales growth which provides a great trajectory for the brand as it continues
through 2021. Underscoring their tremendous performance, franchised locations have enjoyed
topline sales strength that far exceeds industry trends.*
In Del Taco’s recent financial reports, the following notable highlights were included:**
- In Q3, franchised same store sales increased 6.5%;
- In Q4, franchised same store sales increased 7.5%;
- For fiscal year 2020, franchised same store sales increased 1.4%
“Our brand’s QSR-plus positioning continues to resonate with fans across a wide geographic
footprint, and we couldn’t be more pleased with our systemwide results led by strong franchise
same store sales growth,” said John D. Cappasola, Jr., President and Chief Executive Officer of
Del Taco. “Moving forward we are focused on systemwide growth led by franchising and we are
excited to work with active developers to bring the Del Taco brand to guests in new and existing
territories. These strong franchised same store sales results and the launch of the new Fresh
Flex prototype make it an exciting time be part of our great brand.”
Existing Del Taco franchisees are riding this wave into 2021 as multi-unit developers continue to
sign franchise agreements in both established and untapped markets. Recognizing the
opportunity to meet accelerating demand, seasoned multi-unit owner Dennis Ekstrom recently
signed a new development agreement to add more units to his existing portfolio. He is opening
his 12th restaurant in Truth Or Consequences, New Mexico this March, which is one of several
existing franchisee openings occurring this month.
“After 20-plus years in restaurant franchising, Del Taco has far exceeded my expectations with
clever marketing, smart operations and strong development support,” said Ekstrom. “We’re well
aligned with the leadership team as they make decisions to enhance our bottom line, and I’m
confident in the growth opportunities that are on the horizon.”
Beyond existing franchisee growth, Del Taco continues to make progress partnering with
experienced operators to help grow the brand through new development agreements in both
established and emerging markets. Most recently, the brand signed an 11-restaurant
development agreement with multi-brand franchise operator Peachtree Development. Bringing
strong development and restaurant experience, the group is focused on growing the brand in
South Carolina and Georgia.
The focus on franchisee growth and recruitment is helped by the recent unveiling of the bold
new Fresh Flex design that reconceptualizes Del Taco restaurants inside and out. Striking
exteriors and distinctive interiors evoke a fresh, fun and contemporary feel, all while improving
real estate access for franchisees, and providing ultimate convenience for guests and operators.
With tech-savvy, innovative additions like third-party pick-up stations and double drive-thru
lanes with a dedicated lane for mobile orders and delivery pickups, the future-focused model
optimizes operational efficiencies and caters to modern consumers' expectations: accessibility,
speed of service, and brand transparency.
Del Taco is leveraging the Fresh Flex design to offer multiple buildout options, maximizing
growth opportunities through a “Menu of Venues” strategy with building prototypes that vary in
size from 1,200 to 2,400 square feet. The various prototypes allow company or franchise
developers more flexibility in choosing real estate opportunities, including small footprint drivethru only models, drive-thru endcaps, conversions and freestanding sites. Likewise, the design
will also play an integral role in the brand’s remodeling program to contemporize the fleet and
help drive returns.
The brand continues to operate nearly half of the system’s restaurants, creating perfect
alignment with franchisees on strategies to drive top and bottom line results. Across 16 states
today, Del Taco has tremendous white space capacity to grow and is looking to develop with
experienced individuals and operating teams across the nation.
To learn more and to inquire about available franchise opportunities, visit
www.deltacofranchise.com.
About Del Taco Restaurants, Inc.
Del Taco (NASDAQ: TACO) offers a unique variety of both Mexican and American favorites
such as burritos and fries, prepared fresh in every restaurant's working kitchen with the value
and convenience of a drive-thru. Del Taco's menu items taste better because they are made
with quality ingredients like fresh grilled chicken and carne asada steak, sliced avocado, freshly
grated cheddar cheese, slow-cooked beans made from scratch, and creamy Queso Blanco.
Founded in 1964, today Del Taco serves more than three million guests each week at its
approximately 600 restaurants across 16 states. Del Taco’s commitment to providing guests
with the best quality and value for their money originates from cooking, chopping, shredding and
grilling menu items from scratch. For more information, visit www.deltaco.com.
*Black Box Intelligence
**Please refer to Del Taco 2020 Amended FDD