August 18, 2012
Del Taco franchise opportunity: Are you familiar with it?
If so, please share your experience, opinions or insights with a comment below.
According to data released by the Small Business Administration (SBA), Del Taco franchise owners who qualified for SBA-backed franchise loans have a loan failure rate of 21%.
Of the 50 SBA-backed loans issued to Del Taco franchise owners, a quarter were unable to repay their loans.
That percentage just barely earns Del Taco a spot in UnhappyFranchisee.com’s list of WORST FRANCHISES IN AMERICA (by SBA loan defaults)
Del Taco has been undergoing significant improvements.
In 2006, after nearly doubling in size, Del Taco was acquired by privately-held Sagittarius Brands.
In 2008, Del Taco opened its 500th restaurant, expanded to 16 states and achieved system-wide sales of $563 million.
According to its website,
“In 2010, Del Taco completed a recapitalization transaction with an infusion of equity capital from investors.
“This enabled Del Taco to continue its growth path and develop a new prototype design with a contemporary look, updated colors and new interiors which convey the freshness ‘cues’ that Del Taco stands by including freshly grated cheddar cheese, lard-free beans made from scratch, marinated chicken grilled throughout the day and hand-made pico de gallo.
“Company restaurants throughout the system are being reimaged and new franchise locations feature the prototype design.”
”The development and construction team at Del Taco has also revamped the overall building to reduce costs and improve through-put to meet increased customer traffic.
“This effort is benefiting new company restaurants as well as new franchise locations.
”By the end of 2011, Del Taco had more than 530 locations.”
Del Taco maintains a healthy balance of company-owned and franchised locations
We believe that a 20% SBA loan default rate is a red flag that warrants attention by prospective franchise owners.
We do salute Del Taco for maintaining a nearly 50% company-owned to franchise-owned store ratio.
We also are encouraged by the infusion of capital and the investment in concept, operational and marketing improvements.
And the overall, the growth of the chain seems sound.
What do you think of the Del Taco franchise opportunity?
Are you familiar with the Del Taco franchise opportunity?
What do you think accounts for the SBA loan failure rate of Del Taco franchise owners?
What steps should Del Taco be taking to stop further franchise failures?
Has Del Taco taken enough action to address the problems that led to these loan failures?
Please share a comment (anonymous is fine) or Contact UnhappyFranchisee.com.
If you are a Del Taco franchise representative or employee, please feel free to leave a comment or email us at UnhappyFranchisee[at]gmail.com.
ARE YOU FAMILIAR WITH THE DEL TACO FRANCHISE OPPORTUNITY?
ARE YOU A CURRENT OR FORMER DEL TACO FRANCHISE OWNER?
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