Del Taco Just Shut Down 18 Locations Leaving Only One in Colorado
There is now only one Del Taco in the entire state of Colorado thanks to a franchisee dispute that led to 18 locations abruptly shuttering its doors. According to Restaurant Business, the closed locations were all owned by Newport Ventures, which went bankrupt after losing financial support from its lender. "At this time, our Denver and Colorado Springs franchise locations are temporarily closed," the company said in a statement. "We will re-open these locations as soon as possible and will share updates as they become available." Here's why the Del Taco locations were forced to close down.
Money Troubles
According to court documents, Newport Ventures bought 18 Del Taco restaurants in 2023 for $14.1 million. The operator borrowed $11.8 million from National Bank Holdings, with $3 million earmarked for remodels. The financial rupture happened when Newport Ventures had an outstanding unpaid $125,000 fee for 10 restaurants that were set to be built, leading Del Taco to terminate the franchise agreement. This led the operator to file for bankruptcy.
Health and Safety Violations
Del Taco accused Newport Ventures of significant mistakes made before the locations were shuttered, accusing them of having a "cavalier approach" to customer health and safety. "I am left with no choice but to cease operations immediately," CRO Allen Soong wrote, according to Restaurant Business. The franchises were also sent an email letting them know all locations were closing down: "It is with our deepest regret that we must inform you that the company's continued financial challenges have forced us to make the difficult decision to close the stores immediately."
Financial Issues
The Jack In the Box owned chain's quarter same-store sales fell 4.5% to $285 million. "For Del Taco, it was another challenging quarter with pressured same-store sales results, and Del is also expected to post negative same-store sales in the second quarter," interim principal executive officer Lance Tucker said in an earnings call with analysts on Tuesday, via OCBJ. "With that said, we have seen an encouraging start to the menu optimization initiative, which rolled out system wide in the middle of the first quarter and has driven higher attach rates and better average check."
Jumbo Shrimp
Del Taco is focusing on improving sales and menu offerings, with the return of Jumbo Shrimp to the menu as part of its "Lent-friendly" seafood deals. From Feb. 20 through April 23, guests can enjoy Jumbo Shrimp Tacos, Jumbo Shrimp Burritos, and Beer-Battered Fish Tacos. "Seafood lovers deserve more than the standard fast-food fish options, which is why we're bringing Jumbo-sized flavor to the menu," said Tom Rose, President of Del Taco. "Bringing back our Jumbo Shrimp and offering our wild-caught Beer-Battered Fish at new unbeatable prices, our guests know they can get the bold taste and quality ingredients they crave. The perfect combo for the Lent season."
Real Deal Menu
Budget-conscious fast-food lovers will appreciate Del Taco's new additions to its Real Deal$ menu—the Bean, Rice and Cheese Burrito and Chipotle Chicken Burrito. "Del Taco has always been committed to delivering bold flavors and exceptional value, and the addition of our two new burritos to our Del's Real Deal$(™) menu and Del's Bundles continue that tradition at an unbeatable price," Rose said. "Not to mention, our new Dragon Fruit Blueberry Poppers beverages are packed with flavor too. Juicy dragon fruit and a burst of blueberry flavor, a combination that will have Guests coming back for more."
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