A few years ago, Del Taco hitched its wagon to a bigger brother to solidify operational longevity and launch a national expansion. They had solid brand recognition with a strong presence in the western United States. They had a loyal following with what could be described as a highly-entrenched presence in Southern California.
Then things changed.
Same-store sales started sliding. Restaurant closures were occurring every year. The brand slowly lost its footing. When was the last time you saw a Del Taco commercial? Personally, I can’t recall.
Last year, the numbers revealed a real problem. Same-store sales fell 3.9 percent, including a 4.2 percent drop at franchise locations. Systemwide sales declined 5.4 percent. The chain ended 2025 with 576 locations after opening 14 restaurants and closing 32.
It is no secret that Jack in the Box acquired Del Taco in 2022 for $585 million. Last year, Jack in the Box sold Del Taco for $115 million. Ouch. Pretty sure that’s not how the pros do it.
The lucky buyer: Yadav Enterprises
Let me make this very clear: Buying an established brand which has a massive presence in Southern California with 576 locations for only $200,000 per site is the steal of the century. Full stop.
I know of car wash operators that have 25 locations with enterprise value far greater than $115 million.
That being said, lottery winners often go broke.
Most people outside the restaurant industry have never heard of Yadav. Inside the industry, they’re a major operator - especially on the west coast.
Yadav started as a franchisee and built one of the largest restaurant portfolios in the country. They operate over 300 franchise restaurants across concepts like Jack in the Box, Denny’s, and TGI Fridays. Over the last few years they’ve started buying entire chains, including Taco Cabana and Nick the Greek.
Del Taco is the biggest brand in their portfolio and they just announced ambitious plans to turn the brand around. Some of you may have seen my recent posts stating that I had heard from Del Taco landlords that they had not received rent in January and February from Del Taco (since remedied). Not a great first couple months of ownership for Yadav. Nothing like introducing yourself to your new landlords by teetering on default. Yadav claimed accounting hiccups and growing pains from absorbing the units into their ecosystem. Maybe. Still not great.
Yadav’s turnaround plan is called Project Sunrise. An 18-month effort focused on improving food quality, bringing back classic menu items, simplifying the menu, and rebuilding the loyalty program.
One of the first moves was symbolic. As a SoCal kid that grew up thinking Del Taco was king of fast food, I love the nostalgia of this move…..
I went to college in Berkeley, CA, and during those 2:00 AM fast-food runs with friends I’d wax nostalgic about the Red Burrito at Del Taco. My friends from anywhere other than SoCal would ask, “What is this gypsy magic burrito you speak of, Chris?”
Some will never know. IYKYN (as the kids would “say”)
They are bringing back the original burrito lineup. The Del Combo Burrito. The Classic Chicken Burrito. The Beef Burrito. In other words, they’re trying to bring the brand back to what made it work in the first place.
Whether this actually works remains to be seen. I’m certainly rooting for them.
Turnarounds in the restaurant business rarely happen overnight.
Brands lose momentum slowly and they usually regain it in the same manner.
The interesting part here is the buyer.
Yadav isn’t a private equity group looking to flip the brand in a few years. They’re operators. They operate hundreds of restaurants themselves. They understand labor, supply chain, distribution, and day-to-day restaurant operations and performance.
Most importantly, they also sit in two very important seats of the restaurant industry table: franchisee AND franchisor.
They know what it feels like to not be supported by a franchisor, to suffer through terrible marketing campaigns where they paid in but have no say in the messaging. They also know what it is like to have franchisees basing their livelihoods on them running those same branding and marketing campaigns on behalf of their franchisees.
That matters. I always like working with people that have worn multiple hats and have sat at every seat at the table at different times.
Perspective matters. Perspective fosters wisdom.
If Yadav can stabilize operations and rebuild traffic, Del Taco still has something a lot of restaurant concepts would kill for: a large existing footprint in the best western markets.
California alone has hundreds of locations. Arizona and Nevada are also heavily penetrated.
They also have hundreds of legacy sites that benefit from low occupancy costs. I’d much rather rebuild a brand like Del Taco with their amazing Southern California presence and low occupancy cost basis than try to reboot a stagnating Starbucks brand with massive rents and rising competition in the coffee industry. Who are the competitors to Del Taco? Taco Bell. That’s really it. Who are the competitors to Starbucks? Dutch Bros, Pete’s, Philz, 7 Brew, Better Buzz, Swig, and a handful of others.
All of these “restaurants” sell flavored sugar water to addicts. True story: a few years ago the Starbucks real estate rep in my area was negotiating for a site owned by one of my best clients and told him “our customers are addicts.” Very nice.
Now, who can compete with the classic Red Burrito and crinkle fries? I’m gonna go out on a limb and say nobody.
I know I’m biased, but I’m rooting for Del Taco.
If the brand finds its footing again, they certainly have the infrastructure and brand equity in place to support rejuvenation and even growth.
I would just advise Del Taco to avoid using the advertising agencies used by Burger King or Carl’s Jr. in recent years. Talk about missing the mark. So so bad.
Del Taco is an important brand in fast food lore (if such a thing exists). They have a decent product (that’s the greatest compliment I can give to fast food) and they control amazing sites in the western United States.
For the brokers, investors, and developers watching from the front row, I’d say keep your eyes open. Jump into DealGround to turn over the stones that could have you first in line when an opportunity arises.
The early bird gets the worm and DealGround is the feeding ground for the early birds.
