Del Taco Just Abruptly Shuttered 18 Locations

Del Taco fans were shocked when the popular Tex-Mex fast-food chain abruptly shuttered 18 of its previously popular locations.

According to Eat This, Not That!, a franchisee dispute is at the heart of the closings. By the time the “war” between the franchisees was over, there was only one Del Taco location in Colorado. The closed stores were all owned by Newport Ventures, which declared bankruptcy after losing financial backing 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.”

Court filings show Newport Ventures paid $14.1 million for 18 Del Taco stores in 2023. The operator borrowed $11.8 million from National Bank Holdings, with $3 million set aside for remodeling. The financial crisis occurred after Newport Ventures failed to pay a $125,000 fee for 10 stores scheduled to be built, prompting Del Taco to terminate the franchise deal. This prompted the operator to declare bankruptcy.

The fast-food business also accused Newport Ventures of making serious blunders before closing the sites, accusing them of taking a “cavalier approach” to consumer health and safety.

“I am left with no choice but to cease operations immediately,” CRO Allen Soong wrote in an email to Newport Ventures. “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.”

Del Taco Still Expanding

Despite the Colorado drama, the Tex-Mex-inspired fast-food restaurant is still expanding its nationwide footprint, especially in Indiana. A new franchisee group will be opening around 10 sites in Indiana. Greenwood, Plainfield, and Avon are among the Indianapolis metropolitan area’s target markets, along with Bloomington, Bedford, and Columbus to the south.

The nearest Del Tacos to Indiana are currently in Michigan and Ohio. As of this writing, there are around 600 businesses across 17 states.

“We are thrilled to welcome this dynamic group of entrepreneurs to the Del Taco family,” said Van Ingram, vice president of franchise development, in a statement. “Their passion for the brand and business acumen are exactly what we look for when bringing on a new franchisee. We are confident that they will be successful in bringing the fresh ingredients and bold flavors of Del Taco to the Indianapolis community.”