What does the agreement regarding trade secrets prevent Del Taco franchisees and managers from doing?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
10.1 Confidential Information. Franchisee shall not, during the term of this Agreement or thereafter, communicate, divulge, or use for the benefit of any other person, persons, partnership, entity, association, or corporation any confidential information, trade secrets, knowledge, or know-how concerning the methods of operation of the business franchised hereunder which may be communicated to Franchisee or of which Franchisee may be apprised by virtue of Franchisee's operation under the terms of
this Agreement (the "Confidential Information"). Franchisee shall divulge such Confidential Information only to such of its employees as must have access to it in order to operate the Restaurant. Any and all information, knowledge, know-how, and techniques which Del Taco designates as confidential shall be deemed confidential for purposes of this Agreement, except information which Franchisee can demonstrate came to its attention prior to disclosure thereof by Del Taco; or which, at or after the time of disclosure by Del Taco to Franchisee, had become or later becomes a part of the public domain, through publication or communication by others. Any employee who may have access to any Confidential Information regarding the Restaurant shall execute a covenant that s/he will maintain the confidentiality of information they receive in connection with their association with Franchisee. Such covenants shall be on a form provided by Del Taco, which form shall, among other things, designate Del Taco as a third party beneficiary of such covenants with the independent right to enforce them. Notwithstanding any other provision of this Agreement, there may be certain, limited circumstances where applicable law allows for the disclosure of certain trade secrets, as specified in the Manuals.
- 10.2 Irreparable Injury.
Franchisee acknowledges that any failure to comply with the requirements of this Section 10 will cause Del Taco irreparable injury, and Franchisee agrees to pay all court costs and reasonable attorney's fees incurred by Del Taco in obtaining specific performance of, or an injunction against violation of, the requirements of this Section 10.
- 10.3 Information Exchange.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD page 42)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, franchisees are restricted from divulging or using confidential information, trade secrets, knowledge, or know-how related to the operation of the Del Taco business for the benefit of any other person or entity, both during and after the term of the Franchise Agreement. This includes any information designated as confidential by Del Taco, unless the franchisee can prove it was already known to them or has become public knowledge through no fault of their own. Franchisees are only allowed to share confidential information with employees who need it to operate the restaurant.
To ensure confidentiality, Del Taco requires that any employee with access to confidential information sign a covenant agreeing to maintain its secrecy. Del Taco is designated as a third-party beneficiary of these covenants, giving them the right to enforce them independently. The agreement also acknowledges that any failure to comply with these confidentiality requirements will cause irreparable harm to Del Taco, making the franchisee liable for court costs and attorney's fees incurred by Del Taco in enforcing these provisions.
However, there are exceptions where disclosure of trade secrets is permitted under applicable law, such as the federal Defend Trade Secrets Act. Franchisees and their affiliates may disclose confidential information, including trade secrets, to government officials or attorneys for reporting or investigating suspected violations of law, or in legal documents filed under seal to protect them from public disclosure. This clause ensures that the agreement does not conflict with any laws that allow for specific disclosures.