Does the Del Taco agreement transfer any intellectual property rights in the Software and Documentation to the licensee?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
Intellectual Property Rights. Licensee acknowledges and agrees that the copyright, patent, trade secret, and all other intellectual property rights of whatever nature in the Software and Documentation are and shall remain the property of Del Taco, and nothing in this Agreement should be construed as transferring any aspects of such rights to Licensee or any third party. Intellectual Property Rights include all forms of intellectual property rights and protections, including, without limitation, all right, title and interest in and to all: (i) Letters Patent, and all filed, pending or potential applications for Letters Patent, including any reissue, reexamination, division, continuation or continuation in-part applications, throughout the world now or hereafter issued; (ii) trade secrets, and all trade secret rights and equivalent rights arising under common law, state law, federal law and laws of foreign countries; (iii) mask works, copyrights, other literary property or authors' rights, whether or not protected by copyright or as a mask work, under common law, state law, federal law and laws of foreign countries; and (iv) proprietary indicia, trademarks, trade names, symbols, logos and/or brand names under common law, state law, federal law and laws of foreign countries.
Source: Item 23 — RECEIPTS (FDD pages 59–325)
What This Means (2025 FDD)
According to the 2025 Del Taco Franchise Disclosure Document, the agreement does not transfer any intellectual property rights in the Software and Documentation to the licensee. The document explicitly states that all copyright, patent, trade secret, and other intellectual property rights remain the property of Del Taco. This means that franchisees are only granted a license to use the software and documentation, but they do not own any of the underlying intellectual property.
This is a common arrangement in franchising, as it allows Del Taco to maintain control over its proprietary systems and protect its brand. The franchisee's use is limited to the terms of the agreement, including using the software at one personal computer in each licensed restaurant and not copying or distributing the software or documentation. Upon termination of the agreement, the franchisee must cease using the software and documentation and return all copies to Del Taco.
Del Taco also has the right to inspect the licensed restaurants to verify the franchisee's compliance with the terms of the software agreement. The franchisee is responsible for site preparation necessary for the software's installation and use. The agreement also outlines the franchisee's responsibility to notify Del Taco of any unauthorized use or infringement of intellectual property rights and to assist in any related legal proceedings.
This arrangement protects Del Taco's intellectual property and ensures consistent brand standards across all franchise locations. However, it also means that franchisees have limited control over the software and documentation and must rely on Del Taco for updates and support. Franchisees should carefully review the terms of the software license agreement to understand their rights and obligations.