Besides interim relief and franchise-specific disclosures, what is the obligation regarding the confidentiality of the Del Taco arbitration proceedings and awards?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
Except as otherwise provided in this Agreement, any claim, controversy or dispute arising out of or relating to this Agreement, the Restaurant, or the relationship created by this Agreement, including any claim by Developer or its owners, concerning the entry into, the performance under, or the termination of this Agreement, or any other agreement between the parties will be resolved via binding arbitration under the authority of the Federal Arbitration Act in accordance with the following provisions:
- (a) Any arbitration will be administered by the American Arbitration Association (or its successor) pursuant to its then-current commercial arbitration rules and procedures.
The arbitrator will have the authority to decide issues regarding arbitrability and the scope of the arbitrator's jurisdiction.
The arbitration must take place in the county in which our headquarters are located at the time of the dispute (currently Orange County, California).
- (b) Any arbitration must be on an individual basis, and not as part of a common, consolidated, or class action.
Source: Item 23 — RECEIPTS (FDD pages 59–325)
What This Means (2025 FDD)
Based on the 2025 Del Taco Franchise Disclosure Document, the document does not specify any obligations regarding the confidentiality of arbitration proceedings and awards, beyond the ability of either party to seek interim or preliminary injunctive relief in a court of law. The FDD outlines the process for arbitration, including the administration by the American Arbitration Association, the location of proceedings in Orange County, California, and the individual basis of any arbitration. However, it does not explicitly address whether the details of the arbitration process or the outcomes must be kept confidential.
Given the absence of specific confidentiality clauses related to arbitration, a prospective Del Taco franchisee should be aware that the details of any disputes with Del Taco that proceed to arbitration might not be protected from disclosure unless otherwise agreed upon or required by law. This could potentially lead to public knowledge of sensitive business information or disagreements between the franchisee and franchisor.
Therefore, it is important for a potential Del Taco franchisee to discuss this matter with the franchisor and legal counsel. Clarifying the franchisor's expectations and policies regarding confidentiality in arbitration, and potentially negotiating specific confidentiality agreements, could be prudent steps to protect sensitive information and manage potential risks.