In California, what rights do franchisees have concerning termination, transfer, or non-renewal of a Del Taco franchise, as provided by the California Business and Professions Code?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
California Business and Professions Code Sections 20000 through 20043 provide rights to the franchisee concerning termination, transfer, or non-renewal of a franchise.
If the Franchise Agreement contains a provision that is inconsistent with the law, the law will control.
You must sign a general release of claims if you renew or transfer your franchise.
California corporations code §31512 voids a waiver of your rights under the franchise investment law (California corporations code §§31000 through 31516).
Business and professions code §20010 voids a waiver of your rights under the franchise relations act (business and professions code §§20000 through 20043).
Prospective franchisees are encouraged to consult private legal counsel to determine the applicability of California and federal laws (such as Business and Professional Code Section 20040.5, Code of Civil Procedure Section 1281, and the Federal Arbitration Act) to any provisions of a Franchise Agreement restricting venue to a forum outside the state of California.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 42–46)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, California franchisees have specific rights regarding termination, transfer, or non-renewal of their franchise, as outlined in California Business and Professions Code Sections 20000 through 20043. If any provision in the Franchise Agreement is inconsistent with these laws, the law will take precedence.
Additionally, California Corporations Code §31512 voids any waiver of rights under the Franchise Investment Law (California Corporations Code §§31000 through 31516), and Business and Professions Code §20010 voids any waiver of rights under the Franchise Relations Act (Business and Professions Code §§20000 through 20043). This means that franchisees cannot waive their legal protections under these codes.
Furthermore, prospective Del Taco franchisees in California are encouraged to seek independent legal counsel to understand how California and federal laws, such as Business and Professional Code Section 20040.5, Code of Civil Procedure Section 1281, and the Federal Arbitration Act, apply to any provisions in the Franchise Agreement that restrict venue to a forum outside of California. This is particularly important because the standard Del Taco agreement stipulates that all litigation and arbitration must occur in Orange County, California. Franchisees must also sign a general release of claims if they renew or transfer their franchise, but this release cannot waive rights under the franchise investment law or the franchise relations act.