What costs is a Del Taco franchisee required to reimburse Del Taco for in legal proceedings?

According to Del Taco's 2025 Franchise Disclosure Document, a franchisee may be required to reimburse Del Taco for costs incurred in legal proceedings under certain circumstances. Specifically, if Del Taco incurs costs or expenses, including legal fees, travel expenses, and other charges, in connection with any proceeding involving the franchisee in which Del Taco is not a party, the franchisee must promptly reimburse Del Taco for all such costs and expenses upon presentation of invoices. This includes attorneys' fees, costs, and expenses, as well as interest on such fees, costs, and expenses.

This means that if a Del Taco franchisee is involved in a lawsuit or legal proceeding that does not directly involve Del Taco, but Del Taco incurs expenses as a result of the proceeding, the franchisee is responsible for covering those costs. These costs can include legal representation, travel for Del Taco personnel, and any other related charges. The franchisee is obligated to pay these expenses promptly after receiving invoices from Del Taco.

This provision protects Del Taco from incurring expenses due to legal issues involving its franchisees, ensuring that the franchisee bears the financial responsibility for such matters. It is important for prospective franchisees to understand this obligation, as it can potentially lead to significant financial burdens depending on the nature and extent of the legal proceedings. Franchisees should factor this potential cost into their financial planning and consider obtaining appropriate insurance coverage to mitigate this risk.