Who determines if a Del Taco franchisee has a permanent disability if Del Taco and the franchisee disagree?

According to Del Taco's 2025 Franchise Disclosure Document, if Del Taco and a franchisee (or their representative) disagree on whether a person has a permanent disability, a licensed practicing physician selected by Del Taco will make the determination. This determination is based on an examination of the person in question.

However, if the person refuses to be examined by the physician selected by Del Taco, they will automatically be deemed permanently disabled for the purposes of the agreement. Del Taco is responsible for covering the cost of the examination.

This clause has significant implications for a Del Taco franchisee. A disagreement over permanent disability could trigger a mandatory transfer of the franchise to a Del Taco-approved third party. The franchisee's control over the business is therefore contingent on this determination. The franchisee bears the risk of being deemed permanently disabled if they refuse the examination, regardless of their actual condition. While Del Taco pays for the examination, the franchisee has no control over the selection of the physician, potentially raising concerns about impartiality.

In the franchise industry, it is not uncommon for franchisors to have provisions addressing disability or death of a franchisee. However, the specific process for determining disability can vary. Some franchise agreements might involve a panel of physicians or an independent medical evaluation to ensure a more neutral assessment. A prospective Del Taco franchisee should carefully consider this clause and perhaps seek legal counsel to understand their rights and obligations in the event of a disability dispute.