In the event of a conflict of laws regarding the Del Taco franchise agreement, which law prevails?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
-
- Conflict of Laws. In the event of a conflict of laws, the provisions of the Washington Franchise Investment Protection Act, chapter 19.100 RCW will prevail.
Item 17 of the Disclosure Document, Sections (u), (v), and (w), is amended to omit any reference to selection of an out-of-Indiana forum or choice of law.
§ 19-28.1-14 of the Rhode Island Franchise Investment Act provides that "A provision in a franchise agreement and development agreement restricting jurisdiction or venue to a forum outside this state or requiring the application of the laws of another state is void with respect to a claim otherwise enforceable under the Act."
| Provision | Section in the Agreement | Summary |
|---|---|---|
| w. Choice of law | 17.1 and 17.3 | California law applies, subject to applicable state law. See Exhibit F. |
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, the franchise agreement generally defaults to California law. However, this is subject to applicable state law, meaning that if there is a conflict between California law and the law of the state where the franchise is located, the state law will prevail. This is explicitly stated in the main body of Item 17.
Several states have specific addenda that address this issue. For example, the Washington addendum states that the provisions of the Washington Franchise Investment Protection Act will prevail in the event of a conflict of laws. Similarly, the Indiana addendum specifies that provisions requiring the application of laws from another state are deleted from the Indiana Franchise and Development Agreements. Rhode Island also stipulates that any provision restricting jurisdiction or requiring the application of another state's laws is void with respect to claims enforceable under their Franchise Investment Act.
These stipulations are important for prospective franchisees as they clarify that while Del Taco's standard agreement specifies California law, state-specific franchise laws take precedence. This ensures that franchisees are protected by the laws of their own state, particularly concerning matters such as termination, renewal, and dispute resolution. Franchisees should carefully review the addenda for their specific state to understand their rights and obligations under the franchise agreement.