In the event of a conflict of laws, which state's laws will prevail for a Del Taco franchise?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchise Agreement, Development Agreement, and Related Agreements:
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- 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.
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- Franchisee Bill of Rights. RCW 19.100.180 may supersede provisions in the Development Agreement or related agreements concerning your relationship with the franchisor, including in the areas of termination and renewal of your franchise. There may also be court decisions that supersede the Development Agreement or related agreements concerning your relationship with the franchisor. Development agreement provisions, including those summarized in Item 17 of the Franchise Disclosure Document, are subject to state law.
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- Site of Arbitration, Mediation, and/or Litigation. In any arbitration or mediation involving a franchise purchased in Washington, the arbitration or mediation site will be either in the state of Washington, or in a place mutually agreed upon at the time of the arbitration or mediation, or as determined by the arbitrator or mediator at the time of arbitration or mediation. In addition, if litigation is not precluded by the Development Agreement, a franchisee may bring an action or proceeding arising out of or in connection with the sale of franchises, or a violation of the Washington Franchise Investment Protection Act, in Washington.
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- General Release. A release or waiver of rights in the Development Agreement or related agreements purporting to bind the franchisee to waive compliance with any provision under the Washington Franchise Investment Protection Act or any rules or orders thereunder is void except when executed pursuant to a negotiated settlement after the agreement is in effect and where the parties are represented by independent counsel, in accordance with RCW 19.100.220(2). In addition, any such release or waiver executed in connection with a renewal or transfer of a franchise is likewise void except as provided for in RCW 19.100.220(2).
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 42–46)
What This Means (2025 FDD)
According to the 2025 Del Taco Franchise Disclosure Document, the governing law in the event of a conflict depends on the state where the franchise is located. Generally, California law applies, but this is subject to applicable state law. For instance, in Washington, the Washington Franchise Investment Protection Act prevails in case of a conflict of laws. Similarly, Rhode Island does not allow franchise agreements to restrict jurisdiction or require the application of another state's laws regarding claims enforceable under their Franchise Investment Act. Indiana also amends the franchise agreement to remove the application of laws from another state.
For a prospective Del Taco franchisee, this means that while the franchise agreement may initially state that California law governs, state-specific laws where the franchise operates can override this. This is particularly relevant in areas such as franchisee rights, non-compete clauses, and dispute resolution. Franchisees should be aware of the specific protections and regulations provided by their state's franchise laws, as these can impact the enforceability of certain provisions in the franchise agreement.
This variation across states is a common practice in franchising, as state laws often aim to protect franchisees within their jurisdiction. It is crucial for potential Del Taco franchisees to consult with a franchise attorney in their state to understand how local laws may modify or supersede the standard franchise agreement. This ensures that franchisees are fully aware of their rights and obligations under both the franchise agreement and state law.