In the event a provision of the Del Taco agreement is declared unenforceable, what happens to that provision?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
Severability.
All agreements and covenants contained herein are severable.
If any of them, or any part or parts of them, shall be held invalid by any court of competent jurisdiction for any reason, then the Obligee agrees that the court shall have the authority to reform and modify that provision in order that the restriction shall be the maximum necessary to protect Del Taco's and/or Franchisee's legitimate business needs as permitted by applicable law and public policy.
In so doing, the Obligee agrees that the court shall impose the provision with retroactive effect as close as possible to the provision held to be invalid.
Source: Item 23 — RECEIPTS (FDD pages 59–325)
What This Means (2025 FDD)
According to the 2025 Del Taco Franchise Disclosure Document, all agreements and covenants are severable. If any part of the agreement is held invalid by a court, the court has the authority to reform and modify the provision. The modification will ensure the restriction is the maximum necessary to protect Del Taco's and/or the franchisee's legitimate business needs, as permitted by law and public policy.
The court will impose the provision with retroactive effect, making it as close as possible to the original provision that was deemed invalid. This means that the court will attempt to maintain the original intent of the agreement while ensuring it complies with legal requirements.
This clause ensures that the entire agreement does not become invalid due to one unenforceable provision. It also grants the court the power to modify the provision to align with legal standards while still protecting the interests of both Del Taco and the franchisee. This is a common practice in franchise agreements to maintain the integrity of the contract while adapting to legal challenges.