What is the extent of the Del Taco franchisee's obligation to indemnify Del Taco?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
a result of, any such action; nor shall Del Taco be liable by reason of any act or omission by Franchisee in Franchisee's conduct of the Restaurant or for any claim or judgment arising therefrom against Franchisee or Del Taco. Franchisee shall not have the authority, express or implied, to bind or obligate Del Taco in any way.
- 16.1.3 Indemnification. Franchisee shall, to the fullest extent permissible under applicable law, indemnify and hold Del Taco and its affiliates, and each of Del Taco's respective officers, directors, employees, and agents harmless against any and all claims, obligations, and damages arising directly or indirectly from, as a result of, or in connection with this Agreement, the Restaurant, Franchisee's operation of the Restaurant, Franchisee and its employees' actions and inaction, or Franchisee's breach of this Agreement, including those alleged to be caused by Del Taco's negligence, as well as the costs, including attorneys' fees, costs, and expenses (and interest on such fees, costs, and expenses), of defending against them, unless (and then only to the extent that) the claims, obligations, and damages are determined to be caused solely by Del Taco's gross negligence or willful misconduct according to a final, unappealable ruling issued by a court or arbitrator with competent jurisdiction.
Source: Item 22 — CONTRACTS (FDD pages 58–59)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, the franchisee has a significant obligation to indemnify Del Taco. The franchisee must indemnify and hold Del Taco, its affiliates, officers, directors, employees, and agents harmless against claims, obligations, and damages. This indemnification extends to issues arising directly or indirectly from the franchise agreement, the restaurant's operation, the franchisee's actions or inactions, or any breach of the agreement. This includes covering costs such as attorneys' fees, costs, and expenses related to defending against such claims.
However, there is an exception to this broad indemnification. The franchisee is not required to indemnify Del Taco to the extent that claims, obligations, and damages are determined to be caused solely by Del Taco's gross negligence or willful misconduct. This determination must be made by a final, unappealable ruling from a competent court or arbitrator.
Furthermore, the document states that the undersigned (likely referring to the franchisee or guarantors) jointly and severally agree to defend, indemnify, and hold Del Taco harmless from losses, damages, liabilities, costs, and expenses, including attorney's fees, resulting from the franchisee's failure to perform obligations under the franchise agreement or related agreements. This highlights the importance of fulfilling all contractual obligations to avoid potential liabilities. This guarantee remains in effect even after the termination or expiration of the agreement for obligations arising before the termination date and covenants that continue beyond the agreement's term.