Does the Del Taco FDD disclose any pending litigation against Different Rules, LLC?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
AJP Enterprises, LLC and NHG Enterprises, LLC v. Jack in the Box Inc., Different Rules, LLC and Jack in the Box Properties LLC (Washington Superior Court for King County, Case No. 25-2-09695-5 KNT). On March 27, 2025, AJP Enterprises, LLC ("AJP") and NHG Enterprises, LLC ("NHG") filed a complaint against Jack in the Box Franchisor, JIB, and JIB Properties. In September 2024, AJP and NHG closed 8 Jack in the Box Restaurants without Jack in the Box Franchisor's consent. Subsequently, based upon that unilateral closure, by notice, Jack in the Box Franchisor terminated the franchise agreement for the closed Restaurants and exercised its contractual right to cross default 39 other franchise agreements with AJP and NHG. The complaint alleges claims for violation of the Washington Franchise Investment Protection Act, violation of the Washington Consumer Protection Act, breach of implied covenant of good faith and fair dealing, and economic duress. AJP and NHG generally allege that Jack in the Box Franchisor did not have good cause to terminate, Jack in the Box Franchisor did not provide the statutorily required notice, Jack in the Box Franchisor acted in bad faith in connection with requests to close the Restaurants, and Jack in the Box Franchisor is using its contractual rights to exert economic duress on the franchisee. The complaint seeks declaratory and injunctive relief, damages in an unspecified amount, attorneys' fees. This case is in the initial pleading stages.
Source: Item 3 — LITIGATION (FDD pages 12–16)
What This Means (2025 FDD)
According to the 2025 Del Taco Franchise Disclosure Document, there is one pending litigation case involving Different Rules, LLC. AJP Enterprises, LLC and NHG Enterprises, LLC filed a complaint on March 27, 2025, against Jack in the Box Franchisor, JIB, and JIB Properties, which includes Different Rules, LLC. The case, filed in the Washington Superior Court for King County (Case No. 25-2-09695-5 KNT), alleges violations of the Washington Franchise Investment Protection Act, the Washington Consumer Protection Act, breach of implied covenant of good faith and fair dealing, and economic duress.
The complaint stems from AJP and NHG closing 8 Jack in the Box Restaurants in September 2024 without the franchisor's consent, leading Jack in the Box Franchisor to terminate the franchise agreement for those restaurants and exercise its contractual right to cross default 39 other franchise agreements with AJP and NHG. AJP and NHG claim that Jack in the Box Franchisor did not have good cause to terminate, failed to provide the statutorily required notice, acted in bad faith regarding requests to close the Restaurants, and is using its contractual rights to exert economic duress on the franchisee.
The plaintiffs are seeking declaratory and injunctive relief, damages in an unspecified amount, and attorneys' fees. As of the FDD's publication, the case is in the initial pleading stages. This lawsuit is relevant to prospective Del Taco franchisees because Different Rules, LLC is affiliated with Jack in the Box, the parent company of Del Taco. Any legal issues involving Different Rules, LLC could potentially affect the financial stability or business practices of the broader organization, including Del Taco.