Does the Del Taco franchise agreement create a principal and agent relationship between Del Taco and the Developer?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
This Agreement does not in any way create the relationship of principal and agent between Del Taco and the Developer.
The Developer shall not act or attempt to act or represent itself, directly or by implication, as an agent of Del Taco or in any manner assume or create or attempt to assume or create any obligation on behalf of or in the name of Del Taco nor shall the Developer act or represent itself as an affiliate of any other authorized franchisee of Del Taco.
The Developer shall represent and conduct itself as an independent contractor of Del Taco.
The Developer shall not have the authority, express or implied, to bind or obligate Del Taco in any way.
Source: Item 23 — RECEIPTS (FDD pages 59–325)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, the Development Agreement explicitly states that it does not create a principal and agent relationship between Del Taco and the Developer. The agreement emphasizes the Developer's role as an independent contractor, clarifying that the Developer cannot act or represent themselves as an agent of Del Taco.
This distinction is crucial because it means the Developer does not have the authority to bind or obligate Del Taco in any way. The Developer must represent and conduct its business as an independent entity, and cannot act as an affiliate of any other authorized Del Taco franchisee. This ensures that the Developer operates autonomously and is responsible for its own actions and obligations.
This clause protects Del Taco from potential liabilities arising from the Developer's actions. It also reinforces the independent nature of the Developer's business, highlighting that the Developer is responsible for its own business decisions and operations. Prospective developers should understand this independent contractor status, as it defines the scope of their authority and responsibilities within the Del Taco franchise system.