Does the Del Taco franchise agreement limit or review Del Taco's right or discretion?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee understands and agrees that Del Taco may exercise any rights and authority described herein, including, without limitation those described in Sections 3 and 6 hereof, in any manner that is not expressly and specifically prohibited by this Agreement.
Whenever Del Taco has expressly reserved in this Agreement or is deemed to have a right and/or discretion to take or withhold an action, or to grant or decline to grant Franchisee a right to take or withhold an action, except as otherwise expressly and specifically provided in this Agreement, Del Taco may make such decision or exercise its right and/or discretion on the basis of its judgment of what is in Del Taco's best interests, including Del Taco's judgment of what is in the best interests of the franchise network, at the time Del Taco's decision is made or Del Taco's right or discretion is exercised, without regard to whether: (1) other reasonable alternative decisions or actions, or even arguably preferable alternative decisions or actions, could have been made by Del Taco; (2) Del Taco's decision or the action taken promotes Del Taco's financial or other individual interest; (3) Del Taco's decision or the action it takes applies differently to Franchisee and one or more other franchisees or Del Taco company-owned or affiliate-owned operations; or (4) Del Taco's decision or the exercise of its right or discretion is adverse to Franchisee's interests.
In the absence of an applicable statute, Del Taco will have no liability to Franchisee for any such decision or action.
Del Taco and Franchisee intend that the exercise of Del Taco's right or discretion will not be subject to limitation or review.
If applicable law implies a covenant of good faith and fair dealing in this Agreement, Del Taco and Franchisee agree that such covenant shall not imply any rights or obligations that are inconsistent with the express wording of the terms of this Agreement and that this Agreement grants Del Taco the right to make decisions, take actions and/or refrain from taking actions not inconsistent with Franchisee's rights and obligations hereunder.
Source: Item 23 — RECEIPTS (FDD pages 59–325)
What This Means (2025 FDD)
According to the 2025 Del Taco Franchise Disclosure Document, Del Taco and the franchisee agree that Del Taco's exercise of its rights or discretion will not be subject to limitation or review. Del Taco may exercise any rights and authority in any manner that is not expressly and specifically prohibited by the agreement.
Del Taco may make decisions or exercise its rights based on its judgment of what is in Del Taco's best interests, including the best interests of the franchise network. This can be done without regard to whether other reasonable alternative decisions or actions could have been made, whether Del Taco's decision promotes its financial or other individual interest, whether Del Taco's decision applies differently to the franchisee and other franchisees or Del Taco company-owned operations, or whether Del Taco's decision is adverse to the franchisee's interests.
In the absence of an applicable statute, Del Taco will have no liability to the franchisee for any such decision or action. If applicable law implies a covenant of good faith and fair dealing in the agreement, Del Taco and the franchisee agree that such covenant shall not imply any rights or obligations that are inconsistent with the express wording of the terms of the agreement and that this agreement grants Del Taco the right to make decisions, take actions and/or refrain from taking actions not inconsistent with franchisee's rights and obligations hereunder.
This means that as a Del Taco franchisee, you have very limited recourse to challenge Del Taco's decisions, even if those decisions seem unfair or negatively impact your business. It is important to carefully consider this aspect of the franchise agreement before investing in a Del Taco franchise.