Does the Del Taco franchise agreement require the franchisee to disclose all ideas related to the restaurant's operation to Del Taco?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
- 10.3 Information Exchange.
Franchisee agrees to disclose to Del Taco all ideas, concepts, methods, techniques and products conceived or developed by Franchisee, its affiliates, owners, agents, or employees during the term of this Agreement relating to the development and/or operation of the Restaurant, and Del Taco shall be the sole owner of any such ideas, concepts, methods, techniques and products, which shall be deemed a work made for hire (or to the extent the work may not be deemed a "work made for hire" under applicable law, Franchisee hereby irrevocably assigns to Del Taco, for no additional consideration, all right, title and interest in and to any patents, trademarks, copyrights, trade secrets and any other proprietary rights), and there are no restrictions on use, and no compensation shall be due to Franchisee.
Franchisee agrees to cooperate fully in obtaining any patents, trademarks or copyrights.
Source: Item 22 — CONTRACTS (FDD pages 58–59)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, franchisees are obligated to disclose any ideas, concepts, methods, techniques, or products they develop related to the restaurant's operation. This requirement extends to ideas conceived by the franchisee, their affiliates, owners, agents, or employees during the term of the franchise agreement.
Del Taco retains sole ownership of these disclosed ideas, which are considered works made for hire. If these creations cannot be legally classified as "works made for hire," the franchisee irrevocably assigns all rights, titles, and interests, including patents, trademarks, copyrights, and trade secrets, to Del Taco without additional compensation. This means that any innovation or improvement a franchisee comes up with during their time with Del Taco automatically becomes the property of the franchisor.
This clause has significant implications for franchisees. While it encourages franchisees to innovate and improve their restaurant's operations, it also means they cannot independently profit from these innovations. Del Taco has unrestricted use of these ideas without owing any compensation to the franchisee. Prospective franchisees should consider this when evaluating the potential benefits and risks of investing in a Del Taco franchise.