Does the Del Taco franchise agreement specify that a failure to comply with confidentiality requirements will cause irreparable injury to Del Taco?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
all, among other things, designate Del Taco as a third party beneficiary of such covenants with the independent right to enforce them. Notwithstanding any other provision of this Agreement, there may be certain, limited circumstances where applicable law allows for the disclosure of certain trade secrets, as specified in the Manuals.
- 10.2 Irreparable Injury. Franchisee acknowledges that any failure to comply with the requirements of this Section 10 will cause Del Taco irreparable injury, and Franchisee agrees to pay all court costs and reasonable attorney's fees incurred by Del Taco in obtaining specific performance of, or an injunction against violation of, the requirements of this Section 10.
- 10.3 Information Exchange.
Source: Item 22 — CONTRACTS (FDD pages 58–59)
What This Means (2025 FDD)
According to the 2025 Del Taco Franchise Disclosure Document, the franchise agreement explicitly states that failure to comply with confidentiality requirements will cause irreparable injury to Del Taco. Specifically, Section 10.2 of the agreement, titled "Irreparable Injury," confirms this acknowledgment by the franchisee. This means that Del Taco believes unauthorized disclosure or use of confidential information would cause damage that is difficult to quantify and cannot be adequately compensated with monetary damages alone.
This acknowledgment has significant implications for a prospective Del Taco franchisee. It allows Del Taco to seek injunctive relief, meaning a court order to immediately stop the franchisee from further violating the confidentiality terms. Additionally, the franchisee agrees to cover all court costs and reasonable attorney's fees incurred by Del Taco in pursuing such legal action. This can create a substantial financial risk for franchisees who breach confidentiality, as they could be liable for significant legal expenses in addition to potential damages.
Furthermore, Section 10.12 reinforces this point, stating that a franchisee's violation of Section 10 would result in irreparable injury to Del Taco, for which no adequate remedy at law may be available. Consequently, the franchisee consents to an injunction prohibiting any conduct violating the terms of Section 10. This clause underscores the importance Del Taco places on protecting its confidential information and trade secrets, and it provides Del Taco with strong legal recourse in the event of a breach. Franchisees should be aware of these stipulations and take appropriate measures to safeguard confidential information to avoid potential legal and financial repercussions.