Is a Del Taco franchisee allowed to participate in a class action against Del Taco?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
- 17.2 Venue. Subject to the terms and provisions of Section 17.3 below, the parties agree that any action brought by one party against the other in any court, whether federal or state, shall be brought only before a court of competent jurisdiction in Orange County, California. The parties agree that this Section 17.2 shall not be construed as preventing either party from removing an action from state to federal court; provided, however, that venue shall be as set forth above. Franchisee and its owners hereby waive all questions of personal jurisdiction or venue for the purpose of carrying out this provision. Any such action shall be conducted on an individual basis, and not as part of a consolidated, common, or class action, and Franchisee and its owners waive any and all rights to proceed on a consolidated, common, or class basis.
Source: Item 22 — CONTRACTS (FDD pages 58–59)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, franchisees are restricted from participating in class action lawsuits against the company. Specifically, Item 17.2 states that any legal action must be conducted on an individual basis, explicitly preventing franchisees from proceeding on a consolidated, common, or class action basis. This means a franchisee waives their rights to join or initiate a class action against Del Taco.
This waiver has significant implications for prospective franchisees. It limits their legal recourse to individual lawsuits, which can be more expensive and time-consuming than participating in a class action. Class actions allow multiple plaintiffs with similar grievances to pool resources and share the costs of litigation. By waiving this right, franchisees bear the full financial burden of pursuing legal claims against Del Taco.
The FDD also specifies that any action brought by either party must occur in a court of competent jurisdiction in Orange County, California, further emphasizing the individual nature of any legal proceedings. This venue requirement could add additional costs and logistical challenges for franchisees located outside of California.
It is important for potential franchisees to carefully consider this waiver and understand its potential impact on their ability to resolve disputes with Del Taco. They may want to consult with an attorney to fully assess the implications of this clause before signing the franchise agreement. This type of clause is increasingly common in franchise agreements, so prospective franchisees should be aware of it.