As a Del Taco franchisee, am I required to sign a 'Non-Disclosure and Non-Competition Agreement'?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
10.1 Confidential Information. Franchisee shall not, during the term of this Agreement or thereafter, communicate, divulge, or use for the benefit of any other person, persons, partnership, entity, association, or corporation any confidential information, trade secrets, knowledge, or know-how concerning the methods of operation of the business franchised hereunder which may be communicated to Franchisee or of which Franchisee may be apprised by virtue of Franchisee's operation under the terms of
this Agreement (the "Confidential Information"). Franchisee shall divulge such Confidential Information only to such of its employees as must have access to it in order to operate the Restaurant. Any and all information, knowledge, know-how, and techniques which Del Taco designates as confidential shall be deemed confidential for purposes of this Agreement, except information which Franchisee can demonstrate came to its attention prior to disclosure thereof by Del Taco; or which, at or after the time of disclosure by Del Taco to Franchisee, had become or later becomes a part of the public domain, through publication or communication by others. Any employee who may have access to any Confidential Information regarding the Restaurant shall execute a covenant that s/he will maintain the confidentiality of information they receive in connection with their association with Franchisee. Such covenants shall be on a form provided by Del Taco, which form shall, 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.
Source: Item 22 — CONTRACTS (FDD pages 58–59)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, as a franchisee, you are bound by confidentiality and non-compete covenants during the term of the Franchise Agreement and even after its termination. Specifically, you must not disclose or use any confidential information, trade secrets, knowledge, or know-how related to Del Taco's business operations for the benefit of any other entity. This includes information communicated to you or learned through your operation as a Del Taco franchisee.
You are permitted to share confidential information only with employees who need access to it for restaurant operations. These employees must also sign a confidentiality agreement, using a form provided by Del Taco, which designates Del Taco as a third-party beneficiary with the right to enforce the agreement. The FDD does note that there may be limited circumstances where applicable law allows for the disclosure of certain trade secrets, as specified in the manuals.
The Franchise Agreement states that any failure to comply with these confidentiality requirements will cause irreparable injury to Del Taco. In such cases, you agree to cover all court costs and reasonable attorney's fees incurred by Del Taco in enforcing these provisions through specific performance or injunctions. This highlights the importance Del Taco places on protecting its confidential information and trade secrets, and the potential legal and financial consequences for franchisees who violate these covenants.