Can a Del Taco franchisee contest the validity of Del Taco's ownership of the Proprietary Marks?

According to Del Taco's 2025 Franchise Disclosure Document, a franchisee is prohibited from contesting the validity of Del Taco's ownership of its Proprietary Marks. The franchise agreement stipulates that neither the franchisee nor any of their principals can directly or indirectly challenge the validity or Del Taco's ownership of the Proprietary Marks. Furthermore, franchisees are barred from seeking to register the Proprietary Marks with any government agency without Del Taco's express prior written consent. This acknowledgement is a key part of the franchise agreement, reinforcing Del Taco's control over its brand and trademarks.

This provision ensures that Del Taco maintains exclusive control over its brand identity and prevents franchisees from taking actions that could undermine the company's intellectual property rights. The franchisee's use of the Proprietary Marks is strictly a license granted by the agreement, and it does not give the franchisee any ownership interest in the marks themselves. Del Taco retains the right to use the Proprietary Marks, grant licenses to others, and even develop other systems using similar marks without providing any rights to the franchisee.

Should a franchisee violate this provision by contesting the validity of Del Taco's Proprietary Marks, it would constitute a breach of the franchise agreement. According to the FDD, such a breach could lead to termination of the agreement. This underscores the importance of franchisees adhering to the terms of the agreement regarding the use and protection of Del Taco's Proprietary Marks. Prospective franchisees should understand that respecting and protecting Del Taco's trademarks is a fundamental requirement of the franchise relationship.