When would a Del Taco franchisee be required to reimburse Del Taco for litigation costs related to the Proprietary Marks?

According to Del Taco's 2025 Franchise Disclosure Document, a franchisee is required to reimburse Del Taco for litigation costs related to the Proprietary Marks if the litigation results from the franchisee's use of the Proprietary Marks in a manner that is inconsistent with the terms of the Franchise Agreement. This reimbursement covers the cost of the litigation, including attorney's fees, and the cost of any judgment or settlement.

This means that if a Del Taco franchisee misuses the brand's trademarks in a way that violates their agreement, and this misuse leads to legal action, the franchisee will be responsible for covering Del Taco's legal expenses. This could include situations where the franchisee uses the trademarks in unauthorized advertising, sells unapproved products under the Del Taco name, or otherwise infringes on Del Taco's intellectual property rights.

This provision protects Del Taco's brand and trademarks by ensuring that franchisees adhere to the terms of their agreement. It also serves as a deterrent against trademark misuse, as franchisees risk incurring significant legal costs if they violate the agreement. Prospective franchisees should carefully review the terms of the Franchise Agreement regarding the use of Proprietary Marks to avoid potential liability for litigation costs.