Does the Del Taco franchisee's indemnification obligation extend to claims caused by Del Taco's negligence?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall, to the fullest extent permissible under applicable law, indemnify and hold Del Taco and its affiliates, and each of Del Taco's respective officers, directors, employees, and agents harmless against any and all claims, obligations, and damages arising directly or indirectly from, as a result of, or in connection with this Agreement, the Restaurant, Franchisee's operation of the Restaurant, Franchisee and its employees' actions and inaction, or Franchisee's breach of this Agreement, including those alleged to be caused by Del Taco's negligence, as well as the costs, including attorneys' fees, costs, and expenses (and interest on such fees, costs, and expenses), of defending against them, unless (and then only to the extent that) the claims, obligations, and damages are determined to be caused solely by Del Taco's gross negligence or willful misconduct according to a final, unappealable ruling issued by a court or arbitrator with competent jurisdiction.
Source: Item 22 — CONTRACTS (FDD pages 58–59)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, the franchisee's indemnification obligations do extend to claims allegedly caused by Del Taco's negligence. Specifically, the franchisee must indemnify Del Taco and its affiliates, officers, directors, employees, and agents against claims and damages arising from the franchise agreement, the restaurant's operation, the franchisee's actions or inactions, or the franchisee's breach of the agreement.
However, this indemnification obligation has a significant exception. The franchisee is not required to indemnify Del Taco to the extent that claims, obligations, and damages are determined to be caused solely by Del Taco's gross negligence or willful misconduct. This determination must be made by a final, unappealable ruling from a court or arbitrator with competent jurisdiction.
In practical terms, this means a Del Taco franchisee could be responsible for legal costs and damages even if Del Taco was partly at fault. Only if Del Taco's actions rise to the level of gross negligence or willful misconduct, and this is definitively proven in court or arbitration, would the franchisee be relieved of the indemnification duty. This type of clause is relatively common in franchise agreements, but franchisees should be aware of the potential financial exposure it creates.