Does the Del Taco franchisee's obligation to indemnify Del Taco survive the termination or expiration of the franchise agreement?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
All provisions of this Agreement which, by their terms or intent, are designed to survive the expiration or termination of this Agreement, shall so survive the expiration and/or termination of this Agreement.
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 obligation to indemnify Del Taco can survive the termination or expiration of the franchise agreement. Specifically, the franchisee must, to the fullest extent permissible under applicable law, indemnify and hold Del Taco and its affiliates harmless against any and all claims, obligations, and damages arising directly or indirectly from the franchise agreement, the restaurant, the franchisee's operation, actions, inactions, or breach of the agreement. This includes costs, attorney's fees, and expenses related to defending against such claims.
However, this indemnification is not absolute. The franchisee is not responsible for claims, obligations, and damages determined to be caused solely by Del Taco's gross negligence or willful misconduct, as decided by a final, unappealable ruling from a competent court or arbitrator. This means that while the franchisee bears significant responsibility for liabilities connected to their operation, Del Taco remains accountable for its own serious misconduct.
Furthermore, the general provisions of the Del Taco franchise agreement state that all provisions within the agreement that are designed to survive expiration or termination will remain in effect after the agreement ends. This reinforces the idea that the indemnification clause, among other obligations, can extend beyond the term of the franchise agreement, ensuring Del Taco's protection against potential liabilities even after the franchise relationship concludes.