What happens if Del Taco incurs costs in a proceeding involving a Del Taco franchisee where Del Taco is not a party?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
In the event Del Taco incurs any costs or expenses, including legal fees (including attorneys' fees, costs, and expenses (and interest on such fees, costs, and expenses)), travel expenses, and other charges, in connection with any proceeding involving Franchisee in which Del Taco are not a party, Franchisee shall reimburse Del Taco for all such costs and expenses promptly upon presentation of invoices.
Source: Item 22 — CONTRACTS (FDD pages 58–59)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, if Del Taco incurs costs or expenses, including legal fees, travel expenses, and other charges, in connection with any proceeding involving a franchisee in which Del Taco is not a party, the franchisee must reimburse Del Taco for all such costs and expenses. This reimbursement is expected promptly upon presentation of invoices by Del Taco.
This clause means that franchisees could be responsible for covering Del Taco's expenses even in legal situations where Del Taco is not directly involved but is incurring costs due to the franchisee's actions or situation. This could include a wide range of legal issues, making it essential for franchisees to understand their potential liability.
For a prospective Del Taco franchisee, this highlights the importance of operating the franchise in a manner that minimizes legal risks and understanding the scope of their potential financial responsibility for legal costs incurred by Del Taco. Franchisees should maintain adequate insurance coverage and seek legal counsel when necessary to mitigate these risks.