If Del Taco transfers the Franchise Agreement, who becomes responsible for Del Taco's obligations?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
Del Taco has the right to transfer or assign this Agreement, the System, Confidential Information, and all or any part of Del Taco's rights or obligations under this Agreement or Del Taco's interest in the System and Confidential Information to any person or legal entity without Franchisee's consent.
Any transferee or assignee of this Agreement from Del Taco will become solely responsible for all of Del Taco's obligations under this Agreement from the date of the transfer or assignment.
Without limiting the foregoing, Del Taco may sell its assets (including its rights in the Proprietary Marks and the System) to a third party; may offer its securities privately or publicly; may merge with or acquire other legal entities, or be acquired by another legal entity; and may undertake a refinancing, recapitalization, leveraged buyout, or other economic or financial restructuring.
With regard to any or all of the above transfers, sales, assignments, and dispositions, Franchisee waives any claims, demands, or damages against Del Taco or its affiliates arising from or related to Del Taco's transfer of its rights in this Agreement, the System, or Confidential Information to any other party.
Nothing contained in this Agreement will require Del Taco to remain in the business of operating or licensing the operation of Del Taco Restaurants or other businesses or to offer any services or products to Franchisee, whether or not bearing the Proprietary Marks, if Del Taco transfers or assigns its rights in or obligations under this Agreement and the System.
Source: Item 22 — CONTRACTS (FDD pages 58–59)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, Del Taco has the right to transfer the Franchise Agreement to another entity without the franchisee's consent. If Del Taco does transfer the agreement, the new entity or person to whom the agreement is transferred becomes solely responsible for all of Del Taco's obligations under the agreement from the date of the transfer or assignment.
This means that if a franchisee has any issues or disputes with Del Taco, and Del Taco subsequently transfers the agreement, the franchisee will need to address those issues with the new entity. It is important for prospective franchisees to understand that Del Taco can transfer its obligations to another party without their consent, and the franchisee will have to work with that new party.
Del Taco may undertake actions such as selling its assets, offering securities, merging with or acquiring other entities, or undergoing financial restructuring. The franchisee waives any claims against Del Taco or its affiliates related to Del Taco's transfer of rights in the agreement, system, or confidential information to another party. Del Taco is not required to remain in the business of operating or licensing Del Taco Restaurants or to offer any services or products to the franchisee if it transfers its rights or obligations under the agreement.