Where must all litigation and arbitration take place related to the Del Taco franchise?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in the Agreement | Summary |
|---|---|---|
| v. Choice of forum | 17.2 and 17.3 | All litigation and arbitration must take place in Orange County, California, subject to applicable state law. See Exhibit F. |
| w. Choice of law | 17.1 and 17.3 | California law applies, subject to applicable state law. See Exhibit F. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 42–46)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, unless otherwise specified by state law, all litigation and arbitration involving Del Taco franchises must occur in Orange County, California. This is stated in Item 17, under the 'Choice of forum' provision. This requirement is subject to applicable state laws, as noted in the FDD. Specifically, for franchisees operating in Indiana, the provision concerning the location of arbitration is deleted from the franchise agreement, meaning that disputes would not necessarily be resolved in California. Similarly, for franchisees in Washington, the arbitration or mediation site will be either in the state of Washington, or in a place mutually agreed upon at the time of the arbitration or mediation, or as determined by the arbitrator or mediator at the time of arbitration or mediation.
This forum selection clause means that a Del Taco franchisee may be required to travel to California to resolve disputes with the company, which could significantly increase the cost of resolving any legal issues. The franchisee will likely incur travel expenses, and may need to hire California-based legal counsel, which could be more expensive than local representation.
However, the FDD also includes addenda for certain states like Indiana and Washington that modify this requirement. For instance, the Indiana addendum removes the provision that arbitration must occur out-of-state. The Washington addendum stipulates that arbitration or mediation involving a franchise purchased in Washington will occur in Washington or a mutually agreed-upon location. Therefore, prospective franchisees should carefully review any state-specific addenda to understand how these provisions may be modified in their specific circumstances.
It is important for prospective franchisees to consult with a legal professional to understand the full implications of these dispute resolution provisions, including the choice of forum and choice of law, and how they may be affected by state-specific laws or addenda.