factual

In Michigan, can Del Taco require arbitration or litigation to be conducted outside of the state?

Del_Taco Franchise · 2025 FDD

Answer from 2025 FDD Document

Provision Section in the Agreement Summary
n. Our right of first refusal to acquire your business 12.6 We have an option for 30 days to purchase upon same terms and conditions offered to the third party.
o. Our option to purchase your business 12.6 We have an option to purchase your business upon the termination or expiration of your Franchise Agreement.
p. Your death or disability 12.7 and 12.8 We will not withhold consent unreasonably to a transfer to a third party within 6 months, provided the transferee meets our general conditions of transfer.
q. Non-competition covenants during the term of the franchise 10.5 You cannot use the Del Taco System or any other names, marks, systems, logotypes, symbols or foodstuffs provided by us or an approved supplier in connection with another Restaurant; you cannot operate any “competitive business”, which means a Restaurant or food service business that offers one or more Mexican or similar style menu items, and is operated in a quick service, fast food, or fast casual format. (subject to state law)
r. Non-competition 10.6 For a period of two years, you cannot operate a
covenants after the competitive business within two miles of your
franchise terminates or original location or any other existing Del Taco
expires Restaurant. (subject to state law)
s. Modification of the 23 No changes can take place unless mutually agreed
agreement to in writing.
t. Integration/ merger clause 23 Only the written terms of the agreement and exhibits bind the parties. Notwithstanding the foregoing, nothing in this or any related agreement is intended to disclaim the express representations made in the Franchise Disclosure Document, its exhibits and amendments. Any representations or promises outside of the Franchise Disclosure Document and other agreements may not be enforceable. (subject to state law)
u. Dispute resolution by arbitration or mediation 17 The parties must arbitrate any controversy or claim, except that either party may file for preliminary injunctive relief, a restraining order, or order of specific performance, including, without limitation, injunctive relief pertaining to the use of the Del Taco System and Marks.
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.

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 42–46)

What This Means (2025 FDD)

Based on the 2025 Del Taco Franchise Disclosure Document, the franchise agreement generally stipulates that all litigation and arbitration must occur in Orange County, California. However, this is subject to applicable state law, meaning that specific state regulations can override this clause.

Unfortunately, the provided excerpts from the FDD do not contain specific modifications or exceptions pertaining to Michigan. The document includes specific amendments for states like Indiana, Rhode Island, North Dakota, and Virginia, addressing issues such as non-compete agreements, forum selection, choice of law, and waivers, but Michigan is not mentioned in these amendments.

Therefore, a prospective Del Taco franchisee in Michigan should consult with the franchisor or legal counsel to determine whether Michigan law alters the standard requirement for dispute resolution to occur in California. It is essential to understand how Michigan's franchise laws might affect the enforceability of the forum selection clause in the franchise agreement.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.