In New York, on what grounds can a Del Taco franchisee terminate the franchise agreement?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
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- The following language replaces the "Summary" section of Item 17(d), titled "Termination by franchisee": You may terminate the agreement on any grounds available by law.
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- The following is added to the end of the "Summary" sections of Item 17(v), titled "Choice of forum", and Item 17(w), titled "Choice of law":
- The foregoing choice of law should not be considered a waiver of any right conferred upon the franchisor or upon the franchisee by Article 33 of the General Business Law of the State of New York.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 42–46)
What This Means (2025 FDD)
According to the 2025 Del Taco Franchise Disclosure Document, a franchisee in New York may terminate the franchise agreement on any grounds available by law. This is specified in an addendum to Item 17(d), titled "Termination by franchisee." This means that New York franchisees are not limited to the termination clauses outlined in the standard franchise agreement and can leverage any legal basis for ending the agreement that exists under New York law.
This provision is favorable to franchisees as it provides them with broader protection and flexibility compared to a standard franchise agreement, which typically restricts termination rights to specific causes. The addendum also states that all rights enjoyed by the franchisee under Article 33 of the General Business Law of the State of New York remain in force. This ensures that the franchisee retains all protections afforded by New York's franchise laws, and that the non-waiver provisions of General Business Law Sections 687(4) and 687(5) are satisfied.
Prospective Del Taco franchisees in New York should consult with a legal professional to fully understand their termination rights and the implications of Article 33 of the General Business Law. This will help them make informed decisions and protect their interests throughout the duration of the franchise agreement. This clause offers significant protection for franchisees operating in New York.