Does Del Taco retain rights not expressly granted to the franchisee in the franchise agreement?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee understands and agrees that Del Taco may operate and change the System in any manner that is not expressly and specifically prohibited by this Agreement.
- 1.3 No Right to Subfranchise.
Franchisee may not subfranchise, sublicense, or relicense to others any right to use the System or the Proprietary Marks.
- 1.4 Goodwill and Del Taco Name.
Except as expressly provided by this Agreement, Franchisee shall acquire no right, title or interest in and to the System.
Any and all goodwill associated with the System shall inure exclusively to Del Taco's benefit; and, upon the expiration or termination of this Agreement for any cause whatsoever, Del Taco shall not have any obligation to pay any money for any goodwill associated with Franchisee's use of the System.
Franchisee shall not take any action whatsoever to contest the validity or ownership of the System or the goodwill associated with the System.
Franchisee shall have no right to use in its entity name (if applicable) the name "Del Taco," "Del" or any other names used by Del Taco.
Source: Item 22 — CONTRACTS (FDD pages 58–59)
What This Means (2025 FDD)
According to the 2025 Del Taco Franchise Disclosure Document, Del Taco retains rights not expressly prohibited in the franchise agreement. Specifically, Del Taco may operate and change the System in any manner that is not expressly and specifically prohibited by the agreement. This means that while the franchisee is granted specific rights to operate a Del Taco Restaurant, Del Taco maintains broad discretion over the overall operation and evolution of the Del Taco system.
Del Taco also retains specific rights regarding data. All data provided by the franchisee, including customer data and transaction data, is owned exclusively by Del Taco. Del Taco licenses the use of this data back to the franchisee solely for the term of the agreement and for use in connection with the franchised business. Del Taco can use this data in any manner it deems appropriate, including providing reports to other franchisees, preparing franchise disclosure documents, and complying with government regulations.
Furthermore, the franchise agreement explicitly states that the franchisee does not have the right to subfranchise, sublicense, or relicense to others any right to use the Del Taco system or proprietary marks. All goodwill associated with the Del Taco system inures exclusively to Del Taco's benefit. Upon expiration or termination of the agreement, Del Taco has no obligation to pay any money for any goodwill associated with the franchisee's use of the system. The franchisee cannot contest the validity or ownership of the system or the goodwill associated with it and cannot use the name "Del Taco" in its entity name.