Who has the right to direct and control litigation involving the Proprietary Marks for Del Taco?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
nic medium (including e-mail addresses, account names in a social media site, and the like) of Franchisee or the Restaurant in any forum or medium.
- 8.2.8 Franchisee shall execute any documents deemed necessary by Del Taco to obtain protection for the Proprietary Marks or to maintain their continued validity and enforceability.
- 8.2.9 With respect to litigation involving the Proprietary Marks, the parties agree that:
- 8.2.9.1 Franchisee shall promptly notify Del Taco of any suspected infringement of the Proprietary Marks, any known challenge to the validity of the Proprietary Marks, or any known challenge to Del Taco's ownership of, or Franchisee's right to use, the Proprietary Marks licensed hereunder. Franchisee acknowledges that Del Taco shall have the right to direct and control any administrative proceeding or litigation involving the Proprietary Marks, including any settlement thereof. Del Taco shall also have the right, but not the obligation, to take action against uses by others that may constitute infringement of the Proprietary Marks.
- 8.2.9.2 Except to the extent that any litigation involving the Proprietary Marks is the result of Franchisee's use of the Proprietary Marks in a manner inconsistent with the terms of this Agreement or involving any other claim against Del Taco, Del Taco agrees to reimburse Franchisee for its out of pocket litigation costs in doing such acts and things, except that Franchisee shall bear the salary costs of its employees, and Del Taco shall bear the costs of any judgment or settlement but only if the claim on which the judgment or settlement is made is only related to the validity or ownership of the mark. To the extent that such litigation is the result of Franchisee's use of the Proprietary Marks in a manner inconsistent with the terms of this Agreement, Franchisee shall reimburse Del Taco for the cost of such litigation (or, upon Del Taco's written request, pay Del Taco's legal fees directly), including attorney's fees, as well as the cost of any judgment or settlement.
Source: Item 22 — CONTRACTS (FDD pages 58–59)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, Del Taco retains the right to direct and control any administrative proceeding or litigation involving its Proprietary Marks, including any settlement decisions. This means that while a franchisee must promptly inform Del Taco of any suspected infringement or challenges to the Proprietary Marks, Del Taco ultimately decides how to handle these legal matters.
This control extends to taking action against others who may be infringing on Del Taco's Proprietary Marks, although Del Taco is not obligated to do so. The FDD outlines that franchisees may be required to execute documents and perform actions necessary for the defense or prosecution of litigation related to the Proprietary Marks, potentially including becoming a nominal party in legal actions.
The franchisee may be responsible for litigation costs if the litigation arises from the franchisee's inconsistent use of the Proprietary Marks, as defined in the franchise agreement. Conversely, Del Taco may reimburse the franchisee's out-of-pocket litigation costs if the litigation is not due to the franchisee's misuse of the marks, except for employee salary costs. Del Taco will bear the costs of any judgment or settlement only if the claim relates to the validity or ownership of the mark. This allocation of control and costs is typical in franchising, as the franchisor needs to protect its brand and system standards, but franchisees should be aware of their potential financial responsibilities in cases of misuse.