Does Del Taco have the right to resolve disputes between a Del Taco franchisee and Ceridian?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
EE AGREES AND ACKNOWLEDGES THAT THE COMPANY'S AND CERIDIAN'S EXERCISE OF ANY RIGHTS CONTAINED IN OR GRANTED BY OR THROUGH THE MSA SHALL NOT BE DEEMED TO CONSTITUTE A BREACH OF THIS AGREEMENT OR OTHERWISE RESULT IN ANY LIABILITY TO THE COMPANY. THE COMPANY SHALL HAVE NO OBLIGATION TO EFFECT OR TO ENDEAVOR TO EFFECT CERIDIAN'S PERFORMANCE RELATING TO OR ARISING FROM THE PLATFORM, AND SHALL HAVE THE RIGHT TO AMEND, REVISE, OR WAIVE ANY RIGHTS OR OBLIGATIONS UNDER, AND TERMINATE THE MSA WITHOUT LIABILITY TO FRANCHISEE.
-
- DISPUTES WITH CERIDIAN. FRANCHISEE SHALL NOT BRING, INITIATE OR OTHERWISE ASSERT ANY CLAIM, ACTION OR DISPUTE AGAINST CERIDIAN, ITS AFFILIATES, OR THEIR RESPECTIVE OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES OR AGENTS ARISING FROM OR RELATING TO THE PLATFORM OR THE PLATFORM USAGE AGREEMENT. DEL TACO SHALL HAVE THE RIGHT, BUT NOT THE OBLIGATION, TO BRING, INITIATE, AND RESOLVE ANY CLAIM, ACTION OR DISPUTE BETWEEN FRANCHISEE AND CERIDIAN OR CERIDIAN'S AFFILIATES AND THEIR RESPECTIVE OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES AND AGENTS ON BEHALF OF FRANCHISEE ARISING FROM OR RELATING TO THE PLATFORM AND THE PROGRAM USAGE AGREEMENT. DEL TACO
MAY BRING, INITIATE AND RESOLVE SUCH CLAIM, ACTION OR DISPUTE IN ITS OWN NAME AND/OR ON BEHALF OF ITSELF AND OTHER DEL TACO FRANCHISEES. DEL TACO SHALL HAVE THE RIGHT TO SETTLE ANY SUCH DISPUTE REQUIRING PAYMENT BY FRANCHISEE OF CONSIDERATION VALUED AT UP TO $10,000.00 WITHOUT FRANCHISEE'S PRIOR WRITTEN CONSENT. AFTER UNDERTAKING TO BRING, DEFEND OR RESOLVE ANY CLAIM, ACTION OR DISPUTE DESCRIBED ABOVE, DEL TACO SHALL HAVE THE RIGHT TO WITHDRAW THEREFROM IMMEDIATELY UPON NOTICE TO FRANCHISEE AND WITHOUT LIABILITY TO FRANCHISEE. FRANCHISEE SHALL INDEMNIFY AND REIMBURSE DEL TACO FOR ALL COSTS AND EXPENSES INCURRED IN CONNECTION WITH THIS SECTION 6, INCLUDING WITHOUT LIMITATION, LEGAL FEES AND COURT COSTS.
Source: Item 23 — RECEIPTS (FDD pages 59–325)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, Del Taco has the right, but not the obligation, to resolve disputes between a franchisee and Ceridian. Specifically, Del Taco can bring, initiate, and resolve any claim, action, or dispute between the franchisee and Ceridian, including their affiliates, officers, directors, shareholders, employees, and agents, arising from the Platform and the Program Usage Agreement. Del Taco may act in its own name or on behalf of itself and other Del Taco franchisees.
Del Taco has the right to settle disputes requiring payment by the franchisee of up to $10,000 without the franchisee's prior written consent. However, Del Taco can withdraw from any claim, action, or dispute after undertaking it, without liability to the franchisee, by providing notice. The franchisee is required to indemnify and reimburse Del Taco for all costs and expenses incurred in connection with these actions, including legal fees and court costs. Del Taco also has the right to select and direct counsel in any such claim, action, or dispute.
The franchisee must cooperate with Del Taco by providing documents, information, and materials, and by allowing Del Taco to interview their officers, directors, shareholders, employees, and agents. Del Taco has no fiduciary obligation to the franchisee and can exercise its business judgment in exercising these rights. This arrangement gives Del Taco significant control over disputes with Ceridian, potentially streamlining the resolution process for franchisees but also requiring them to cede some autonomy and bear the associated costs.