What rights does Del Taco have regarding fees owed by the franchisee to Ceridian?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
NLY THROUGH AND FOR THE OPERATION OF THE RESTAURANT.
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- COMPLIANCE WITH THIS AGREEMENT, FRANCHISE AGREEMENT AND PLATFORM USAGE AGREEMENT. FRANCHISEE SHALL AT ALL TIMES COMPLY WITH THIS AGREEMENT, THE FRANCHISE AGREEMENT, THE PLATFORM USAGE AGREEMENT AND ALL RULES, REGULATIONS, STANDARDS, SPECIFICATIONS AND PROCEDURES DESIGNATED FROM TIME TO TIME BY CERIDIAN IN CONNECTION WITH FRANCHISEE'S USE OF THE PLATFORM, INCLUDING WITHOUT LIMITATION THE CERIDIAN TIME CLOCK AND ALL APPLICATIONS. IN THE EVENT OF A CONFLICT BETWEEN THIS AGREEMENT OR THE FRANCHISE AGREEMENT AND THE PLATFORM USAGE AGREEMENT OR CERIDIAN'S RULES, REGULATIONS, STANDARDS, SPECIFICATIONS OR PROCEDURES WITH RESPECT TO THE PLATFORM, THIS AGREEMENT AND THE FRANCHISE AGREEMENT SHALL CONTROL.
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- DEL TACO PERFORMANCE. Del Taco shall have the right, but not the obligation, to (1) collect any and all fees owing from Franchisee to Ceridian, for transmittal to Ceridian or its designees on behalf of Franchisee, and (2) communicate with Ceridian on behalf of Franchisee regarding the Platform and the Program Usage Agreement. With respect to Section 3.(2) above, Del Taco shall have the right to designate an individual or entity, which may be an employee of Del Taco, to serve as an administrator of the Platform on behalf of Franchisee and/or other franchisees of Del Taco. The administrator shall have such access to Franchisee's computer system, including without limitation all files and data regarding Franchisee's use of the Platform as the administrator deems necessary to perform the functions thereof. Del Taco shall have no fiduciary obligation to Franchisee and shall have the right to exercise its business judgement, as further described in Section 13 below, regarding the exercise of its rights described in this Section.
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- FRANCHISEE PERFORMANCE. Franchisee shall pay such fees to Del Taco in such manner as Del Taco may prescribe, and purchase, lease or otherwise acquire the right to use such equipment, hardware, software and services as Del Taco may prescribe from time to time in order to use the Platform. Franchisee acknowledges and agrees that, as of the Effective Date, such fees include, without limitation, the following:
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 specific rights regarding fees owed by the franchisee to Ceridian, primarily related to the Platform usage. Del Taco has the right, but not the obligation, to collect any and all fees owed from the franchisee to Ceridian for transmitting those fees to Ceridian on behalf of the franchisee. Del Taco can also communicate with Ceridian on behalf of the franchisee regarding the Platform and the Program Usage Agreement.
Furthermore, the FDD stipulates that franchisees are not allowed to bring any claims, actions, or disputes against Ceridian or its affiliates related to the Platform or the Platform Usage Agreement. Instead, Del Taco retains the right, but not the obligation, to bring, initiate, and resolve any claim, action, or dispute between the franchisee and Ceridian on behalf of the franchisee. Del Taco can handle these disputes in its own name or on behalf of itself and other Del Taco franchisees.
Del Taco also has the right to settle any dispute requiring payment by the franchisee of consideration valued at up to $10,000 without the franchisee's prior written consent. However, Del Taco can withdraw from any such claim, action, or dispute upon notice to the franchisee without liability. The franchisee is required to indemnify and reimburse Del Taco for all costs and expenses incurred in connection with these disputes, including legal fees and court costs. Del Taco has the right to select counsel and direct counsel in any claim, action, or dispute and make all other related decisions as it deems appropriate. Del Taco has no fiduciary obligation to the franchisee and can exercise its business judgment regarding these rights.
These stipulations mean that Del Taco franchisees are dependent on Del Taco to resolve any disputes with Ceridian. Franchisees are obligated to pay fees as prescribed by Del Taco and do not have direct recourse against Ceridian for issues related to the Platform. This arrangement centralizes control with Del Taco, potentially streamlining dispute resolution but also placing franchisees in a position where their concerns are mediated by the franchisor.