Which section of the Del Taco Franchise Agreement applies to dispute resolution for this agreement?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
GOVERNING LAW AND DISPUTE RESOLUTION.
The governing law and dispute resolution provisions of the Franchise Agreement (i.e., Section 17 of the Franchise Agreement) shall apply to this Agreement and all disputes and claims relating to or arising under this Agreement and the relationship of the parties hereto and are expressly incorporated herein by reference.
Arbitration.
Except as otherwise provided in this Agreement, any claim, controversy or dispute arising out of or relating to this Agreement, the Restaurant, or the relationship created by this Agreement, including any claim by Developer or its owners, concerning the entry into, the performance under, or the termination of this Agreement, or any other agreement between the parties will be resolved via binding arbitration under the authority of the Federal Arbitration Act in accordance with the following provisions:
- (a) Any arbitration will be administered by the American Arbitration Association (or its successor) pursuant to its then-current commercial arbitration rules and procedures.
The arbitrator will have the authority to decide issues regarding arbitrability and the scope of the arbitrator's jurisdiction.
The arbitration must take place in the county in which our headquarters are located at the time of the dispute (currently Orange County, California).
- (b) Any arbitration must be on an individual basis, and not as part of a common, consolidated, or class action.
Source: Item 23 — RECEIPTS (FDD pages 59–325)
What This Means (2025 FDD)
According to the 2025 Del Taco Franchise Disclosure Document, Section 17 of the Franchise Agreement contains the governing law and dispute resolution provisions. Item 23 clarifies that these provisions apply to all disputes and claims related to the agreement and the relationship between Del Taco and the franchisee.
Specifically, any claims, controversies, or disputes arising from the Franchise Agreement, the restaurant, or the relationship it creates will be resolved through binding arbitration. This arbitration process falls under the authority of the Federal Arbitration Act. The American Arbitration Association (or its successor) will administer the arbitration according to its commercial arbitration rules and procedures in effect at the time of the dispute.
The arbitrator holds the power to make decisions on issues regarding arbitrability and the scope of their jurisdiction. The location for arbitration proceedings must be in the county where Del Taco's headquarters are located at the time of the dispute, which is currently Orange County, California. Furthermore, any arbitration must proceed on an individual basis, meaning class actions or consolidated actions are not permitted.
This means that a Del Taco franchisee must address any legal issues through arbitration in Orange County, California, and cannot participate in a class action lawsuit against the franchisor. Franchisees should carefully review Section 17 of the Franchise Agreement to fully understand the specific procedures and implications of the dispute resolution process.