As of September 29, 2024, what total amount has Del Taco accrued for all of its legal matters?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
itional $9.3 million. These amounts are included within "Accrued liabilities" on our consolidated balance sheet as of September 29, 2024. The Company will continue to accrue for post-judgment interest until the matter is resolved.
Torrez — In March 2014, a former Del Taco employee filed a purported Private Attorneys General Act claim and class action alleging various causes of action under California's labor, wage, and hour laws. The plaintiff generally alleges Del Taco did not appropriately provide meal and rest breaks and failed to pay wages and reimburse business expenses to its California non-exempt employees. On November 12, 2021, the court granted, in part, the plaintiff's motion for class certification. The parties participated in a voluntary mediation on May 24, 2022 and June 3, 2022. On June 4, 2022, we entered into a Settlement Memorandum of Understanding (the "Agreement") which obligates the Company to pay a gross settlement amount of $50.0 million, for which in exchange we will be released from all claims by the parties. On August 8, 2023, the court issued its final approval of the settlement and on August 9, 2023 final judgment was entered. The Company made the full payments for the settlement amounts. As of September 29, 2024, the Company has no further amounts accrued on its consolidated balance sheet.
J&D Restaurant Group — On April 17, 2019, the trustee for a bankrupt former franchisee filed a complaint generally alleging the Company wrongfully terminated the franchise agreements and unreasonably denied two perspective purchasers the former franchisee presented. The parties participated in a mediation in April 2021, and again in December 2022, but the matter did not settle. Trial commenced on January 9, 2023. On February 8, 2023, the jury returned a verdict finding the Company had not breached any contracts in terminating the franchise agreements or denying the proposed buyers. However, while the jury also found the Company had not violated the California Unfair Practices Act, it found for the plaintiff on the claim for breach of implied covenant of good faith and fair dealing, and awarded $8.0 million in damages. On May 9, 2023, the court granted the Company's post-trial motion, overturning the jury verdict and ordering the plaintiff take nothing on its claims. As a result,
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 58)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, as of September 29, 2024, Del Taco had no amounts accrued for two specific legal cases, Torrez and J&D Restaurant Group, on its consolidated balance sheet.
The Torrez case involved a former Del Taco employee's class action claim alleging labor, wage, and hour law violations. Del Taco reached a settlement agreement in June 2022, obligating the company to pay $50.0 million. The court granted final approval of the settlement in August 2023, and Del Taco made the full payments.
The J&D Restaurant Group case was initiated in April 2019 by the trustee for a bankrupt former franchisee, alleging wrongful termination of franchise agreements. Although a jury initially awarded $8.0 million in damages to the plaintiff, the court overturned the verdict in May 2023. Consequently, Del Taco reversed the $8.0 million accrual. However, the plaintiff has appealed the trial court's post-trial rulings, meaning this legal matter is ongoing.