Under what circumstances is the arbitrator prohibited from acting in a Del Taco arbitration?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
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)
Based on the 2025 Del Taco Franchise Disclosure Document, the circumstances under which an arbitrator is prohibited from acting in a dispute are not explicitly detailed. However, the document does outline the general arbitration process. Any claim, controversy, or dispute arising out of or relating to the Franchise Agreement, the restaurant, or the relationship created by the agreement will be resolved via binding arbitration under the Federal Arbitration Act. The American Arbitration Association (or its successor) will administer the arbitration pursuant to its then-current commercial arbitration rules and procedures. The arbitrator has the authority to decide issues regarding arbitrability and the scope of the arbitrator's jurisdiction. The arbitration must occur in the county where Del Taco's headquarters are located at the time of the dispute, which is currently Orange County, California.
Notably, the arbitration must be on an individual basis, meaning it cannot be part of a common, consolidated, or class action. Each party will bear their share of the arbitration costs, but the prevailing party has the right to an award of reasonable attorneys' fees and costs incurred after filing the demand for arbitration. Del Taco or the developer can seek to enforce the agreement in any arbitral or other proceeding, and the prevailing party will be entitled to recover reasonable costs and expenses, including attorneys' fees, expert witness fees, and other litigation expenses.
Despite the agreement to arbitrate, either party may file a suit in a court of competent jurisdiction for temporary or preliminary injunctive relief, restraining orders, and orders of specific performance, including injunctive relief pertaining to the developer's use of the Del Taco system, trademarks, and service marks. The agreement to arbitrate survives the expiration or termination of the Franchise Agreement.
Since the FDD does not specify the conditions that would disqualify an arbitrator, it is important for a prospective franchisee to ask Del Taco about the specific circumstances that would prohibit an arbitrator from acting in a dispute. This information is crucial for understanding the full scope of the arbitration process and ensuring a fair resolution of any potential conflicts.