FDD Items 3 & 4 · 2025 filing
Del Taco litigation history
What Del Taco disclosed about lawsuits, arbitrations and bankruptcy in the 2025 Franchise Disclosure Document. Item 3 lists the material legal actions a franchisor must report; Item 4 covers bankruptcy. This is the franchisor's own disclosure, not a court record, and not legal advice.
Items 3 & 4 at a glance
What the filing discloses
- Cases disclosed
- 4
- Item 3, as counted in the filing
- Largest disclosed settlement
- $50.0M
- As stated in Item 3
- Bankruptcy (Item 4)
- Disclosed
- Franchisor, parent, predecessor or officer
- Filing year
- 2025
- Disclosures cover the prior ten years
Extracted from the 2025 Franchise Disclosure Document
Item 3: litigation
Pending: Philippines franchise case (decided in company's favor, appeal possible); Garner v. JIB (breach of franchise agreements, jury awarded $8M but court granted post-trial motion for nothing); AJP Enterprises v. JIB (termination of 47 restaurants, initial stages). Concluded: Torrez v. Del Taco LLC ($50M wage class action settlement, final accounting pending); Castillo v. Del Taco LLC (data breach settled 2023).
Disclosed in the 2025 Franchise Disclosure Document
Item 4: bankruptcy
GNC Holdings, Inc. filed Chapter 11 bankruptcy on June 23, 2020 while Ryan Ostrom (now Del Taco Chief Brand Officer) and Steven Piano (now Chief People Officer) were employed there. Plan confirmed October 14, 2020.
Disclosure signals that moved the score
How this shows up in the verdict
- Significant litigation portfolio spanning wage violations, data breaches, franchise agreement disputes, and marketing fund mismanagement—indicating systemic operational and legal governance issues
- Multiple lawsuits alleging deceptive advertising regarding ingredients creates reputational risk and potential regulatory exposure that could impact customer trust and sales
- Litigation related to alleged mismanagement of marketing funds raises questions about how the 5% royalty is being deployed and whether franchisees receive adequate return on mandatory contributions
The verdict grade is FranchiseVerdict's editorial assessment across SBA loan performance, unit growth, revenue and disclosure signals. It is not investment advice.
Before you weigh a lawsuit
How to read Item 3
A franchisor must disclose pending actions and any material civil action involving the franchise relationship, plus convictions or civil judgments for fraud, unfair or deceptive practices, or franchise-law violations, going back ten years. A case the franchisor brought against a franchisee counts too. Item 3 does not include every dispute: settled claims below the materiality line and matters resolved in private arbitration can be absent.
Questions worth asking current and former franchisees, using the contact list in Item 20:
- Were you, or anyone you know in the system, party to a dispute with the franchisor?
- Was it resolved by settlement, arbitration or a court, and on what terms?
- Has the number of disputes gone up or down since you signed?