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 (litigation) & 4 (bankruptcy) at a glance

What the filing discloses

Cases disclosed: 12; Item 3, as counted in the filing

Largest settlement, franchisor's own cases: $50.0M; As stated in Item 3

Bankruptcy (Item 4): Disclosed · an officer; 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).

Item 3 (litigation) · 12 matters disclosed · 4 pending listed

Litigation cases

The franchisor

Pending (1)

Torrez v. Del Taco LLC.
pending
filed 2014-07-16 · Superior Court for the County of San Bernardino, California (moved to Superior Court for the County of Alameda, coordinated proceeding) · CIVDS1410517; JCCP004904
“… On July 16, 2014, Timothy Tafoya, a former hourly employee, filed a class action lawsuit in the Superior Court for the County of San Bernardino, California (Case No. CIVDS1410517), alleging violations of the wage provisions of California law.”Page 14 of the 2025 FDD, Item 3
Outcome: “On November 12, 2021, the Court granted class certification in this case and, thereafter, the parties reached a settlement of all claims, for a settlement amount of $50,000,000. The Court issued its final approval of the settlement on August 8, 2023.”

Concluded (1)

Castillo v. Del Taco LLC.
settled
filed 2019-06-13 · Superior Court of Los Angeles County, California · 19STCV20629
“… On June 13, 2019, Miguel Castillo, an employee at one of our restaurants, filed a class action lawsuit in the Superior Court of Los Angeles County, California (Case No. 19STCV20629), alleging, among other things, that we committed unfair competition within the meaning of the California Business and Professions Code Section 17200,”Page 14 of the 2025 FDD, Item 3
Outcome: “In June 2023, the parties reached a settlement of Mr. Castillo’s individual claims that was subsequently approved by the court. As a result of that settlement, the court dismissed the individual and class claims on November 30, 2023.”

Parent, affiliates, master franchisor and subfranchisor

Pending (3)

AJP Enterprises, LLC and NHG Enterprises, LLC v. Jack in the Box Inc., Different Rules, LLC and Jack in the Box Properties LLC
pending
Brought by a franchisee · Jack in the Box Inc., Different Rules, LLC and Jack in the Box Properties LLC · filed 2025-03-27 · Washington Superior Court for King County · 25-2-09695-5 KNT
“… (Washington Superior Court for King County, Case No. 25-2-09695-5 KNT). On March 27, 2025, AJP Enterprises, LLC (“AJP”) and NHG Enterprises, LLC (“NHG”) filed a complaint against Jack in the Box Franchisor, JIB, and JIB Properties.”Page 13 of the 2025 FDD, Item 3
Marilyn Garner, Chapter 7 Trustee v. Jack in the Box Inc.
pending
Brought by a franchisee · Jack in the Box Inc. and Jack in the Box Eastern Division L.P. · filed 2017 · 48th Judicial District, Tarrant County, Texas · 048-29134017
“… (Cause No. 048-29134017, 48th Judicial District, Tarrant County, Texas). In April 2017, Jack in the Box Inc. (“JIB”) and Jack in the Box Eastern Division L.P. (collectively the “JIB Parties”) filed a case against J&D Restaurant Group, LLC (“J&D”) and Bernard J.”Page 13 of the 2025 FDD, Item 3
Foodmaker International Franchising Inc. and Foodmaker Inc. v. JNB Food Corporation and William Ang.
pending
Brought against a franchisee · Foodmaker International Franchising Inc. and Foodmaker Inc. · filed 1997 · Philippines Regional Trial Court · 97-1823
“… (Philippines Regional Trial Court, Case No. 97-1823). In 1997, Foodmaker International Franchising Inc. and Foodmaker Inc. filed an action against a former Jack in the Box franchisee in the”Page 12 of the 2025 FDD, Item 3

Concluded (6)

Aslam Group, LLC, et al. v. Jack in the Box Inc., et al.
settled
Brought by a franchisee · Jack in the Box Inc. · filed 2020-05-26 · San Diego Superior Court · 37-2020- 00015281
“… (San Diego Superior Court, Case No. 37-2020- 00015281). On May 26, 2020, a franchisee filed suit against JIB for breach of contract, breach of the implied covenant of good faith and fair dealing, and promissory estoppel.”Page 15 of the 2025 FDD, Item 3
Outcome: “The lawsuit was resolved through settlement in April 2021 and the case was dismissed with prejudice on May 11, 2021. Under the settlement agreement, among other things, JIB agreed to pay the franchisee $5,550,000 and to reduce the royalty fee for certain restaurants, and the parties exchanged mutual releases.”
Ibrahim Investment Corp., et al. v. Jack in the Box Inc., et al.
settled
Brought by a franchisee · Jack in the Box Inc. · filed 2020-06-05 · San Diego Superior Court · 37- 2020-00019032
“… (San Diego Superior Court, Case No. 37- 2020-00019032). On June 5, 2020, a franchisee filed suit against JIB asserting claims for breach of contract, breach of implied covenant of good faith and fair dealing, promissory estoppel, and specific performance.”Page 15 of the 2025 FDD, Item 3
Outcome: “Under the settlement agreement, among other things, JIB paid the franchisee $25,000, JIB modified certain rent amounts for various leases, JIB provided the franchisee an early termination right and reduced royalty fee for a Jack in the Box restaurant, the franchisee agreed to purchase from JIB a Jack in the Box location for”
Jack in the Box Inc., et al. v. San-Tex Restaurant, Inc., et al.
settled
Brought against a franchisee · Jack in the Box Inc. · filed 2020-06-02 · U.S. District Court for the Western District of Texas, San Antonio Division · 20-cv-00328
“… (U.S. District Court for the Western District of Texas, San Antonio Division, Case No. 20-cv-00328). On June 2, 2020, the company filed a complaint seeking to stop a franchisee from continuing to operate restaurants in the San Antonio market after the franchise and lease agreements for those”Page 15 of the 2025 FDD, Item 3
Outcome: “The case was settled February 19, 2021. The settlement provided that the company would immediately reinstate 45 franchise agreements and franchise lease agreements in Texas (that were terminated in 2019) with the franchisee, and franchisee would complete certain repairs and restoration work on”
National JIB Franchisee Association, Inc. v. Jack in the Box Inc.
settled
Brought by a franchisee · Jack in the Box Inc. · filed 2018-12-04 · San Diego Superior Court (filed in Los Angeles Superior Court, Case No. 18STCV06066; transferred) · 37- 2019-00031267
“… San Diego Superior Court, Case No. 37- 2019-00031267. On December 4, 2018, the National JIB Franchisee Association, Inc. (“NFA”) filed suit against Jack in the Box Inc. (“JIB”) in the Los Angeles Superior Court, Case No.”Page 14 of the 2025 FDD, Item 3
Outcome: “The case was settled November 10, 2020. The settlement provided that NFA and Company would dissolve the existing Franchisee Advisory Council and establish a Leadership Advisory Council with input from the NFA.”
San Diego County District Attorney investigation (Stipulation for Entry of Final Judgment)
judgment
Government or regulatory action · Jack in the Box Inc. · filed 2017
“In November 2017, the San Diego County District Attorney’s office initiated an investigation into JIB’s policies and practices regarding the redemption for cash of gift cards with balances less than ten dollars. As a result of that investigation, on October 10, 2018, JIB entered into a Stipulation for Entry of Final Judgment with the County.”Page 16 of the 2025 FDD, Item 3
Lauren Rehkopf v. Jack in the Box Inc.
settled
Jack in the Box Inc. · filed 2014-10-03 · San Diego Superior Court · 37-2014-00033641-CU-BT-CTL
“… (San Diego Superior Court, Case No. 37-2014-00033641-CU-BT- CTL). On October 3, 2014, a class action complaint was filed claiming JIB engaged in unfair business practices by failing to allow a customer to exchange the remaining balance on her gift card for cash once the card held less than $10 in value.”Page 14 of the 2025 FDD, Item 3
Outcome: “The case was settled in July 2016. The settlement provided that JIB would pay plaintiffs’ attorneys fees and costs in the amount of $60,000, pay the named plaintiff $2,500,”

Status not stated in the filing (1)

Office of the Attorney General of the State of Missouri (consent decree No. 31899 Equity)
Government or regulatory action · Jack in the Box Inc. · filed 1970 · Circuit Court of St. Louis County, Missouri · No. 31899 Equity
“In May 1970 the Office of the Attorney General of the State of Missouri notified JIB of its intention to initiate proceedings alleging that JIB had engaged in deceptive advertising by selling or offering for sale “hamburgers” which contained soy grits as an extender. JIB executed a consent decree dated May 28, 1970”Page 15 of the 2025 FDD, Item 3
Outcome: “(No. 31899 Equity), filed in the Circuit Court of St. Louis County, Missouri, which prohibits JIB from selling, offering for sale or advertising any substance as “hamburger” that is not fresh chopped or ground beef, with or without the addition of beef fat or seasoning, containing not more than 30% of fat, in the State of Missouri.” (page 16)

Item 3 lists the litigation the franchisor must disclose; a matter against a parent, an affiliate or a named officer is not a matter against the franchisor, and pending claims are allegations, not findings.

Disclosed in the 2025 Franchise Disclosure Document

Item 4: bankruptcy

GNC Holdings, Inc. Bankruptcy (United States Bankruptcy Court, District of Delaware, Case No. 20- 11662). Prior to joining us and our affiliates, Ryan Ostrom, our Chief Brand Officer, was Chief Brand Officer and Steven Piano, our Chief People Officer, was Chief Human Resources Officer of GNC Holdings, LLC (formerly constituted as GNC Holdings, Inc.). While Mr. Ostrom and Mr.

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?

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