The Taxonomy Menu allows you listing all taxonomies in a menu. You can either link the taxonomy by term id or term name. I have Pathauto installed such that each term is linked to a URL alias.

 

Unfortunately, you cannot replace the special characters in the term name. The following is a list of terms and their corresponding links.

• Apple & Pear ﹣ products/apple-%26-pear
• l’orange – products/l’orange
• Apple (Green) – products/apple-(green)
• Lemon/Grapefruit – products/lemon/grapefruit

The above links are all not valid links. The correct URL alias created by Pathauto should be.

• Apple & Pear ﹣ products/apple-pear
• l’orange – products/lorange
• Apple (Green) – products/apple-green
• Lemon/Grapefruit – products/lemongrapefruit

You can either change the Pathauto setting but this does not work anyway for a term name with ‘/’. An alternative is to replace the special characters when generating the menu link.

Edit the template.php in your theme folder and add the following theme function.

/**
 * This function replace the special characters in the taxonomy when generating the taxonomy menu with term name.
 */
// Remember renaming the function to <theme_name>_menu_item_link
function phptemplate_menu_item_link($link) {
  if (empty($link['localized_options'])) {
    $link['localized_options'] = array();
  }
  
  // replace special characters
  $href = str_replace('&-' ,'', $link['href']);
  $href = str_replace('(' ,'', $href);
  $href = str_replace(')' ,'', $href);
  $href = str_replace("'" ,'', $href);
  
  // replace the 2nd occurrence of '/'
  $href_head = substr($href, 0,  strpos($href, '/')+1);
  $href_tail = substr($href, strpos($href, '/')+1);
  $href_tail = str_replace('/' ,'', $href_tail);
  $href = $href_head.$href_tail;
  
  return l($link['title'], $href, $link['localized_options']);
}

This should solve the problem.

Done =)

Reference: Drupal APi – theme_menu_item_link