Zomato to check cloud kitchens operating scores of brands from same location

New Delhi, September 23, 2022

Online food aggregator Zomato today said it would check out cloud kitchens operating more than ten brands out of a single location to ensure that customers get products of good quality and are not cheated in any way.

"Going forward, we are going to manually check any physical location which runs more than 10 brands out of a single location. While there is no exact science to the right number of brands, we believe that even the most organised outlets in the industry don’t see operational benefits and customer trust in operating too many brands from a single kitchen," the company said in a blog post on its website.

"Over the last few weeks, we have been engaging with the National Restaurant Association of India (NRAI) and the other restaurant partners to formulate the right approach to curb these practices. It is imperative for us to work together to protect the good work done by so many professionally run restaurants and jointly create parameters to avoid the misuse of the aggregator platforms in such a blatant and abrasive fashion," it said.

Zomato said there were certain cloud kitchen operations which create and operate multiple brands that are serviced from the same kitchen.

"When done thoughtfully and professionally, it brings innovative and high-quality experiences to customers at relatively lower prices as it creates operational and cost efficiencies in the kitchen.

"In the recent past, the statutory body – Food Safety and Standards Authority of India (FSSAI) has also stated that cloud kitchen entities are free to operate multiple brands on a single FSSAI license (usually unique to a kitchen)," it pointed out.

"However, there are some exceptions to this. Such as some fly-by-night operators, who account for less than ~0.2% of registered kitchens, misuse this flexibility in law by creating innumerable brands from the same kitchen. These brands have little to no differentiation in the product offering; instead they confuse/cheat customers by creating a false perception of choice, while none of it actually exists. Most of the brands run by these operators also have terrible reviews and ratings on our platform. Such operators tarnish the reputation of the restaurant industry as a whole, hurting all of us in more ways than one," the company said.

According to it, these operators often create multiple brands with very little differentiation in the actual product (dishes or the food experience itself) offered to customers.

"Additionally, managing multiple brands and cuisines is operationally complex, and unless done with the right SOP and oversight, this leads to high inconsistencies in food quality and hygiene," it said.

Zomato said customers’ average delivery rating for these operators goes down as the number of brands from a single kitchen goes up. Similarly, the percentage of customers who raise complaints goes up as the number of brands from a kitchen increases.

The company said it would whitelist the restaurant partners that provide a great experience other than the operators mentioned above from this manual check so that they don’t face delays while expanding the scope of their businesses.

"If you are a restaurant partner, and you don’t make it to the whitelist, and you think that you serve very differentiated brands (more than 10) from your premises, please write to us at multiple-listings@zomato.com. Our teams will review your proposed offering, kitchen space (is it large enough to host and do justice to multiple cuisines), historic customer experience on Zomato for your existing listings amongst other things. We will also collaborate with FSSAI at their request so that it helps our authorities," it said.

"Additionally, as the Indian customer is seeking more information about the origin of their food, we will also showcase the information of multiple brands linked to a kitchen on the restaurant’s page on Zomato, in the spirit of transparency," it said.

"While we work with the restaurant industry to together raise awareness and quality of experiences brought to customers, we also realise the important role we play in safeguarding customer experiences. We will keep evolving our policies and guidelines such that a small fraction of bad actors do not spoil the pudding for all of us," it added.

Zomato also thanked Prashant Baid (@prstb), who highlighted the issue via a Twitter post in late August. Among other things, he mentioned one cloud kitchen which was running 200 brands from one location with a single license.

"A heartfelt thank you to @prstb, who highlighted this to us via his Twitter post a few weeks back. Thank you for helping us keep Zomato a trusted platform for all customers!" it added.

NNN