Zomato Will Ban These Cloud Kitchens For Running 10+ Brands From One Location; Manual Checking Will Be Done

On Friday, online food aggregator, Zomato announced to crack down on Cloud kitchen operators who are misusing legal loopholes to offer hundreds of food brands from a single and  small kitchen.

Cloud Kitchen Operators Misusing Legal Loopholes

Now, the food aggregator has decided to manually check any physical location which runs more than 10 brands out of a single location.

Further adding, “While there is no exact science to the right number of brands, we believe that even the most organized outlets in the industry don’t see operational benefits and customer trust in operating too many brands from a single kitchen,”.

To implement this belief and to formulate the right approach to curb these practices, Zomato is now engaged with the National Restaurant Association of India (NRAI) and other restaurant partners.

 The President NRAI and Co-Founder of Azure Hospitality, Kabir Suri said, “Upon deliberations with Zomato, we felt this was an acceptable interim solution wherein the Zomato team carries out a preliminary physical inspection of such locations,”.

Adding, “We will further work with the Zomato team in ascertaining whether these kitchens comply with acceptable industry norms and suggest solutions thereon,”.

Cloud Kitchen Entities Free To Operate Multiple Brands

According to the Food Safety and Standards Authority of India (FSSAI), the cloud kitchen entities are free to operate multiple brands on a single FSSAI license (usually unique to a kitchen).

It is noteworthy here that there are some exceptions to this too. 

For instance, some fly-by-night operators, who account for less than 0.2 percent of registered kitchens, misuse this flexibility in law by creating innumerable brands from the same kitchen.

Zomato said, “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,” according to the company.

In addition to that, customers’ average delivery rating for these operators goes down as the number of brands from a single kitchen goes up.

At the same time, the percentage of customers who raise complaints goes up as the number of brands from a kitchen increases.

In its next move, Zomato is planning to whitelist the restaurant partners that provide a great experience so that they don’t face delays while expanding the scope of their businesses.

The online food aggregator is also going to showcase the information of multiple brands linked to a kitchen on the restaurant’s page on Zomato, in the spirit of transparency.