Zomato cracks down on cloud kitchens running 10+ brands from single spot

Food aggregator Zomato is now going to manually check the physical location of any cloud kitchen running more than 10 brands out of a single location. Approved restaurant partners that “provide a great experience” will be added to a whitelist.  

The crackdown comes after a blog post uncovered a Bengaluru cloud kitchen running some 200 different brands.

“Over the past 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,” said Zomato co-founder Mohit Gupta in a blogpost.

“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,” he added.

"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. We will further work with the Zomato team in ascertaining whether these kitchens comply with acceptable industry norms and suggest solutions thereon. The idea is to create and nurture a healthy ecosystem, " said Kabir Suri, President of NRAI and co-founder of Azure Hospitality.

Restaurants that do not make the whitelist can write to the firm, who will review the restaurant’s proposed offering, kitchen space and historic customer experience on the Zomato app among other things. The foodtech unicorn will also collaborate with the Food Safety and Standards Authority of India (FFSAI) in this regard.

In addition, Zomato will also showcase the information of multiple brands linked to a kitchen on the restaurant’s page on Zomato to boost transparency.

“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,” said Gupta.

“As a responsible industry body, we are equally concerned about the sporadic instances of people misusing the legal loopholes to operate hundreds of brands from a single small kitchen. We reckon this causes harm to the overall reputation of the industry as a whole,” the NRAI said in a statement.

The blogpost added that the FSSAI allows kitchen entities to operate multiple brands on a single FSSAI license, with some exceptions.

“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,” said Gupta.

“Such operators tarnish the reputation of the restaurant industry as a whole, hurting all of us in more ways than one,” he added.