The food aggregator pointed out that 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 licence.
However, it argued that some fly-by-night operators, who account for less than 0.2 per cent of registered kitchens, misuse this flexibility in law by creating innumerable brands from the same kitchen.
According to Zomato, 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,” it said in the blog post.
Elaborating upon why this leads to a bad customer experience, the blogpost said these operators often create multiple brands with very little differentiation in the actual product (dishes or the food experience itself) offered to customers.
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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, the food aggregator said.
Zomato said over the last few weeks, it has been engaging with the National Restaurant Association of India (NRAI) and the other restaurant partners to formulate the right approach to curb these practices.
“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 NRAI.
“Going forward, we are going to manually check any physical location which runs more than 10 brands out of a single location,” Zomato said.
The aggregator said it will whitelist the restaurant partners that provide a great experience other than the operators mentioned above from this manual check so that they do not face delays while expanding the scope of their businesses.
It suggested restaurant partners who do not make it to the whitelist, and believe that they serve very differentiated brands (more than 10) from the same premises to get in touch with the company.
“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,” the blogpost added.
The decision by Zomato comes in the wake of a Twitter thread a few weeks back on multiple brands being run by the same kitchen.
