Online food aggregator Zomato on Friday announced to crack down on Cloud kitchen operators who are misusing legal loopholes to offer hundreds of food brands from a single, small kitchen.
The company said that it is 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," said Zomato.
The food delivery platform engaged with the National Restaurant Association of India (NRAI) and 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," said Kabir Suri, President NRAI and Co-Founder of Azure Hospitality.
"We will further work with the Zomato team in ascertaining whether these kitchens comply with acceptable industry norms and suggest solutions thereon," he added.
The Food Safety and Standards Authority of India (FSSAI) has stated that cloud kitchen entities are free to operate multiple brands on a single FSSAI license (usually unique to a kitchen).
However, there are some exceptions to this. 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.
"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 Zomato.
"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," said the company.
The 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.
Zomato said it will whitelist the restaurant partners that provide a great experience so that they don't face delays while expanding the scope of their businesses.
"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 added.