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Business News/ Companies / News/  Zomato asks eateries to serve notice before exit
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Zomato asks eateries to serve notice before exit

Zomato’s Gold partner restaurants have been asked to give a 45-day notice
  • The development came a day after hundreds of restaurants in Gurugram, Delhi and Mumbai pulled out of Zomato Gold discounting scheme
  • On Thursday, 300 restaurants in Gurugram said they would pull out of reservation- and membership-driven dining apps, including EazyDiner (Prime), Zomato Gold, Dineout, nearbuy and magicpin. (Mint)Premium
    On Thursday, 300 restaurants in Gurugram said they would pull out of reservation- and membership-driven dining apps, including EazyDiner (Prime), Zomato Gold, Dineout, nearbuy and magicpin. (Mint)

    Food discovery and ordering platform Zomato, which runs the Zomato Gold discounting scheme, has asked some of its partner restaurants to inform the company if they wish to drop out of the programme. The development comes a day after hundreds of restaurants in Gurugram, Delhi and Mumbai pulled out of such schemes offering complimentary meals and drinks.

    In an e-mail on 15 August to its Gold partner restaurants, which had opted to de-list, Zomato wrote that they were required to give a 45-day notice if they wished to discontinue as part of the existing terms and conditions to ensure smooth transition for its users. It added that in case members wish to log back to its Gold platform they will be required to pay a sign-up fee.

    Zomato Gold has 1 million subscribers and 6,500 restaurants as its partners.

    “The decision to join and continue with this partnership has been completely yours just like all the other decisions you make to run your business effectively and efficiently," Zomato wrote in its e-mail. “With a view to make sure we protect user experience, we would request you to let us know proactively in case you are thinking of going off the programme for a brief period, as we will not like your users to have a poor experience when they visit your restaurant. As per the contract, you are required to give us a 45 days notice for this change to ensure a smooth transition for users."

    On Thursday, 300 restaurants in Gurugram said they would pull out of reservation- and membership-driven dining apps, including EazyDiner (Prime), Zomato Gold, Dineout, nearbuy and magicpin. The move can be seen as a sign of growing unrest between the restaurant industry and India’s online reservation and discounted membership platforms. The move led by the National Restaurant Association of India (NRAI) is largely aimed to end steep discounting by such platforms, which the NRAI says is hurting business.

    The NRAI said four other aggregators had reached out to the association willing to resolve the issue as early as next week. “The other aggregators have reached out and are willing to seek common ground and have a dialogue," said Rahul Singh, president, the NRAI, said in an interview, adding that Zomato, on the other hand, had only sent e-mails to its restaurants partners, and the association was yet to hear from the company. An email query to Zomato did not elicit any response.

    “We are willing to have a dialogue," EazyDiner’s co-founder Sachin Pabreja said, adding that the meetings with NRAI representatives could begin from Monday. Dineout, too, reached out to the NRAI and was willing to initiate a dialogue, a company spokesperson said. Till then, some restaurants will continue to be delisted from these apps, Singh said.

    The protests come amid rising pressure on dine-in sales, considering the higher rentals, a general slowdown in consumer sentiment, and removal of the input tax credit under the revised goods and services tax regime.


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    ABOUT THE AUTHOR
    Suneera Tandon
    Suneera Tandon is a New Delhi based reporter covering consumer goods for Mint. Suneera reports on fast moving consumer goods makers, retailers as well as other consumer-facing businesses such as restaurants and malls. She is deeply interested in what consumers across urban and rural India buy, wear and eat. Suneera holds a masters degree in English Literature from the University of Delhi.
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    Published: 15 Aug 2019, 11:08 PM IST
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