Big chains accused of masquerading as independent restaurants on delivery apps

Independent restaurants have accused global corporations of being "sneaky" and "a killer" to family businesses by masquerading as indies on delivery apps.

Chain restaurants including Pizza Hut, TGI Fridays, Frankie & Benny's, Las Iguanas and Barburrito have brands on apps such as Deliveroo and Just Eat, giving them different names and the appearance of being small or independent businesses.

Justina John, owner of ONJA Taste of Tanzania in Cardiff, said trying to survive was "like small fish trying to swim with the sharks".

Peter Backman, CEO of theDelivery.World, said the practice was only misleading if customers were purposely trying to support independent restaurants and takeaways.

Justina, 45, from Cardiff, opened her restaurant about a year ago and said she had noticed an "overwhelming presence of chain restaurants, sometimes masquerading as independents" on delivery apps.

"Very sneaky, it's not fair on the small businesses," she added.

"The only thing that's keeping us alive is authenticity, there's certain things you can't fake."

Justina wants delivery platforms to take greater responsibility, to verify listings and help genuine independent businesses by separating them on the apps so customers can easily support them if they choose.

Just Eat, Deliveroo and Uber Eats all said virtual brands could be utilised by any business, including independents.

Just Eat said it supported independent businesses to reach new customers and virtual brands gave partners "the opportunity to expand their food offerings and diversify their revenue streams".

It added that it was transparent with customers as they could see the address of where they were ordering from, "to help them make informed choices".

Deliveroo said its "core mission is to champion local businesses" and that virtual brands allowed restaurants to "leverage existing kitchen facilities and capacity to create a delivery-only brand, giving them the opportunity to reach new customers and drive additional revenue in an increasingly digital world".

Uber Eats said it was committed to "levelling the playing field" for the merchants on its platform, adding: "We have a growing team of dedicated account managers working to build bespoke solutions and equal exposure opportunities on the app and we accelerate rather than compete with our partners' sales."

Jamie understood why companies do it and that you cannot stop it, but was frustrated because he said apps - in theory - created a more equal playing field.

"But then when they bring out five different restaurants under the same roof, now I'm not equal," he added.

"They have more money for advertising, promos, photographers."

He wants to see legislation about transparency around what kitchen people's food comes from and the parent company behind it.

"What I fear is eventually the smaller guys are going to go out of business because they're a lot less visible on these platforms.

"It feels a little bit unethical, because nine times out of 10 the people that are ordering from these ghost kitchens are doing it because of the branding."

For Fowl and Fury, this is a very real problem, he said, because most consumers order online.

Friends suggested creating an independent-only delivery service, but he said it could not compete with Uber Eats, Just Eat and Deliveroo.

Rajendra Vikram Kupperi, 45, director of Vivo Amigo, which opened in Cardiff in 2020, said ghost kitchens were diluting the takeaway industry and were unfair to independent businesses.

"During Covid, the number of ghost kitchens that opened was endless. It's a killer," he said.

"The bigger brands can undercut the prices, they can have good offers."

Vivo Amigo uses Deliveroo, Uber Eats and Just Eat but Rajendra feels his business has been directly affected by the practice of using ghost kitchens.

Mexican food brands have sub-brands online. For example, Kick-Ass Burrito is from Las Iguanas and Barburrito serves on Deliveroo as itself, but also as Death Valley Burrito, Badass Burritos and Twisted Health Kitchen.

He said he would like ghost kitchens and big brands separated from independent restaurants so consumers are not mislead.

"That would encourage customers who want to support independent brands, but at the moment it's all mixed up," he said.

"Customers can't really differentiate."

Barburrito said virtual brands were "one way restaurants can make better use of existing kitchens, reduce waste and respond to customer demand".

In a statement, it said the model "is not exclusive to large chains and many independent operators are equally able to create virtual brands on delivery platforms".

Coyote Ugly said: "The problem isn't competition, but whether businesses can remain viable at all.

"Ultimately, this is about keeping doors open, protecting jobs and giving hospitality a fighting chance to thrive."

Peter Backman of theDelivery.World said big chain restaurants created ghost restaurants "for extra revenue, they've got the capacity - why not?"

He said he was unsure if customers cared, but if they "really believe they're supporting their local business, it's deceiving".

"But if the consumer is just saying, 'oh, I want some wings', what the hell does it matter?"

He said he always favoured transparency and thought delivery apps having a page for independent businesses was a good idea, but questioned the practicality.

Frankie & Benny's, TGI Fridays, Pizza Hut and Las Iguanas have been asked to comment.