Food aggregators Zomato, Swiggy renegotiates exclusivity contracts with restaurants

Food delivery platforms like Zomato and Swiggy have started renegotiating exclusivity contracts with few restaurants citing a downward impact on business due to the ongoing pandemic.

Evoking the force majeure clause that frees both parties from liability when an extraordinary event occurs, Zomato and Swiggy are redrawing exclusivity and minimum guarantee clauses in their contracts with local restaurants as well as top restaurant brands.

"Yes, we are revisiting our exclusivity contracts with a few restaurants. These are unprecedented times for the industry, and we are more than willing to support our partners' evolution and adjustments to the new realities,” said Mohit Sardana, COO-Food Delivery, Zomato to ET.

Swiggy, however, didn’t comment anything on it.

Also, many restaurants including Fatty Bao, Monkey Bar, Truffles etc have either decided to walk out of negotiations or not renew contracts with the food delivery apps, the people said.

While each contract was negotiated with different terms, it could range from a flat onboarding one-time payment, monthly assured payments, lower commissions, and higher visibility on the app for the restaurants.

Not only this, in the last few days these players have partnered with top brands like Marriott, ITC, RitzCarlton to name a few who generally operate in fine dining spaces.

“At Swiggy, it is our constant endeavour to provide exceptional experiences to our customers especially from the restaurants they admire the most. Through our partnership with ITC Hotels,  customers  can   now indulge  in  curated  gourmet  dishes  from  popular restaurants  of  the ITC Hotels chain across India through the Swiggy app. We look forward to creating unique dining experiences for customers while helping them celebrate special occasions at the comfort of their homes,” said Vivek Sunder, COO, Swiggy during its tie-up with ITC Hotels.