FHRAI asks Zomato, Swiggy to Review Discounting Schemes or Face Protests

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An umbrella body of hotel and restaurant associations has asked food service aggregators like Zomato and Swiggy to review their discounting schemes and engage in a dialogue for addressing restaurant owners’ issues.

The Federation of Hotel & Restaurant Associations of India (FHRAI) has also warned food aggregators such as Zomato, Swiggy, Nearbuy, Dineout Prius Heights, EasyDiner and Magicpin of nationwide protests if they continue with their practices and schemes.

The federation is the apex body of regional associations of hoteliers and restaurants. The FHRAI in a statement said that it has asked the food service aggregators (FSAs) to engage in a ‘fruitful dialogue’ to arrive at a win-win outcome for all.

Calling for a review of all their discounting schemes, the federation said as a technology partner, by merely hosting its members’ inventory, FSAs cannot hold sway and arm twist the traditions and aspirations of millions of entrepreneurs in India.

“Unfortunately this new way of impractical, unaffordable and unconscionable discounting has put the hospitality industry in a very awkward situation,” FHRAI Vice-President Gurbaxish Singh Kohli said.

The most common complaint with the FSAs is about the contracts being one sided. These contracts are not even consistent across the industry and almost always unfair towards startups as against established brands, he added.

“A model contract which is mutually agreed upon has to be accepted. As such a conduct is indicative of dominant behaviour and is indeed exploitative,” Kohli said.

Further, the agreement terms are not sacrosanct as they are frequently and unilaterally changed from time to time and always in favour of the FSAs, he added.

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