Yum Brands, Parent Company of Taco Bell, Is Suing Grubhub

Both companies say the other is in violation of a deal they made in 2018

In 2018, Yum Brands spent $200 million for 3 percent stake in Grubhub, which included a contract stating Grubhub would give preferable pricing and service to Yum Brands restaurants, like Taco Bell and KFC. Now, Yum Brands has filed a lawsuit claiming Grubhub terminated the contract, and implemented a new pricing structure that’ll result in customers paying 40% more in delivery fees. However, Grubhub claims it’s because Yum Brands also did work with Uber Eats and Postmates, which put them in violation of the exclusivity agreement.

“Grubhub’s improper efforts to rid itself of a deal it no longer wanted and to line its pockets will cause enormous harm to consumers at a time when they can least afford it,” Yum Brands claims in the suit, according to National Restaurant News. Yum Brands also said it only reached out to other delivery services because of the pandemic, which “increased the importance, for consumers and small-business restaurant owners alike, of reliable and accessible delivery across every part of the country.”

Third-party delivery services have been frantically trying to corner the market, as delivery has never been more popular (though it has not led to profitability). Yesterday, Grubhub announced it had been acquired by Just Eat Takeaway, a Dutch delivery company, despite previously having been in talks with Uber for a merger. Delivery services have also come under fire for exorbitant fees, like the ones Yum Brands says Grubhub is now implementing.

And in other news...

• A Whole Foods worker says she was fired after she posted objections to having to serve police officers for free during protests on social media. Whole Foods denies that was the reason. [The Guardian]
• Officers in Kansas City were also allegedly told they were not welcome in a restaurant because of their uniforms. [Kansas City]
• The South Carolina National Guard is claiming they were served pizza with glass in it in D.C., but there are a lot of holes in the story. [Washingtonian]
• Sam’s Club is offering curbside pickup. [AdWeek]
• Tyson Foods is cooperating with the Department of Justice in a price-fixing and antitrust investigation into the chicken industry. [FoodDive]
• Another 1.5 million people applied for unemployment at the beginning of June, but restaurants are starting to hire people back. [QSR]
• Chef Roy Choi is getting pretty good at flower arrangements:

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