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5 Restaurant Liabilities that Could Stem from Food Delivery Apps
The third-party food delivery business is booming.
According to Fortune, the percentage of food orders booked online has officially exceeded the number placed over the phone. People are commonly using disruptive apps like Grubhub, UberEats and Postmates to order in. This gives restaurant owners new options for expanding their reach and providing customers with greater convenience — without the need to invest in marketing and infrastructure.
But convenience comes at a price, and many in the food service industry are concerned about restaurant liabilities and the potential legal ramifications of putting the delivery of their product in the hands of strangers. If you're thinking of partnering with a food delivery service, here are five liability considerations to be aware of, as well as tips for protecting your business.
1. Food Quality
The minute a food order leaves your premises, it's out of your control and in the hands of a driver you've never met before. You have no way of ensuring that the chicken parmigiana arrives hot or the sushi stays in one piece. If it doesn't, customers will point the blame at your restaurant and expect you to correct the problem. Not a big deal from a legal perspective — but you may be liable for issuing refunds or other forms of compensation.
Make a point of investing in the right packaging for the items on your menu. Styrofoam clam boxes may be cheap, but will they hold up on the journey? You might also want to limit the delivery distance for pickups.
2. Food Safety
Closely related to food quality is food safety. Many states require that restaurant-affiliated delivery drivers carry a food handler's permit, however, third-party delivery drivers aren't required by law to carry one. This begs the question, who is liable if a customer gets food poisoning?
Delivery services aren't under the jurisdiction of the Food and Drug Administration (FDA), which could leave you exposed to a potential lawsuit stemming from a foodborne illness — whether it originated at your establishment or from exposure en route.
Have a conversation with the food delivery business about food safety and restaurant liability before you enroll in their service. For example, if there's a problem, how is it determined who's liable? What food safety standards are drivers required to comply with, such as temperature control, vehicle hygiene, etc.?
3. Automobile Insurance
Delivering food to an unknown location provides many opportunities for distraction. Most food delivery services require that drivers have auto insurance in place to cover losses in the event of an accident. Find out what insurance policies the delivery business requires (and how often they are checked and enforced). You may also require proof of insurance from a driver each time a pick-up is made.
4. Unsanctioned Delivery Services
In the interest of providing customers with more choice, some food delivery brands — like Postmates — work with restaurants without a contract, essentially delivering from restaurants without the owner's permission. To protect your restaurant from liability, clearly advertise the delivery services that you do partner with and issue disclaimers against any potential liability from unsanctioned services.
5. Beware of Apparent Endorsements
Because food delivery companies can add your trademark, logo and copyrighted materials to their app, be sure everything is accurately represented. Is the menu up-to-date? Try to sniff out if there's a risk that your customers might misinterpret your involvement as a possible sponsorship or endorsement of the app — or even resell your food without your consent.
The Bottom Line
Despite the many benefits of partnering with a reputable food delivery company, you can avoid restaurant liabilities by doing your homework. Talk to other business owners who've signed up, carefully read the terms and conditions and consult a lawyer to understand any potential legal exposure.
You'll also want to consider how the service will impact your existing on-premise business. Will it slow down the kitchen? How will you handle responsibility of errors reported by customers you don't have any face-to-face dealings with? How will you respond to reviews left on the delivery service app (which often rate the food, not the delivery service)?
The best approach is being prepared to actively manage the partnership. After all, in the customer's eyes, the buck stops with you.
According to Fortune, the percentage of food orders booked online has officially exceeded the number placed over the phone. People are commonly using disruptive apps like Grubhub, UberEats and Postmates to order in. This gives restaurant owners new options for expanding their reach and providing customers with greater convenience — without the need to invest in marketing and infrastructure.
But convenience comes at a price, and many in the food service industry are concerned about restaurant liabilities and the potential legal ramifications of putting the delivery of their product in the hands of strangers. If you're thinking of partnering with a food delivery service, here are five liability considerations to be aware of, as well as tips for protecting your business.
1. Food Quality
The minute a food order leaves your premises, it's out of your control and in the hands of a driver you've never met before. You have no way of ensuring that the chicken parmigiana arrives hot or the sushi stays in one piece. If it doesn't, customers will point the blame at your restaurant and expect you to correct the problem. Not a big deal from a legal perspective — but you may be liable for issuing refunds or other forms of compensation.
Make a point of investing in the right packaging for the items on your menu. Styrofoam clam boxes may be cheap, but will they hold up on the journey? You might also want to limit the delivery distance for pickups.
2. Food Safety
Closely related to food quality is food safety. Many states require that restaurant-affiliated delivery drivers carry a food handler's permit, however, third-party delivery drivers aren't required by law to carry one. This begs the question, who is liable if a customer gets food poisoning?
Delivery services aren't under the jurisdiction of the Food and Drug Administration (FDA), which could leave you exposed to a potential lawsuit stemming from a foodborne illness — whether it originated at your establishment or from exposure en route.
Have a conversation with the food delivery business about food safety and restaurant liability before you enroll in their service. For example, if there's a problem, how is it determined who's liable? What food safety standards are drivers required to comply with, such as temperature control, vehicle hygiene, etc.?
3. Automobile Insurance
Delivering food to an unknown location provides many opportunities for distraction. Most food delivery services require that drivers have auto insurance in place to cover losses in the event of an accident. Find out what insurance policies the delivery business requires (and how often they are checked and enforced). You may also require proof of insurance from a driver each time a pick-up is made.
4. Unsanctioned Delivery Services
In the interest of providing customers with more choice, some food delivery brands — like Postmates — work with restaurants without a contract, essentially delivering from restaurants without the owner's permission. To protect your restaurant from liability, clearly advertise the delivery services that you do partner with and issue disclaimers against any potential liability from unsanctioned services.
5. Beware of Apparent Endorsements
Because food delivery companies can add your trademark, logo and copyrighted materials to their app, be sure everything is accurately represented. Is the menu up-to-date? Try to sniff out if there's a risk that your customers might misinterpret your involvement as a possible sponsorship or endorsement of the app — or even resell your food without your consent.
The Bottom Line
Despite the many benefits of partnering with a reputable food delivery company, you can avoid restaurant liabilities by doing your homework. Talk to other business owners who've signed up, carefully read the terms and conditions and consult a lawyer to understand any potential legal exposure.
You'll also want to consider how the service will impact your existing on-premise business. Will it slow down the kitchen? How will you handle responsibility of errors reported by customers you don't have any face-to-face dealings with? How will you respond to reviews left on the delivery service app (which often rate the food, not the delivery service)?
The best approach is being prepared to actively manage the partnership. After all, in the customer's eyes, the buck stops with you.