Yum Brands sues Grubhub alleging distribution deal violated
Yum Brands, the owner of Taco Bell, Pizza Hut and KFC, has filed suit against Grubhub Inc., alleging that the online food ordering platform violated a distribution agreement between the companies, according to CNBC.
The suit, filed in New York County Supreme Court, clamed that Grubhub CEO Matt Maloney terminated a contract between the firms on June 2, following a letter claiming that Yum Brand’s work with Uber Eats and Postmates violated the contract.
Yum signed an agreement with Grubhub in February 2018 to buy $200 million in Grubhub shares and enter a deal for pickup and delivery of KFC and Taco Bell meals. Pizza Hut president Artie Starrs also joined the Grubhub board as part of that agreement.
Yum demanded that Grubhub back out of the termination, but the delivery platform refused, according to the allegations, and reached out directly to the franchisees and imposed a new pricing structure on them.
"We vigorously deny the allegations in the complaint," a spokesperson for Grubhub said via email. "It is unfortunate that Yum! Has taken this step and we are very sorry about the situation Yum Franchisees are in with millions of dollars now at risk especially in the midst of this challenging environment."
The statement continued to say that Grubhub was happy to work with Yum! In order to resolve the contract dispute. The statement added that Grubhub intents to "ensure that Grubhub and its stakeholders are protected against Yum!’s breach of the exclusivity provisions of the agreement."
The suit was filed after Just Eat Takeaway.com signed a $7.3 billion deal to acquire Grubhub.