Yum! Brands Inc. sued GrubHub Inc. over the cancellation of a five-year deal to deliver food from KFC and Taco Bell restaurants, saying the termination of the agreement will lead to customers having to pay more for food from those franchises.
The lawsuit comes a day after Just Eat Takeaway.com NV agreed to acquire U.S.-based Grubhub for US$7.3 billion in a deal that creates one of the world’s largest meal-delivery companies, as the coronavirus pandemic drives a surge in orders.
Yum agreed to buy a US$200 million stake in Chicago-based GrubHub in February 2018 as part of a partnership that included online ordering for pickup and delivery from KFC and Taco Bell in the U.S.
But GrubHub suddenly declared the deal invalid in early June, citing interactions between Yum, Uber Eats and PostMates, according to the lawsuit, which was filed Thursday in state court in New York.
“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 said in the complaint. “Many consumers remain reluctant to leave home or to eat in restaurants in the midst of a global pandemic. Grubhub’s brazen action will result in an increase of nearly 40 per cent in the fees consumers pay.”
GrubHub didn’t immediately respond to an e-mail seeking comment on the suit.
The case is Yum Restaurant Services Group LLC v GrubHub Holdings Inc., New York State Supreme Court, New York County.
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