In-N-Out Puts Its Foot Down On Third-Party Deliveries

If merchants can’t stand the heat of a changing retail landscape, they best get out of the kitchen. But what happens when brands allege that the profusion of on-demand delivery services only allows third-party couriers to make a buck off their backs while degrading their reputations at the same time?

What happens is legal action – and the Southwest-based burger chain In-N-Out has no qualms wielding its authority.

TMZ originally reported that In-N-Out had filed suit against DoorDash, an on-demand food delivery service akin to GrubHub and Seamless, for using the restaurant’s trademark on its website and, more importantly, removing In-N-Out’s control over the food preparation process by ferrying meals to and from its stores. Arnie Wensinger, general counsel at In-N-Out, told CNBC in an email that the decision to bring legal action against DoorDash was a long time coming.

“We have asked DoorDash several times to stop using our trademarks and to stop selling our food,” Wensinger said. “Unfortunately, they have continued to prominently use our trademarks and serve our food to customers who believe that we are responsible for their delivery. Prior to filing the lawsuit, we tried contacting them several more times but they never responded to our phone calls or letters.”

The simmering legal battle could set a precedent for other food delivery services that work with traditional restaurants to satisfy customers’ cravings. Ars Technica explained that, aside from the use of their copyrighted materials on DoorDash’s website, one of In-N-Out’s chief complaints cites that a significant part of its brand relies on the unique way in which its food is prepared and served. However, In-N-Out is alleging that once its offerings pass into DoorDash’s couriers’ hands, they are losing a key element in the process that makes their food what it is: control.

In-N-Out may have a more legitimate claim than other restaurants fed up with third-party food delivery services, as the chain prides itself on never freezing its meat products and cooking every meal to order. It will be up to a court – or more likely a backroom settlement – to decide whether that gives In-N-Out enough of a claim over the uniqueness of their burgers. Alternatively, DoorDash’s lack of a guarantee on delivery times could also inform their overall ability to serve In-N-Out products in as close to their intended state as possible.

However, there may be more than meets the eye when it comes to DoorDash. Eater reported that In-N-Out isn’t the only restaurant that DoorDash has run afoul of in recent weeks. In fact, the courier service was found to be regularly overcharging for items from restaurants around New York City in early November, bumping the price of an $11 cheesesteak from a Greenpoint shop up to $16.95 on its website. In addition to the lack of control over the quality of the food, merchants are also taking issue with the fast and loose way DoorDash is playing with a brand’s reputation in relation to price and quality.

“I know someone paid 25 percent on top of it and thought they were probably getting a premiere delivery service,” Tommy Ferrick, owner of Delilah’s Steaks, told Eater. “They’re getting sheisted. ”

The brewing legal battle between In-N-Out and DoorDash may not capture national headlines, but the implications over whether restaurants can claim exclusive rights over their food even when being delivered could affect the innumerable food delivery services currently trying to break into markets across the country. Only days after Amazon announced an aggressive expansion of its Prime Now restaurant delivery service, the timing of the In-N-Out-DoorDash spat could lead to a heated debate on on-demand delivery that not even winter temperatures could cool.


New PYMNTS Study: Subscription Commerce Conversion Index – July 2020 

Staying home 24/7 has consumers turning to subscription services for both entertainment and their day-to-day needs. While that’s a great opportunity for providers, it also presents a challenge — 27.4 million consumers are looking to cancel their subscriptions because of friction and cost concerns. In the latest Subscription Commerce Conversion Index, PYMNTS reveals the five key features that can help companies keep subscribers loyal despite today’s challenging economic times.