Taco Bell, KFC owner sues GrubHub over canceled delivery deal: Report

The Yum Brands lawsuit comes a day after Just Eat Takeaway.com bought the delivery service

Yum Brands filed a lawsuit against GrubHub after it canceled a delivery deal between the two companies, according to recent reports.

In 2018, they made a 5-year agreement that GrubHub would deliver food from KFC and Taco Bell, which are both owned by Yum. As part of the agreement, Yum bought $200 million worth of GrubHub’s stock, according to a press release about the agreement.

However, GrubHub canceled the agreement earlier this month because Yum reportedly also had “interactions” with UberEats and Postmates, according to Bloomberg.

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In the lawsuit, Yum argued that the broken agreement could cause customers to pay “nearly 40 percent” more in fees, Bloomberg reported.

“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,” the complaint reportedly said.

GrubHub did not immediately respond to FOX Business’s request for comment.

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Yum’s lawsuit comes a day after GrubHub and Europe’s Just Eat Takeaway.com agreed to merge in a $7.3 billion deal, which is expected to close in early 2021.

Ticker Security Last Change Change %
YUM YUM! BRANDS INC. 138.62 +1.30 +0.95%
GRUB n.a. n.a. n.a. n.a.

“We share a focus on a hybrid model that places extra value on volume at independent restaurants, driving profitable growth,” GrubHub CEO Matt Maloney said in a statement Wednesday. “Supported by Just Eat Takeaway.com, we intend to accelerate our mission to be the fastest, best and most rewarding way to order food from your favourite local restaurants in North America and around the world.”

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GrubHub had previously been in talks with UberEats for a merger, but that fell through.

Though there were antitrust concerns if the two companies came together, Maloney told CNBC that Just Eat Takeaway.com’s deal was “dramatically better,” which is why it succeeded and the UberEats deal did not.

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