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Here’s How Non-Enforced Restaurant Data Sharing Laws Can Affect Franchises

New York City has placed these laws on hold as the legal landscape of third-party delivery tries to catch up with its current popularity.

By Justin Wick1851 Franchise Contributor
Updated 3:15PM 10/06/21

On Tuesday, Reuters published a release about how third-party delivery services in New York City are withholding customer data from restaurants. For now, the city has agreed to “hold off” on requiring these delivery companies to share data with the brands they deliver.

The city of New York was sued by DoorDash back in September over data sharing provisions. The lawsuit was in regards to how third-party delivery services can handle customer names, phone numbers, email addresses and delivery addresses. While delivery services need most of this information to function at their best, others have called a lack of transparency with this data a “shocking and invasive intrusion of consumer’s privacy.”

Franchises are placed in a difficult position with these concerns, one that might put principle against profitability. Is a concern over privacy worth avoiding a third-party delivery service, or is there a solution that can regain public trust?

Without knowing customer data, restaurants that use delivery services are kept in the dark on delivery practices after food leaves their hands. As delivery service runs ablaze with demand due to the COVID-19 pandemic, restaurants are largely forced to either accept what delivery services tell them, or not offer a service and get left behind.

If companies like DoorDash are continually making legal headlines with privacy concerns, it could tempt many in the franchising industry to put a focus on a delivery service they can more  closely manage. Some franchise brands have pursued independent delivery services, ones that avoid third-party delivery altogether.

This is not the first time New York City has made legal headlines in the food delivery industry. Delivery commission caps have been a highly-contested subject since the inception of these third-party delivery services, and as the services continue to evolve, the legal complexities have only seemed to magnify.