Uber to Buy ezCater for $2.3 Billion as the Catering Fight Heats Up

Uber Technologies is acquiring corporate catering marketplace ezCater for $2.3 billion in cash, a move that expands Uber Eats’ reach among large-order business customers, according to Bloomberg. The deal is expected to close in the coming months.

For restaurant franchisors, the size of those orders is particularly important. Uber said in its announcement that ezCater customers spend more than $400 per order on average, and the Boston-based platform works with more than 140,000 restaurants nationwide. It processed more than $2.5 billion in gross bookings over the trailing 12 months.

Uber is pitching the deal as a sales channel for operators. CEO Dara Khosrowshahi told The Boston Globe, “Catering is a big business and can be a huge revenue stream for restaurants.” Uber said the combination should help restaurants grow order sizes and reach more customers through its existing business accounts.

The acquisition also sharpens the competition among third-party platforms. DoorDash, the largest U.S. food-delivery company, launched a workplace catering product in April, and the ezCater deal gives Uber an established marketplace to compete with it. The two platforms most franchisees already rely on for everyday delivery will now compete for higher-value group orders as well.

ezCater was founded in 2007 and employs about 900 people. Uber described the company as profitable on an adjusted basis. The platform rebuilt its business after the pandemic wiped out much of its office ordering, shifting its focus toward customers such as hospitals and factories.

Neither company addressed pricing for restaurants. The announcements did not say whether commissions, marketing fees or order terms will change after ezCater becomes part of Uber. Franchisees will have to wait for those details.

Franchisors will also have to pay closer attention to how catering agreements are structured. Brands that negotiate third-party marketplace agreements at the system level should review how those contracts handle fee changes after an acquisition and how catering volume shows up in unit-level reporting. For emerging brands building a catering program, having two major platforms competing for restaurant business could create more leverage when negotiating those terms.

For franchise candidates, catering is another part of the business worth examining before signing. Candidates can ask how much of a typical unit's sales come from catering, which platforms the system uses and who negotiates those agreements. Items 8 and 11 of the Franchise Disclosure Document can show which technology systems and suppliers are required, while current franchisees can better indicate how much margin remains after marketplace fees.

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