Michael L. Feinstein, P.A.

Contract disputes between Yum Brands, Grubhub lead to lawsuit

Business relationships can open doors for companies. Often, companies choose to work together because they can each benefit from the arrangement. However, these relationships do not always run smoothly, and contract disputes can arise if one or both parties involved believe that the terms were not honored.

Florida readers may be interested in a lawsuit recently filed by Yum Brands. Yum, which owns restaurants like Taco Bell, Pizza Hut and KFC, filed suit against delivery service Grubhub, claiming that Grubhub created a new pricing structure without notifying the company. As a result, Yum believes that Grubhub has breached the terms of their contract. Yum indicated that consumers who order its food products for delivery through Grubhub would see an increase in fees of almost 40% under the new pricing structure. Yum believes that an increase in the fees to consumers would harm the company's reputation for providing great value.

A spokesperson for Grubhub indicated that that the company denied the allegations made by Yum. Grubhub also has complaints of its own against Yum, indicating that the company violated an exclusivity agreement in their contract by working with other delivery services. However, Yum contests those claims by stating that working with other services was allowed as long as Grubhub had exclusive advertising rights to KFC and Taco Bell.

When contracts exist, the possibility of contract disputes also exist. Though the terms of these agreements can often help limit the possibility of conflict, they do not completely wipe out the chance of issues arising, as this case shows. If Florida companies are dealing with breach of contract issues, they may find it useful to understand their available options for protecting their company's reputation, interests and overall well-being.

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