Foodora says they'll still pay Toronto restaurants even though they owe millions
Foodora may be bankrupt and owe almost $5 million, but they're still asking Toronto restaurants to continue to use the app as the company winds down operations as they prepare to exit the Canadian market next week.
In a letter recently addressed to restaurant partners, they assured that "payments for successful orders will continue to be made on a normal billing cycle," but some restaurant owners have their doubts.
"I am concerned about getting our money back. Restaurants are suffering to begin with. My understanding was that they were going to pay everyone and then I heard again that they were filing bankruptcy and that we won't be paid," said Tabule owner Diana Sideris.
According to the letter sent to restaurant partners the figures on the creditors list is based on "the termination claim Foodora expects each restaurant will have."
It doesn't include outstanding payments and creditors are allowed to claim "whatever amount they believe is owing to them."
The bankruptcy announcement was a shock to most, especially during the pandemic when food delivery services are booming.
"I didn't see it coming, especially at this time," said one Toronto restaurant owner who wished to remain anonymous for legal reasons.
And while Fresco Fish and Chips owner Todd Pinnell told blogTO they've been paid up until the end of April from Foodora, he's unsure what will happen come May 11, when the business officially shuts down.
"We're still using them," he said. "Of all the companies they're the ones we trust [but] that's not to say we're not going to have issues."
Foodora has encouraged their partners to continue to use their services stating: "you will continue to receive orders via Foodora and riders will continue to pick them up and deliver to customers as usual."
But many restaurants have already stopped using them.
"We may be making a mistake but better safe than sorry. It's hard to wind down a large business like [that]," said the anonymous Toronto restaurant owner. "I'll be sad to see them go."
And some restaurants are already having a difficult time adjusting to the loss of their preferred delivery service.
"It's a huge disruption in our business. It's very disappointing that they've chosen this time to leave the market place," said Steve Himel, owner of Henderson Brewery.
According to the creditor's list, Henderson Brewing is owed $1,423.71.
"No one else is doing what Foodora does. We don't know how we're going to replace that revenue. The short term loss is nothing compared to the long-term loss. We need to find as many other outlets to sell our products as soon as possible."
However, most restaurants have said the loss of Foodora is sad but not too damaging even if they don't get reimbursed for the money owed.
"For us it just sucks. It's not going to make a difference at this point," said Sideris.
"There's no real damage to us. Uber or whoever else will just gobble up their business," added the Toronto restaurant owner.
"There's absolutely going to be a hole but thankfully there's still Uber, Skip the Dishes, DoorDash," added Pinnell. "Every couple of days we're handed a new issue we have to deal with and we're just rolling with the punches and seeing what we can come up with."
According to Foodora, the final date of payment is May 22, 2020.
We have received a number of messages from our restaurant partners following their receipt of the documentation sent by Foodora’s proposal trustee, Grant Thornton, earlier this week.
As was communicated in our announcement on April 27, 2020, Foodora will continue to operate its business until May 11, 2020. You will continue to receive orders via Foodora and riders will continue to pick them up and deliver to customers as usual.
Payments for successful orders will continue to be made on a normal billing cycle. The final payment will be on May 22nd, 2020. Should you have further questions about billing, please feel free to reach out at firstname.lastname@example.org.
Please refer to the Frequently Asked Questions (“FAQ’s”) posted at www.GrantThornton.ca/foodora for further information. Should you have any questions or concerns for Grant Thornton which are not addressed on the FAQ’s, contact information for Grant Thornton is listed on this website.
Foodora has 30 days to file its proposal, however, this filing deadline may be extended. If you received an email from Grant Thornton then you are on the mailing list and should receive a copy of the proposal once it has been finalized. All creditors who prove their claims will have the ability to vote in the proposal.
We also understand that there may have been some confusion about the creditor list that was provided by the Trustee. This creditor list is a point-in-time accounting of known creditors of Foodora based upon the termination claim Foodora expects each restaurant will have.
This amount does not include outstanding payments for past orders since these will be paid in the ordinary course.
The debts listed on the creditor list are not binding on any creditor, and every creditor is entitled to make a claim in the proposal for whatever amount they believe is owing to them. That claim will then be assessed by the trustee. Moreover, parties who were not included on the creditor list are also entitled to file claims.
As we have advised, Foodora will not be requesting the return of restaurant tablets and will be unlocking them at the end of the day on May 11.
If any restaurant wishes to make a claim for the tablet deposit, they will be able to do so in the proposal process. The Trustee will be in contact with the restaurants and other creditors in approximately 40 days’ time after the proposal has been filed.
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