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Waitr Founder and CEO Chris Meaux speaks during Waitr Day, a celebration of Waitr's move to it's new Jefferson Street location, Friday, February 15, 2019, in downtown Lafayette, La.

At least 20 restaurant owners in Acadiana plan to protest Waitr's new "performance-based rate structure" by boycotting the delivery platform Sunday.

They said they're hoping other restaurants and customers will join them in not using the app or website for one day. They're hoping a noticeable loss of revenue will demonstrate to Waitr how dependent it is on the restaurants it partners with.

"We want them to know they need us," said Zee Baloch, who owns Hot Food Express and is leading the effort. "Meet us in the middle. We're not saying to go back to 3 percent, but they're taking the rights away from us. What's going to be next? We're paying the driver's wage? We want them to know how we feel. We want this to be fair."

Waitr announced new terms for its partner restaurants last week that could mean slimmer profit margins — or even losses — for restaurants that sign the new agreement. The backlash was swift, especially among restaurant owners in Acadiana who have partnered with Waitr since its launch in 2015.

The new pay model uses a sliding scale: Waitr will take a higher commission for restaurants that have a smaller volume of sales and a lower commission for those that have a larger volume.

Restaurants with monthly food sales from the Waitr platform that exceed $20,000 will be charged a 15% commission from Waitr for every transaction, according to the new Master Services Agreement sent to restaurants. The commission increases in brackets, reaching a cap at 25% for restaurants with monthly food sales at or below $1,000, the agreement says.

It's especially jarring for those who still remember Waitr as a small tech company known for helping local restaurants instead of the publicly traded company that sold for $308 million.

Waitr stands by the new plan.

Tyson Queen, national sales director for Waitr, said even the highest commission bracket of the new agreement is more favorable than rates offered by competing delivery services such as Grubhub, DoorDash, UberEats and Postmates.

"The last thing we want to do is just serve out a notice and tell people to just deal with it," Queen said. "At the end of the day — I hate using this line — it is a business. We have to make sure everybody is in a position to make money. We want to empower restaurants to help them have a better chance to compete."

There's been more push back from restaurant owners in Waitr's older markets like Lake Charles and Lafayette, which originally had a 3.5% commission and 55 cent charge for every order. Rates have steadily increased over the past four years.

Waitr currently takes between 15% and 25% commission on every order for restaurants in all markets, Queen said.

Mitch Rotolo, founder and chief executive officer of Rotolo’s Pizzeria, exclusively partnered with Waitr at its 20 restaurants in south Louisiana prior to the controversy. But now, he said the company has opened the door to any delivery business that wants to come in.

"We’re very concerned about Waitr changing their fee structure," Rotolo said. "If their model requires more revenue, they need to ask the customer to pay more for the service, instead of going back to the vendor and squeezing them. That’s unfair."

But restaurateurs aren't just upset about the new commission structure. They're particularly vocal about the tone and terms of the new contract.

The new terms prohibit restaurants from charging a higher price for food ordered through Waitr than regular, in-restaurant transactions and passes along the fees charged by credit card companies to the restaurants. It also prohibits restaurants from using photos taken by Waitr for any purpose.

Before, restaurant owners were free to pass on some of the expense to customers by increasing their menu prices on the Waitr platform. Restaurants didn't have to pay the credit card fees, and they were also free to use Waitr's images of their food for their own promotional purposes.

"I'm not planning to sign the new agreement," said Blake Gallet, who owns Kirk's U Need a Butcher. "They're trying to contact me via email. They're asking me to meet with one of their representatives to have them explain the contract, but it's pretty self-explanatory to me. If you read it, they basically want to take over our business and not allow us to grow. It's not fair."

The contract is not meant to take away restaurant rights, according to Queen. Although the new commission structure won't change, exceptions to other terms in the contract can be made for restaurants that continue to partner with Waitr, he said.

"We realize what's going on, being from this area, and that's why we're trying to reach out personally and hear these folks on a local level and not just let them anguish in silence," Queen said. "We're truly here to be the voice of local restaurants."

Several restaurant owners, including those who plan to take part in Sunday's protest, declined to comment for this story for fear of legal action that could result from their discussion of the terms of the new contract. Some are consulting attorneys. Others are terminating their agreements with Waitr.

"A lot of people are counting on me," Baloch said. "They're counting on me to speak up because I'm not impacted as much. A lot of people won't say anything because they're smaller. They're thanking me for standing up for them. I can speak up more because we have the sales."

Other restaurateurs, especially those in larger markets and those with more competition from other delivery companies, aren't as concerned.

Ray VanMerrienboer, owner of Red Zeppelin Pizza in Baton Rouge, said he is dissecting the new Waitr terms. His restaurant was one of the first in the market to partner with Waitr, but sales through the delivery service have declined as more competitors joined the market. Waitr now accounts for 25% of Red Zeppelin’s to-go sales. 

He said the new fees will trim restaurants that don’t get used that much by Waitr, so he may see more sales if there’s less competition on the platform. 

"I may go in and see where I start to land," he said. 

VanMerrienboer said if he leaves the service, he expects many customers will just contact his restaurant directly and place orders, but he would still probably lose about 15% of the to-go business.

"I was in business before them and I’ll be in business without them," he said. 

Waitr's new terms go into effect Aug. 1. Any restaurant that does not sign the new contract by July 31 would be removed from the Waitr platform.

The change comes just days after Waitr laid off an undisclosed number of employees the company said would streamline redundancies that resulted from the acquisition of Minneapolis-based Bite Squad earlier this year. 

Plenty of restaurants have agreed to the new terms without consulting Waitr, according to Queen. Those that haven't agreed have been contacted by email.

"There’s no doubt that we understand the importance of our restaurant partners," Queen said. "No protest or demonstration needs to be made for us to understand. We help increase restaurants’ footprints through our service. That’s very evident to us. We like to think that we play a large role in their success as well. We’d like to set aside some time to find out how we can help serve them."

Advocate Staff Writer Timothy Boone contributed to this report.

Acadiana Business Today: Restaurants plan blackout day on Waitr platform in response to company's new terms; Kitchen on Klinton owners to open Franklin location either later this summer or early fall


Email Megan Wyatt at mwyatt@theadvocate.com.