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How to set up an online takeaway business

10 December 2020
How to set up an online takeaway business

From taking online payments to employing drivers, there are a few rules to follow when starting a new venture, says Sarah Earl.

A s operators across the country attempt to serve customers under ever-tighter restrictions, many may be seriously considering what they can do to keep afloat. Providing an online takeaway food service is a great way to reach a new market and maintain customers, with research suggesting that Covid-19 has boosted takeaway orders by 32%.

So how do you start providing an online takeaway service? There are many factors to consider, including how to comply with legal obligations, but here we focus on the online element of setting up a takeaway, as we suspect operators will already be familiar with standards around food preparation and hygiene.

Should I use my own website or an existing food delivery service?

One of the first decisions restaurants need to make is whether to run an independent delivery service or sign up to an aggregator food delivery service, such as Just Eat, Deliveroo or Uber Eats.

Both options have their advantages and disadvantages. Aggregators are great for businesses who may not have the time or funds to set up their own delivery service and website, and allow restaurants to gain immediate access to an existing customer base. However, this does come at a cost, as you will have to pay fees to the aggregator (often in the form of set-up costs and then a percentage cut of all orders).

On the other hand, an independent delivery service offers you greater freedom with how you market your business and may encourage stronger brand loyalty. If you would prefer this route, you will need to be willing to invest time and money in setting up your website, as well as ensuring you comply with all relevant legal obligations.

Do I need to set my own terms and conditions?

If you decide to run your own online delivery service, you need to provide online terms and conditions to customers, setting out the restaurant's and the customer's legal rights and obligations in relation to their order.

These terms should include information about your restaurant (eg, its full legal name and address), the order process, how to make payments and a complaints procedure.

You must also ensure that your customers are provided with all relevant details about their order before they complete any transaction. This includes the total price they will pay (including any taxes and delivery charges) and details of how and when payment will be taken.

You should also provide a privacy notice, explaining what personal information will be collected from customers (eg, name, address and bank details), how you will use this and how you will keep information secure.

How do I deal with customer payments?

If you will collect payments online, you need to be aware of the ‘strong customer authentication' (SCA) rules for card payments. These rules require a customer to authenticate each payment using two of the following methods: something a customer has (such as a mobile), something a customer knows (a password, for example), or something a customer is (such as a fingerprint).

You must keep up to date with the rules on SCA and have implemented the appropriate payment technologies by September 2021.

What about my supply chain?

As you expand to online deliveries, you may need to reconsider your agreements with suppliers or establish new relationships, for example, with companies that provide takeaway food packaging.

It may be helpful to have flexibility in these agreements to allow for changes in customer demand. These contracts should set out what you expect from your suppliers, including details of the services or goods they are providing and any timeframes they are expected to meet.

Should I hire delivery drivers?

You may be able to use your existing team to deliver orders or, for aggregator services, drivers may be provided. Otherwise, you may need to engage additional drivers for deliveries. How these arrangements are set up in practice will determine whether those drivers are considered employees, workers or self-employed as a matter of law, which in turn determines their rights and your obligations and liabilities (including tax) towards them. This is a complex and evolving area, so we recommend that you take legal advice.

Sarah Earl is an associate in the commercial team at Kemp Little


Image: Shutterstock

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Jacobs Media Group is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

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