Restaurant catfishing

A.k.a who owns the customer?

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Restaurant catfishing

Every time you use a food delivery app like Chowdeck, Glovo, or Swoop, the technology works so well that you don’t have to think about it. You want food, you know the restaurant exists, and you cannot be bothered to leave your chair/bed.

Somewhere in this arrangement is the assumption that the food delivery platform has an active relationship with the restaurant and that the food you receive comes from the restaurant you selected. It’s reinforced every time you walk into that same restaurant and see dispatch riders with their branded t-shirts picking up orders.

That arrangement has recently become a matter of public debate.

Three times in the last six months, Nigerians on social media have experienced collective panic over what can only be described as “restaurant catfishing,” the strange idea that the restaurant you’re ordering from may not be the restaurant.

The first two times, there was an impostor. In December, Corporate Ewa alleged someone had registered its name on Glovo and was buying food from roadside kitchens near Ojuelegba to fill orders, with one customer reporting food poisoning. Glovo delisted the account and promised an investigation.

In May, Techpoint built a fictitious restaurant, registered it on Glovo and Chowdeck, and got an order out the door before either platform flagged it. Both incidents are fraud. Fraud is easy to get upset about, and because it has a villain, the obvious fix is to check who you are onboarding/fix your KYC process.

Norma was the third time, and here, there was no impostor.

On May 28, the Lagos suya spot asked Chowdeck to remove its name, logo, and menu because it had never agreed to be on Chowdeck. How did customers receive orders from a restaurant that hadn’t consented to listing on Chowdeck?

The explanation came this week with Chowdeck clarifying that an agent it calls a shopper stands near popular restaurants, buys the food a customer ordered through the app, and hands it to a rider, no agreement with the restaurant required.

To clear up the confusion, it will now add badges — Verified, Awaiting Verification, Shopper — so you can tell a partner from a shop Chowdeck is merely buying from. Chowdeck framed it as a vulnerability in a system built to support small businesses.

The most obvious question, which many publications have asked (not a bad thing!), is “Is it fair to make a business carry the reputational risk of a listing it never approved?”

But assisted fulfillment, a.k.a. using a shopper, is not really a question of fairness to restaurants because, at face value, the restaurant loses no money.

But money isn’t everything. Restaurants whose items get delivered without their consent have no control over delivery temperature, food handling, or timing. There’s also the reality of customers blaming the restaurant for a bad delivery it never authorized. It’s entirely possible to lose significant brand equity because of a delivery process it has no control over.

Every order Norma didn’t consent to fulfill builds Chowdeck’s ratings and retention. Fast-growing restaurants, like Norma, which launched its fifth location last year, that are worth taking these customers from are exactly the ones with enough pull to refuse to list on Chowdeck.

But assisted fulfilment is cheap customer acquisition for a wannabe super-app because the brand that’s pulling the customer’s attention belongs to someone else. So, the Shopper badge isn’t protection for the restaurant, and it’s not because anyone cares about small businesses. It’s Chowdeck’s claim on a Norma customer that Norma will never meet.

Norma keeps the full counter price of every catfished order because it pays no commission and runs no promotion. A restaurant that actually signs with a food delivery service will pay for the privilege of demand generation.

When Lucky Boy, a Pasadena burger stand, sued Postmates in 2021, it set the commission at roughly 30% of every order.

On a per-order basis, the shopper model is bad: Chowdeck collects no commission, pays a shopper’s time, and floats cash to buy items at full counter price. It only works when you accept that the food is the cost of acquisition and the customer is the asset.

This makes the list of catfished restaurants a proxy for Chowdeck’s leverage. The unconsented restaurants are a map of the supply Chowdeck has demand for but cannot get under contract. While conventional wisdom about delivery apps is that they aggregate demand and restaurants compete to supply it, the Nigerian restaurant market is small enough that the demand sits with the brands, and the food delivery apps end up competing. Case in point, all delivery apps have a rotating cast of deals with Chicken Republic and The Place, suggesting the leverage these big franchises have.

American food delivery startups ran this assisted play on the way up, and the way it played out is a cautionary tale.

In 2015, In-N-Out sued DoorDash for delivering its burgers under an imitation of its logo after being told to stop. Lucky Boy said Postmates posted wrong prices under its name, told customers it was closed when it was open, and steered people searching for Lucky Boy toward restaurants that paid. Grubhub built much of its catalogue this way; the FTC found last year that as many as half its listed restaurants, up to 325,000, were there without consent, that it tended to remove them only when threatened, and that it treated the listing as a lever to sell a partnership. The penalty was $140 million, but Grubhub eventually paid $25 million because that’s all it could afford. Is there a Nigerian In-N-Out with the standing and appetite to sue, or an FCCPC with the appetite to act as the FTC did?

The delivery platforms had compelling incentives to “steal” the customer. DoorDash did not post a profit as a public company until late 2024, and it got there on scale built largely in these grey years of assisted fulfilment. Delivering food is a bad business.

“The economics are tough in this market because the costs are very high and there is plenty of competition, so there is downward pressure on the commissions that we make and upward pressure on marketing costs because everyone is fighting for customers.” - Francis Dufay

Which is why you see a lot of these platforms talk about building super apps. They open dark stores, buy a startup that sells inventory software and hardware, all to one end: owning the relationship with the customer.

You could argue the relationship isn’t worth much yet and that in a market this thin, assisted fulfillment is scrappy catalogue-filling rather than a land grab.

But that objection answers itself. Assisted fulfillment is only worth the legal and reputational exposure to someone who already believes the customer is the prize, which is pretty much the super-app thesis. Chowdeck is wagering that the relationship it is building on Norma’s name will be worth more than the strain of the brand pushing back or going to court.

The tipping point came on May 28 when Norma, an popular Lagos suya spot, publicly demanded that Chowdeck remove its name, logo, and menu, stating it had never agreed to be listed on the platform. Was restaurant catfishing becoming a trend?

It was not quite that. One week after Norma’s notice, and nearly a month after the Techpoint investigation, Chowdeck responded with an explanation that changed the terms of the debate entirely.

The startup said that one of the prongs of its business model is “assisted fulfillment,” a practice by which Chowdeck lists popular restaurants on its platform and fulfills orders from those restaurants on behalf of customers, without having a formal agreement with the restaurant itself.

With Norma’s public demand, Chowdeck will now use labels so customers can identify verified restaurants and differentiate them from restaurants Chowdeck has listed independently to “assist fulfilment.” Ergo, if your restaurant is popular enough among customers, Chowdeck may send riders to pick up items from you anyway, even though you have no interest in being listed.

This clarification may satisfy customers, but it raises far more unsettling questions for restaurant owners.

If a customer has the right to pay a personal assistant to stand in line at a local spot and buy food on their behalf, a platform is arguably just scaling that basic transaction. And as high inflation squeezes restaurant margins, these unpartnered listings represent zero-to-low-cost demand generation. The restaurant still receives 100% of its asking price at the counter.

A business that has spent years cultivating a reputation, managing quality, and building trust may appear on a major food delivery app without its knowledge. The brand equity the restaurant has built essentially becomes a free marketing asset for a third-party aggregator that has positioned the vendor’s brand identity in a way that could mislead some 2 million people to assume brand affiliation.

Chowdeck may point out that under terms and conditions, it states that the platform is not affiliated with the vendors on it and “makes no representation of having an existing relationship, engagement or commitment with any of the restaurants.”

The language is precise. At some point after 2022, Chowdeck revised a clause in its terms from “Chowdeck may not be affiliated or have any form of partnership with these restaurants” to “Chowdeck is not affiliated with or has any form of partnership with these Vendors.”

Whether this insulates platforms from liability is a separate question from whether it should. A business’s registered trademarks, name, and logo enjoy protections under Nigerian law that a platform’s terms of service cannot simply override. Scraping a restaurant’s menu, reproducing its branding, and delivering food under its name to paying customers sounds like something that should be tested in court.

In the United States, DoorDash, Grubhub, and Postmates built significant portions of their early valuations on this type of grey area. In 2015, In-N-Out Burger sued DoorDash for listing its trademarks after explicitly declining to partner with the platform. In 2021, a burger stand called Lucky Boy settled a lawsuit against Postmates, which had listed it without authorization, published incorrect prices, and redirected organic searches for Lucky Boy to paying competitors when the restaurant refused to sign a contract.

Grubhub, the oldest of the lot, operating since 2004 as a highly profitable software marketplace for partnered restaurants, initially shunned this practice. It heavily criticized rivals for forcing unconsenting restaurants into a broken workflow. Because apps were blind to real-time kitchen inventory, the model allowed order delays, random price markups, and cold food. Restaurants suffered severe brand damage through no fault of their own. On the other hand, for these delivery platforms, it was also more expensive than Grubhub’s pure-software play as they now had to employ gig workers who had to act as customer proxies—manually placing orders at the counter while dodging restaurant owners who banned them to protect their reputations.

Yet, as newer rivals weaponized independent gig networks to scoop up market share, Grubhub was forced to capitulate. In a pivot, the company announced it would list 150,000 non-partnered restaurants to chase its competitors, while simultaneously admitting the practice was fundamentally broken. It did not end well. California outlawed unconsented listings entirely in 2020. The FTC ordered Grubhub to pay $25 million and stop the practice in 2024. A separate class action from the restaurants themselves settled for $7.15 million shortly after.

If historical precedents demonstrate why unconsented listings are a dangerous gamble, why is Chowdeck making choices that could backfire so spectacularly?

The desperation behind assisted fulfillment reveals the shaky assumptions underlying the food delivery industry.

They are low-margin, operationally bruising street fights. Global pioneers that have scale and billions in volume, DoorDash and Uber Eats routinely squeeze out a measly 0% to 2% operating margins. They burn nearly every dollar they touch on customer acquisition and driver subsidies. When you transpose these fragile economics to Nigeria, a macro environment defined by volatile fuel prices and a consumer base with diminishing disposable income, the math looks bleak. The exact moment competition intensifies, with the entry of new players like Swoop, which raised $7.5 million almost the same as Chowdeck’s series A raise, for instance, a platform’s leverage evaporates. Restaurants can demand lower commission rates because they know they can jump to a rival, while marketing and driver retention costs skyrocket.

From this perspective, assisted fulfillment is a desperate play for supply control. It allows platforms to lock down popular vendors without paying the premium typically demanded by brands with significant market leverage.

This comes down to brutal unit economics. A formal partnership with a major restaurant requires co-promotional marketing deals, revenue-sharing arrangements, and ongoing merchant infrastructure.

Assisted fulfillment, by contrast, costs the platform nothing more than a rider whose delivery fee is already covered by the buyer. The margin difference, compounded across thousands of listings, is highly attractive. The catch, however, is that this model does not scale cleanly; no matter their traction in Lagos, platforms have to pull the same high-wire stunt from scratch every time they expand to a new city even within the same country.

Ultimately, it is worth casting a suspicious eye on any business model where aggressive extraction is the only viable strategy for scaling. One might argue that forcing platforms to secure explicit consent is too costly in a market where restaurants are already scarce.

After all, while Western food delivery apps scale effortlessly by tapping into mature, dense ecosystems like the United States—where restaurant sales are projected to hit $1.55 trillion—the entire African food delivery market sits at a modest $9.8 billion.

Giving vendors a chance to say no might shrink listings and stunt a platform’s growth. But a fundamental question remains: is it fair for independent restaurants to bear the operational brunt and reputational cost of a tech platform’s expansion without their consent?