While business has been booming for the UAE’s food and beverage aggregators over the past two years, restaurants continue to complain about the commission fees they’re being charged – which can reach 35 percent on some platforms.
Coronavirus made the country’s customers comfortable with ordering food to their homes and that demand has not abated since with a report by Redseer Consulting last year indicating that it expects 16 percent of the total food services to be driven by online food orders by 2023, accounting for $3billion in spend.
Within that context, Locale, a UAE-born food aggregator aiming to create a community for local “foodpreuners”, is doing away with third-party fees and setting a minimal fixed delivery charge.
Launched a few months ago and developed by the founder of KRUSH brands (the most well-known of which is Freedom Pizza) Ian Ohan, Locale aims to have a curated offering of 20 home-grown brands on its platform.
With its own fleet of drivers, restaurant brands and in-house tech company, Locale is able to control third-party fees, explained Ohan.
“Locale is the only real alternative to the third-party ecosystem. What we do is we become real equity partners with the brands where we’re aligning our interests on the bottom line. We want to make money together and we will invest accordingly,” said Ohan.
“They also get access to all of our corporate team such as finance, accounting, and learning and development, standard operating procedures, HR, on all of those things. So we don’t leave any fees to third parties, we keep all the money where it should be and we basically are trying to make money on food,” he added.
Locale’s delivery drivers are all professionally trained and work in KRUSH’s restaurants so there is a “utility value for them beyond driving and most of our kitchen managers started off as drivers,” said Ohan.
“We’re not trying to make money on deliveries because we don’t believe food delivery ever was or ever will be a profit centre as evidenced by the third party companies haemorrhaging money at a very large scale. We’re also not trying to make money on our technology since we built it,” said Ohan.
“We don’t do any advertising – it’s all about the good food. We want to align our interests with foodpreuners to create real scalable businesses with full investment going forward,” he added.
How brands are selected for Locale
The latest brand to join Locale’s platform is a Japanese cuisine Itadaku which was preceded by Viking Bageri, the first non KRUSH or partner brand to join the platform.
Asked how F&B outlets are selected Ohan said: “The foodpreuners themselves are the most important criteria for us. We look at if they have a great product, a real fanatical approach to customers and customer service, and if they think they have the same ethos and values that we have around the way we treat, grow and develop our people.”
“They have to be purpose driven so mission oriented where the way they do things is as important as what they do. We also don’t want to have a lot of overlap in each Locale as the idea is that each platform can have different brands, depending on what is relevant for that region. If we launched in Riyadh, for example, we would first work with local partners there,” he continued.
For now Ohan said his focus is on “perfecting” the offering across the UAE before looking at regional expansion.
“We are available throughout most of the UAE now but in the next four or five months, we’ll be building a series of very large multi kitchens which we call light kitchens. There will be 24/7 cameras across all these kitchens and they will be will lit. The idea is that we want the kitchens to be beautiful as they are our stages,” said Ohan.
A late 2021 report indicated that there are 380 brands serving from 70-plus dark kitchen locations in the UAE.
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