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New Delhi, May 27 () Restaurant players have started a dialogue with mall owners to explore new ways of engagement like revenue share model in the post-COVID-19 period, the National Restaurant Association of India (NRAI) said on Wednesday. The NRAI explained that restaurants do not expect the business volume in the post-pandemic period to be more than 30 per cent to 40 per cent of the pre-lockdown numbers. "Considering that the proportion of fixed operating expenses in our business is very high, this may lead to massive operating losses to many businesses unless the expenses are brought down significantly and a critical expense like rentals is converted into a variable cost," it added. The NRAI said it has written to all malls owners that the mandated lockdown has forced restaurants to shut shop and prevented the malls to allow entry to guests, staff or suppliers of restaurants. This is a clear case of force majeure and therefore all charges of rentals or common area maintenance (CAM) for the duration of the lockdown needs to be waived entirely. The industry body has also pointed out that the engagement contours in the post-COVID era needs to move towards a totally variable model. Such revenue-share model will ensure that the fortunes of both parties, i.e., restaurants and malls are firmly inter-linked, the statement said. "While we continue with our advocacy efforts with the Government for strong stimulus packages, NRAI is steadfast in its belief that no business will be able to sustain itself post resumption on older terms of engagement," NRAI President Anurag Katriar said. The industry cannot operate on old costs with less than half of older revenue, he added. "Therefore, I reckon that revenue share is a very fair model that will ensure that malls don't lose out if we see an unexpected early surge in business volumes," Katriar said. NRAI totally understands that the malls too have huge costs to take care of, which is not easy with reduced cash flows. Unfortunately, this is the stark reality for every business, including restaurants, he added. "Most of our members have expressed their unwillingness and inability to restart the business unless these issues get firmly and proactively resolved... I am fairly certain that as long-standing business partners of ours, the landlords will extend their support in these times of unprecedented crisis," Katriar said. NRAI will soon initiate similar proactive dialogues with other stakeholders such as food service aggregators and individual landlords as well, the statement said. AKT MR MR MR

NRAI initiates dialogue with mall owners for revenue share model

After the Indian government made paying service charge in hotels and restaurants optional, there has been a huge cry in the hospitality sector. the <keyword id="146581" type="ORGANIZATION" weightage="20" keywordseo="National-Restaurant-Association-of-India">National Restaurant Association of India</keyword> (<keyword id="92417" type="ORGANIZATION" weightage="20" keywordseo="NRAI">NRAI</keyword>) is clearly not happy with the Centre’s ruling and has cited judicial precedent against making service charge optional. 
 
The NRAI stated customers are free not to eat at a restaurant, if they do not wish to pay the service charge. 
 
NRAI, which represents independent restaurants and chains, said levying service charge was a "common and accepted practice" that was "recognised as such" by various government departments. 
 The government had clarified earlier in <keyword id="6354721" type="ORGANIZATION" weightage="20" keywordseo="parliament">Parliament</keyword> that the authorities could act against those levying a service charge without the knowledge and consent of consumers on charges of indulging in "unfair trade practices". 
 
In a statement issued by the Union consumer affairs ministry it had asked states to ensure hotels and restaurants displayed information that service charge was optional on their premises. The ministry also made it clear that this was being done as it had received many complaints from customers who said they were being forced to pay service charge, in lieu of tips, of anything between 5% and 20% "irrespective of the kind of service provided". 
 The ministry said the <keyword id="407235" type="ORGANIZATION" weightage="20" keywordseo="Hotel-Association-of-India">Hotel Association of India</keyword>, when asked for clarification, replied that a "service charge is completely discretionary" and a customer could have it waived. 
 Defending the levying of service charge, NRAI president <keyword id="366474" type="PERSON" weightage="20" keywordseo="Riyaaz-Amlani">Riyaaz Amlani</keyword> said that restaurants clearly follow the very same Consumer Protection Act that is being used to justify the move to penalise those who levy it without the consent of consumers. 
 
"The act stops us from indulging in any unfair method or deceptive practice. We clearly mention the service charge we levy on our menus. We are not indulging in any unfair trade practice. This is all part of a bill on which the restaurants pay VAT while the employees pay income tax. It also does away with cash tips," he told TOI. 
 Other restraint owner feels that the <keyword id="184317" type="ORGANIZATION" weightage="20" keywordseo="Department-of-Consumer-Affairs">Department of Consumer Affairs</keyword> should have waived the charge instead of leaving matters "ambiguous". 
 
"The diner might say the entire meal was nice but the salad was bad. What are we supposed to do in such a scenario? Most complaints we receive are about higher taxes and not service charge. The government didn't waive taxes but waived service charge that diners happily paid," he told TOI. 
 
However most food entrepreneurs believe, this move by the government wouldn't affect the QSR chains much. 
 
Here's what the food entrepreneurs felt: 
 
 Sagar Kumar, Nutritious Nation, gourmet health food: 
"We never charged a 10% charge to our customers in the first place. It's mostly casual dining cafes, fine dining restaurants and places that serve liquor that'll come under the ambit of consumers questioning why we should pay a mandatory 10% tip when the service isn't upto the mark." 
 
Ashish Tulsian, founder of POSist, a point of sale terminal company for restaurants : 
"This move may affect businesses of restaurants for a shorter period of time. Customers will get benefited as they would have a clarity on charges. For example, biryani costing Rs 200 becomes Rs 290 after taxes. Customers will understand clearly know how the calculation has been made. Though initially the restaurants will decide to hike the prices but in the long run, customers will gain." 
 
Sumit Gulati, Gulati Spice Market: 
"We already had a customer today who came in and declared that he won't pay service charge. Without even experiencing the service, he declined. We need to understand that the intent of the decision is good and for the benefit of the client. However, Delhi is known for its notorious behaviour. The whole reason why service charge came into being is because average people here have poor tipping nature."

Restaurant body fights back, says don’t eat if you don’t want to pay. QSR chains okay with the govt's move

If you’ve complaining about high price of mineral bottles at the movie theatres, the fleecing is going to stop from January next year. The Indian Government has asked companies not to sell mineral water bottles at higher MRPs at airports, malls and cinemas. Under the <keyword id="846883" type="UNKNOWN" weightage="20" keywordseo="Legal-Metrology">Legal Metrology</keyword> (Packaged Commodities) Rules, 2011, companies won’t be able to charge a higher MRP from Jan 01, 2018 onward. "Based on the experience of implementation of the rules and after a detailed stakeholder consultation, the department has amended the rules, aimed at enhanced consumer protection, but at the same time balancing with the requirement of ease of doing business," a statement from consumer affairs department read. There won’t be any dual MRPs on an identical pre-packaged commodity, which is going to benefit consumers at large. However, the rule won’t be applicable for restaurants. "This won't be applicable to restaurants as under GST they come under the category of supplier services. And the latest notification is applicable for retail services where customer buy off the counter," said Rahul Singh, secretary, <keyword id="146581" type="ORGANIZATION" weightage="20" keywordseo="National-Restaurant-Association-of-India">National Restaurant Association of India</keyword> (NRAI). Also, medical devices such as stents, valves, orthopaedic implants, syringes and tools for operations will have to display MRP. "This is to raise awareness, because the customer has a right to know what the prices (of these medical devices are)," Jai Priye Prakash, secretary, department of pharmaceuticals (DoP), told ET. So far, it was not mandatory for all medical devices declared as drugs to make mandatory declarations under the legal metrology rules. Some medical device manufacturers have welcomed the move. "Consumers were facing difficulty as devices were sold according to the paying capacity of the consumer. Even after capping of MRPs, many companies were not displaying (the MRP)," the department of consumer affairs said.

From Jan 1 2018, you’ll pay as per the MRP for mineral water bottles at movie halls, airports

You Searched For "NRAI service charges" and got 3 results

NRAI initiates dialogue with mall owners for revenue share model

PTI

Restaurant body fights back, says don’t eat if you don’t want to pay. QSR chains okay with the govt's move

BI India Bureau

From Jan 1 2018, you’ll pay as per the MRP for mineral water bottles at movie halls, airports

BI India Bureau

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