Food and Beverage (F&B) Business in Gurgaon

As per latest tech trends, when food meets technology to reach the customers, it is termed as Food Tech startups. In a city like Gurgaon, food startups have significant advantages as it is one the hottest place in India to launch a food business. With multinational crowd, demand for new options for food is ever increasing and on-demand (home delivery) provides immense convenience to end-users.

Originally published here.

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Online Food Startup: Business Model

Latest companies and startups in F&B space are establishing innovative business models. For example, kitchen in the cloud model embodied by FoodPort allows players to run their own kitchen instead of outsourcing or aggregating.

Another category is aggregators, which is well known due to the likes of Zomato and Swiggy. In this model, the aggregators provide interactive web-based platforms and mobile apps to users to connect with restaurants. Such interaction provides a diverse range of options, including managing the listings, taking food orders online, food delivery, etc.

Paradigm Shift

Traditional food stores are changing their business model completely from offline to online due to high rentals and unbearable maintenance costs. For example, Buenowhich had an outlet in DLF CyberHub (CyberCity), recently shifted to an online food company model.

Angel Investment & Venture Capital Funding

Food tech startups are buzzing with funding news in recent past. For example, InnerChef, a food-technology company based in Gurgaon, recently announced pre-series A funding. InnerChef delivers ready-to-eat and ready-to-cook meals by providing an online fresh food delivery platform offering fresh paninis, salads, combos, snacks and desserts throughout the day.

Business Validation

Due to huge corporate base, Gurgaon is largest market in India for customer validation and although numerous food tech startups have received angel funding and influx of venture capital investments, only a few will survive in future because the market is all set for consolidation.

Food Startups and Law

There are some crucial legal considerations associated with food business and appropriate measures are required to minimize the risk / liability. Specifically, to launch and grow a food startup / business quickly, it would require formulating strategy to handle potential issues relating to corporate law, employment law, intellectual property rights, and taxation.

Initial steps to start a food tech startup include determining an appropriate corporate structure by incorporating a legal entity (private limited company, partnership, OPC, LLP etc.)

With a view to have clarity regarding management roles, co-founders agreement (shareholders agreement) should be executed having detailed provisions for role of founders (directors or promoters), commitments, cash investments, shareholding pattern, vesting schedule, lock-in period, dispute resolution mechanism, and exit procedure. This helps in smooth functioning of business. Similarly, appropriate contracts, agreements and legal documents should be executed with Investors, manufacturers and third party vendors.

Intellectual Property (IP) ownership should be clearly stated in all documents and agreements. As a standard practice, all IP rights (patents protecting technology, trademarks protecting brand names and copyrights protecting other artistic works) should generally be owned by the company.

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Rahul Dev is a Patent Attorney & International Business Lawyer practicing Technology & Corporate Laws. He is reachable at info (at) techcorplegal (dot) com &@rdpatentlawyer on Twitter

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