B.C. restaurant sues local food delivery app over more than $220K in missed payments

A Victoria-based restaurant is suing a local food delivery app, alleging the company owes them hundreds of thousands of dollars in unpaid revenue.The company has yet to filea response to the claim.

J&J Wonton Noodle House filed a notice of civil claim in June against the owners of Tutti, a Victoria-based food delivery app. The restaurant alleges that Tutti's parent company, KAVL Technology, and its CEO,Kaisa Aierken,owe $220,775 in missed payments between April 2021 andMay 2022.

CBC heard from six other restaurants in Victoria and Vancouver that claim Tutti owes them money, some of whom are also considering legal action.

Clif Leir, who owns Fol Epi Bakery and Agrius Restaurant in Victoria, says between his two businesshe's owed around $4,000.

"I haven't even been sure what to do next it's quite disheartening hearing how much they're owing to other people," Leir said.

Tutti replied to a request for comment via email, saying that they did not want to make a public statement, but that they were working on paying merchants as soon as possible.

Restaurants drawn in by the promise of low delivery fees

Tutti started in Victoria in 2017 and was heralded as a local answer to industry giants like Skip the Dishes and Uber Eats. Customers pay for their food order through the delivery app, which takes a percentage of the total as a fee and then pays out the rest of the money to the restaurant.

But while many of the popular third-party services charge fees of up to 30 per cent, restaurant owners told CBC that Tutti was attractive because it charged less than half that amount: between 10 and 15 per cent a huge difference for businesses dealing with labour shortages and rising food prices.

"In food service, everyone's just scrambling to keep up with daily operations, staffing shortages, everything that's going on right now,"Leir said.

When Tutti initially approached Eric Moon, owner of Sushi Field, which has two locations in Greater Victoria, he was drawn in by their low fees.

"We aredepending so much more than 50 per cent of our services from delivery companies,"Moon said.

As a small business owner, Moon works as his own bookkeeper and accountant to keep costs down. When he went to do his taxes, he realized that payments from Tutti hadn't been coming in for almost a year. Moon said they had paid up once, and then stopped. He claims the total sum owed between both restaurants is around $20,000.

"It's all basically one month's paycheck to all employees," Moon said.

He reached out to the company and said he was told they were having accounting issues. A few weeks later, they sent two cheques. Moon said one was for $1,000, which he cashed. He said the second one, for $300, bounced. He says he hasn't been able to reach them since and has cancelled the service and is considering seeking legal advice.

Despite the numerous allegations of missed payments, Tutti has continued to expand. Itswebsite claims it operates in Chilliwack, Maple Ridgeand Squamish.

Tutti recently launched in Vancouver, where Chickpea Restaurant owner Itamar Shani began using its service. After receiving a call from CBC News, he checked his bank statements and said he discovered he'd never received a single payment since he signed up in April.

"I'm feeling, like, hurt deeply. It's like somebody's taking advantage. It's very hard for me to understand.I don't know. How can I even respond to this?"