CloudKitchens, the ghost kitchen startup led by former Uber CEO Travis Kalanick, has drawn scrutiny for its secrecy and for clashing with restaurant operators.
Now, a CloudKitchens platform called Picnic is embroiled in a legal drama with Mixt, a Bay Area healthy dining chain with over a dozen outlets. Picnic delivers restaurant meals to office workers free of delivery fees, launching last year.
In December, Mixt sued Picnic in the US District Court for the Northern District of California, alleging the platform resold its salads without permission and listed them “well below” its real prices. Picnic didn’t file a response to Mixt’s claims; it requested the case be moved to private arbitration, and the court granted the motion in January.
In the lawsuit, Mixt says that Picnic exaggerated its salad prices to make ordering on Picnic seem like a better deal. Mixt says that violates its terms of service and is seeking unspecified damages.
Mixt also contended that Picnic imperiled its health-conscious clientele, alleging in the suit that when it ordered one of its own salads from Picnic, it was delivered at an unsafe 70°F or roughly room temperature.
“Picnic is putting customers at risk and further damaging Mixt’s reputation as a healthy restaurant,” Mixt’s complaint said.
In a statement, a Picnic spokesperson told Business Insider that it is “suing” Mixt and that the salad chain’s claims are “fraudulent.”
BI could not find a record of a lawsuit from Picnic against Mixt in federal and state records, and Picnic didn’t respond to a follow-up question about it. It’s not clear if the suit has been filed yet, or if Picnic is referring to the ongoing arbitration.
The Picnic spokesperson added that its customers “preferred Sweetgreen by a large margin” over Mixt.
“In light of that and other issues, we have decided to not pursue working with them,” the spokesperson said.
Mixt and Sweetgreen didn’t respond to requests for comment.
CloudKitchens’ valuation reached $15 billion in late 2021, Business Insider previously reported.
Investors include the government of Saudi Arabia, which poured $400 million into the company in 2019, and Microsoft, which invested in 2022, the Financial Times reported.
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