Munchery.com, the $300 million dollar food delivery service, has been selling meals direct to hungry New Yorkers for months.
The problem is, the business wasn’t technically allowed to.
According the New York City Department of Health and Mental Hygiene, Munchery was granted a “non-retail” food processing permit in May.
The permit prominently says “wholesale food establishment license,” meaning Munchery should have been doing business with other businesses – not individual customers.
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Despite the ban on retail business, Munchery has been selling meals, including Thanksgiving dinners this week, directly to members of the public.
Allie Mack, a spokeswoman for Munchery said the company is dedicated to staying in compliance with health regulations and that as soon as Munchery learned of the need for a permit change, they filed for it.
“The Department of Health is completely aware of the nature and nuances of our business, with all inspections resulting in successful licensing,” Mack said in an email to the I-Team. “Munchery has, and will always work hand in hand with the NYC Department of Health and city government to obtain proper permitting.”
It is not clear whether the wrong permit was issued because Health officials misinterpreted their own rules or because Munchery supplied incomplete information during the application process.
Article 81 of the NYC Health Code says a non-retail facility prepares food “not given or sold directly to the consumer.”
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Only restaurant permits allow food businesses to deliver prepared meals directly to individuals.
City health regulators did not provide an explanation for how the wrong permit was issued.
In an emailed statement, the DOH suggested delivery-only ventures are a new business model.
“Over the years the public has brought to our attention new ways food services establishments are offering food to consumers," the DOH said. "As the food services industry evolves, the Health Department has continued to keep pace with these changes by amending our permitting requirements to meet business needs and protect consumer health and safety.”
The result of issuing a non-retail permit – instead of a restaurant permit - is more than a labeling mix-up.
Because non-retail kitchens are not given restaurant grades, customers have not been able to easily check up on sanitary conditions in Munchery food facilities.
On Monday, after the I-Team inquired about the status of the Munchery permit, a health inspector evaluated a Munchery fulfillment center on 3rd Avenue in Brooklyn.
The inspector found the warehouse where orders are processed didn't have a proper sink, a critical health code violation resulting in 28 inspection points. Left unaddressed, the sink violation would have resulted in a "C" restaurant grade, the worst letter grade the city hands out.
Munchery customer Marc Phillips said it concerns him that permit problem allowed Munchery facilities to bypass the restaurant grading system.
“I think in customers’ minds you think of Munchery like any other kind of restaurant in New York,” Phillips said.
“It certainly would be good to know that they’ve passed inspections and they do have letter grades, just like a restaurant,” said Terry Cooper, another Munchery customer.
Mack said the fulfillment center sink is being replaced over the holiday weekend and stressed no actual cooking of food happens at that Munchery facility. Two other Munchery facilities were inspected after the I-Team inquiry and they received inspection points equivalent to “A” restaurant grades, the highest the city gives out.
Munchery isn't the only startup food delivery service the I-Team found operating under the wrong permit. Maple.com, a company that delivers meals in southern Manhattan, was also issued a non-retail permit, which prohibits the sale of food direct to consumers.
A.C. Betts, a Maple spokesperson, said the business is quickly applying for the proper restaurant permit.
“The DOH recently asked us to re-file as a retail business, and we did so immediately,” Betts wrote in an email to the I-Team. Of our three locations, one has been inspected and earned an A grade, and the other two, which were also previously inspected, are being re-inspected as part of the routine process that follows any filing change.”