Travel Food Services Ltd., on Thursday, September 4, said it has issued a notice to terminate the extended arrangement for providing its access services for the lounges it operates, to the customers of Dreamfolks Services Ltd., from September 15, 2025.
This follows another announcement made on August 29, when Adani Digital, Semolina Kitchen and Encalm Hospitality indicated their intentions to discontinue certain services.
Tried re-negotiating agreement, says Travel Food Services
Travel Food Services in its exchange filing, said it was entitled to provide access to its operated lounges for the eligible customers of Dreamfolks, in accordance with the terms and conditions set forth in the agreement that was executed on July 1, with the effective date being April 1, 2024.
It also had an extended arrangement to provide services to Dreamfolks customers after the expiry of the said agreement on March 31, 2025.
Dreamfolks was acting as one of the aggregators for banks and networks, in relation to lounge access services for various lounges operated by Travel Food Services.
The company said that despite efforts to re-negotiate the commercial terms of the agreement in good faith with Dreamfolks, they were unable to reach a closure.
Travel Food Services added that through its wholly-owned subsidiary, Eliteassist Technology and Services Private Ltd., it has already initiated direct engagements with banks and networks. Hence, the termination of the agreement with Dreamwolks would not have an impact on its business operations. “This strategy will help Travel Food Services to embark upon a new phase in the fintech evolution so as to enhance the efficiency of the services provided to its customers,” it added.
Dreamfolks’ August 29 stock exchange filing
Meanwhile, Dreamfolks, as per its stock exchange filing on August 29, said the suppliers Adani Digital and Semolina Kitchens were looking at terminating certain services from September 15, while Encalm Hospitality had set November 1 as the effective date for the same.
Dreamfolks had said it formally responded to these communications and had sought reconsideration of the continued supply of the services, and the discussions were underway.
With regards to Encalm, Dreamfolks said it filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996, seeking interim injunctions at the Delhi High Court.
The services with the three companies were ongoing, uninterrupted and the contracts remained active, while Dreamfolks said it continued to engage with them to safeguard relationships and was working on other customer value propositions.
“In the event of discontinuation of airport lounge services by above named suppliers, the company may experience a material impact on its operations and financial performance,” Dreamfolks said on August 29.
Dreamfolks added that it has “strategically accelerated its focus on global lounge business while actively repositioning towards diversified and sustainable offerings, thereby ensuring long-term value creation for clients and stakeholders.”
Dreamfolks Services’ claims of pressure tactics
Dreamfolks Services had recently claimed pressure tactics by two large airport operators that have entered the same line of business.
“The pressure which has been built up is to tell the clients that, in case they do not sign up with them or do business with them directly, they would actually stop their cardholder access to their airports,” the company’s CEO and chairperson Liberatha Peter Kallat told CNBC-TV18 in an exclusive interview in July 1.
Her comments came after Dreamfolks had informed the exchanges that certain lounge access programmes for Axis Bank and ICICI Bank had been discontinued, even though contracts with both of them were active.
Kallat also made it clear the Dreamfolks was not expecting any backing from regulators. “We are a very small player in this market… and I don’t feel that any of the authority would be supportive for us, for obvious reasons, and that’s why we have actually not been to anyone, and we have not asked for any support,” she said.
Dreamfolks Services shares in Stage 1 of ESM
Shares of Dreamfolks Services have declined 41% from July 1. After Kallat’s exclusive interview with CNBC-TV18, the stock declined 34.8% cumulatively for 10 straight sessions and also declined 48.2% to hit its 52-week low of ₹123 per share on August 2. It is now also in stage 1 of Enhanced Surveillance Measure (ESM) framework.
The stock ended the previous session 0.3% up at ₹140 apiece, which is up 13.8% from its 52-week low. It has declined 64.7% in 2025, so far.
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