Smaller Restaurants Grapple With the Burden of Delivery Service Fees

Independents and mid-sized chains are very reliant on delivery companies, as they are too small to launch delivery channels of their own, and a failure to offer the channel would result in large amounts of missed revenue and new customers.

Third-party food delivery business services are becoming a topic of concern for independent restaurants and mid-sized chains looking to grow their nascent off-premise segments as they team up with the likes of GrubhubUber Eats, and DoorDash.

Delivery apps are known to bring in new customers, provide marketing, and handle the logistics of getting orders to customers for restaurants that cannot afford to launch their own delivery platforms. The downside is frequent complaints from at-home diners receiving food late, cold, or outside of packaging.

Equally as concerning for restaurants are service fees that can reach upwards of 30 percent of final customer checks, which can have a serious impact on operators’ profit margins. Larger chains have the benefit of negotiating down service fees by entering exclusive partnerships with delivery companies. They also have much higher order counts that lessen the blow of the fees they do pay.


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