Restaurant Next on Demand: Debating Delivery Models
As restaurants lean into off-premises for the foreseeable future, many are looking at ways to boost the bottom line.
From third-party to hybrid to in-house delivery channels, Native Delivery Rising panel -- now streaming on demand at Restaurant Next -- featured three executives sharing their insights on how to best navigate the complex world of delivery.
Wing Zone has been offering in-house delivery since it launched 27 years ago, explains Matt Friedman, CEO and founder, and now offers in-house delivery and third-party delivery at its 70 restaurants.
Is Third-Party Delivery Worth It?
When the third-party delivery fees creep up to 30%, the question becomes: Is third-party delivery profitable and worth it? But third-party tech platforms help brands market to new customers and capture additional revenue. Delivery providers have their place in the marketplace, says Friedman, and may be the right decision for restaurant brands looking for additional exposure.
For those operators considering adding in-house delivery, Friedman advises operators to consider: "insurance, how you are paying people, and it enhances your labor force. For us we like to control the experience; the best way to do that is to have a direct relationship with the consumer.”
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Chris Demery has worked with Domino’s Pizza and Bloomin’ Brands and is now P.F. Chang’s SVP Off-Premises Dining. When it comes to third-party delivery, “The customer chooses," he says. “They have to be able to order third-party if they want to do that, but if you can do self delivery … you can enhance that customer experience. Your job is from a customer satisfaction perspective is to make them happy. I tell my leadership we have to do both."
Restaurants need to get down to brass tacks before making the leap. Skip Kimpel, CIO of 4R Restaurants and TechChef podcaster, made the leap from hybrid to owned delivery, “All restaurants out there need to consider multiple different models and use tools to help them calculate profitability for each one ... RTN (Restaurant Technology Network) helps with the TCO Calculator; it’s something I wish I would have had three years ago,” said Kimpel.
Double Your Staff: “You can’t just limp into it. You need to double workforce,” says Friedman. Half of Wing Zone’s employees are delivery drivers, which he calls “waiters on wheels.”
In-house or self-delivery requires an investment in labor. Over the years he’s tried to reassign drivers to other roles in the restaurant. For Wing Zone, that has not worked. Drivers want to drive and make money. It’s about tips and volume, he says.
Volume Matters: Locations need to have 40-50 deliveries per week to start making money, says Demery.
A System That Works: Have a POS system that can handle delivery, advises Friedman. “There are very few out there.”
Ramp Up that Local Marketing: “If your customers don’t know you're delivering, you are not going to have the volume,” says Demery.