My $14 Burger Epiphany
Picture this: a Tuesday night, me on my couch, watching The Bear for “research,” when I ordered a burger from one of my favorite local spots.
The total? $23.45.
I could practically hear my wallet cry.
The burger itself was listed as $14 on the menu, but by the time the delivery app finished tacking on “convenience fees”, “service fees”, and “we just felt like charging you fees”, it felt like I was funding the driver’s 401(k).
Naturally, as a restaurant finance guy, I had to dig into this.
I pulled out my laptop, looked up the restaurant’s online menu, and started running numbers.
And what I found was both fascinating and horrifying: that $14 burger that cost me $23 didn’t even make the restaurant $1 of profit.
Breaking Down the Fees
Let’s be honest — delivery apps have completely changed the restaurant game.
They’ve made it easier than ever for customers to order, but they’ve also made it harder than ever for restaurants to profit.
Here’s the anatomy of that $14 burger order:
| Item | Amount | Notes |
|---|---|---|
| Menu price | $14.00 | Base price set by restaurant |
| Delivery app commission | -$4.20 | 30% commission typical for DoorDash/Uber Eats |
| Packaging & supplies | -$0.80 | To-go boxes, napkins, etc. |
| Labor cost | -$2.80 | Time spent prepping and packing |
| Food cost | -$4.50 | Ingredients and kitchen waste buffer |
| Net profit | – $0.30 | Yep. Negative. |
So for every burger sold, the restaurant lost money — but still looked “busy.”
That’s the illusion of delivery success.
Sales volume goes up, but if your margins disappear, you’re not scaling — you’re spinning your wheels in grease.
The Commission Trap
Third-party delivery platforms like DoorDash, Uber Eats, and Grubhub typically charge restaurants 20–35% commissions per order.
For fine dining, that might be manageable, but for most mid-scale and quick-service concepts running on 10% margins or less, that’s a death sentence wrapped in a branded paper bag.
Here’s the kicker: these platforms often discourage lower commissions unless you pay more for “visibility.”
That means if you don’t pay up, you’re buried on page 3 under “People Also Liked: That Guy Across the Street.”
I once advised a restaurant that increased delivery sales by 40% in one quarter — and still lost $18,000.
Why?
Because every sale was going through a platform that took a bigger cut than they realized.
Alternatives: Taking Back Control
The good news is that restaurants aren’t powerless.
There are smarter ways to leverage delivery without bleeding cash.
1. Direct Ordering Systems
Set up your own online ordering system (via Toast, ChowNow, or Square).
You’ll keep customer data, reduce commissions, and maintain brand loyalty.
The key: make it as easy as the apps. (Nobody likes clunky checkout pages.)
2. Hybrid Delivery Models
Negotiate hybrid deals where your restaurant uses delivery drivers only for logistics, not order processing.
That can reduce commissions by 10–15%.
3. Menu Markups
Many operators are now increasing prices on delivery platforms by 10–20%.
Yes, customers notice — but most accept it as “the price of convenience.”
Better to lose one customer than 30% of your revenue.
4. Subscription or Loyalty Models
Encourage customers to order directly with membership perks (like free delivery or bonus menu items).
Think “Prime for Pizza.”
Profitability in a Delivery-First World
If delivery is here to stay — and it is — then profitability must evolve with it.
Here are the key levers you can pull:
| Strategy | Financial Impact |
|---|---|
| Direct orders (vs. third-party) | +10–15% margin improvement |
| Smart packaging procurement | -2–3% cost savings |
| Menu optimization for delivery | +5% customer retention |
| Dynamic pricing by platform | Up to +8% net gain |
Modern restaurant management software can now track profitability by channel — dine-in, takeout, delivery, catering — giving you a clear picture of where your money actually comes from.
You might be shocked to find your “busiest” revenue stream is your least profitable.
A Story of Redemption (and Fries)
One of my clients, a mid-sized burger joint in Florida, used to rely entirely on delivery apps.
Their food was great, their reviews stellar, but their profits were drowning faster than fries in fryer oil.
After a 90-day financial audit, we moved 40% of orders to their own branded app, implemented a loyalty system, and adjusted pricing by platform.
Result?
- Delivery app commissions cut by 60%
- Average profit per order increased by $3.20
- Customer retention grew 22%
They’re still on DoorDash — but now on their terms.
The Psychology of “Convenience”
Here’s what most operators forget: customers don’t just buy food — they buy time.
They’ll pay for convenience, but they’ll also pay for trust.
If you can deliver faster, cheaper, and with a personal touch (no, not like that), they’ll order from you instead of a faceless platform.
The key is owning the relationship.
When someone orders through a third-party app, the app gets the data, not you. That means they can market your customer… better than you can.
In finance terms, you’re renting customers instead of owning equity.
FAQs About Delivery Profitability
Q1: Can small restaurants survive without third-party delivery?
Yes — many are thriving by driving direct orders through marketing, QR menus, and loyalty programs.
Q2: Are delivery apps ever profitable for restaurants?
They can be, if treated as marketing channels rather than revenue streams. Use them to attract new customers, then convert them to direct orders.
Q3: Should I raise prices on delivery apps?
Yes. Always. Adjust your menu to offset commission fees while keeping in-person pricing stable.
Q4: Is ghost kitchen delivery more profitable?
Only with strict cost control and high order volume — otherwise, the math doesn’t add up.
Q5: What’s the average restaurant profit margin on delivery orders?
Typically between 2–6% after commissions — unless you’ve optimized your pricing and costs.
Q6: Will delivery commissions ever go down?
Unlikely. Platforms rely on those margins. That’s why building your own system is the future.
Conclusion: Delivery Without Disaster
Delivery apps aren’t villains — they’re just business models doing what business models do: taking a cut.
The problem isn’t the platforms. It’s letting them run your business for you.
The future belongs to restaurants that adapt financially — embracing delivery as a tool, not a trap.
So the next time you see a $14 burger listed for $23, don’t just groan — smile knowingly.
Because behind that inflated price is a restaurant owner trying to keep the lights on…
and maybe even pay their finance advisor.
External Link:
Read more about delivery economics at Restaurant Business Online’s “Delivery Profitability Report”.
Written by: Robert W. Kuypers
Restaurant Finance Advisors
