The "Napkin Math" Trap

Many owners calculate profit using a simplified formula: Sales - Food Cost = Gross Profit. On a $50 order with a 30% food cost ($15), you assume you made $35. That sounds like a healthy margin.

The "Delivery Reality" Math

Now, let's look at the actual numbers once a third-party app gets involved.

• Order Value: $50.00

• Food Cost (30%): -$15.00

• Packaging: -$2.50

• App Commission (30%): -$15.00

• Transaction Fees: -$1.50

• True Gross Profit: $16.00

You went from making $35 to making just $16. That is a 54% reduction in your margin. And critically, that $16 still has to cover your rent, utilities, labor, and insurance. For many restaurants, once you factor in overhead, you are actually paying for the privilege of feeding people.

How to Fix the Leak

You need to know your numbers cold. If the margin isn't there, you have two choices: raise your prices significantly on apps (which risks alienating customers) or move those customers to a commission-free ordering system. By taking control of your delivery channel, you eliminate the middleman and restore your margins to healthy levels.

Get the Guide: Stop Paying Delivery Fees (Step-by-Step for 2025)