Restaurant · Guide Updated July 2026

How Restaurants Can Make 20% More Profit by Cutting Third-Party Delivery Fees

Third-party delivery apps take up to 30% of every order you process through them. That is not a marketing fee you can afford forever. Here is a concrete, numbers-first breakdown of how to stop subsidising those platforms and start keeping that money yourself.

Why Third-Party Delivery Apps Are Your Biggest Profit Problem Right Now

The four major costs eating a restaurant alive are labor, cost of goods sold, rent, and third-party delivery commissions. The first three you expect. The fourth one crept in and now it is just as damaging.

Here is the honest picture of the relationship: you love these apps because they hand you delivery logistics on a plate, expose you to customers who would never have found you otherwise, and generate real revenue. But revenue is not profit. When a platform charges up to 30% commission, and your restaurant is already operating on slim margins, that revenue can actually cost you money.

Every operator I have consulted with has the same reaction to third-party apps: they hate them. That is the universal sentiment. Which is why I treat them as a short-term marketing tool, not a long-term business model. Use them to acquire customers and collect their data. Then bring those customers onto a channel you own and control.

The Math: What 30% Commission Actually Costs You

Let me make this concrete with a simple example. Call the restaurant Wilson’s Wings.

Wilson’s Wings receives a $100 order through a third-party app. Roughly $30 of that goes to the platform covering their transaction fee, commission, and delivery handling. Wilson’s Wings receives $70 back. Out of that $70, you still need to cover food cost, labor, and rent. There is very little left.

Now run the same order through Square Online’s on-demand delivery feature instead.

Wilson’s Wings receives the same $100 order. Square Online charges $1.50 per transaction. The delivery itself is handled by a third-party fleet at a base rate of $4.20 plus $0.75 per kilometer between your restaurant and the customer. If the customer lives five kilometers away, that delivery fee works out to $7.95. ($0.75 x 5 + $4.20 = $7.95.)

The platform commission is gone. You are now deciding what happens with that $7.95 delivery cost, not handing it over as a fee on top of everything else.

How Do You Handle the Delivery Fee? You Have Three Options

This is where you take back control. Square Online gives you three ways to structure the delivery fee.

Option 1: Pass the full fee to the customer. The customer pays the $7.95. Wilson’s Wings keeps $98.50 after the $1.50 transaction fee. You cover food cost, rent, and labor from $98.50 instead of $70. The difference is 40% more money retained per order.

Option 2: You cover the delivery fee yourself. Wilson’s Wings keeps $90.55 after the $1.50 transaction fee and the $7.95 delivery cost. Even covering delivery yourself, you are still significantly ahead of the $70 you were keeping with the third-party app.

Option 3: Split it. Cap what the customer pays, say $5.00, and you absorb the remaining $2.95. Wilson’s Wings keeps $95.55. The customer feels taken care of. You still keep far more than you would through a commission-based platform.

The hybrid option opens up a useful tactic: waive the delivery fee entirely when a customer orders above a certain threshold. Set that threshold at, say, $100 and you are incentivising larger orders. Your average order value goes up, which gives you more margin to absorb the delivery cost anyway, and the customer feels rewarded. Everyone wins.

What Does This Look Like at Scale?

One order saved is a small win. But this compounds fast.

If Wilson’s Wings does $60,000 in monthly sales and uses a conservative 20% savings estimate by switching away from commission-based apps, that is more than $12,000 back in the business every single month. Over a full year, that is more than $144,000 that was previously going to a platform and is now yours.

That number is not hypothetical. It is straightforward math on the commission differential. The on-demand delivery model eliminates the percentage cut and replaces it with a flat fee structure you can plan around.

Why You Own the Customer Relationship Now

The commission fee is the obvious win, but the customer data is the one that compounds over time.

When a customer orders through DoorDash or Uber Eats, that customer belongs to the platform. You cannot message them. You cannot tell them about a new menu item, a promotion, or your brand story. If that platform changes its algorithm or raises its fees, you have zero recourse because you have zero relationship with your own customer.

When the order comes through your own website, you own that data. You can reach out directly. You can share promotions, announce new products, and build a brand that customers actually feel connected to. A restaurant with a loyal, direct customer base is worth significantly more if you ever decide to sell it than one that depends entirely on third-party platforms for visibility.

I built 720 Sweets from one shop to seven locations and eventually sold it. One of the things I wish I had during those years was a tool that let me handle delivery without surrendering either the commission or the customer data. Both matter.

Three Steps to Get This Running in Your Restaurant

First, set up your own online ordering with on-demand delivery enabled. The setup is free at the baseline level, meaning no monthly subscription to get started, and the site renders cleanly on mobile, which is where the majority of your customers are browsing anyway.

Second, decide your delivery fee structure before you go live. Work through the three options above with your own numbers. Know your average ticket, know your average delivery distance, and set a policy you can communicate clearly. Guessing at this after launch creates confusion with customers.

Third, tell your customers loudly and often. Post it on your social channels. Put a card in every in-store order. Send a message to everyone who has eaten with you before. Tell them you now take orders directly from your own website and delivery is available. Customers already know the third-party apps are expensive. Many of them want to support you directly. Give them the way to do it.

The Bottom Line

Third-party apps are a customer acquisition tool, not a long-term revenue channel. Use them to find customers, then move those customers to a channel where you keep the margin and own the relationship. The numbers are not subtle: saving 20% on a $60,000 monthly revenue base is more than $12,000 a month staying in your business instead of going to a platform. Run your delivery like a business owner, not a passenger. Your restaurant’s profit margin is yours to protect.

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