HomeFlores NewsAccountingThird Party Delivery Services helped keep restaurants alive during the COVID19 lockdowns, but how do they really impact the operation?

Third Party Delivery Services helped keep restaurants alive during the COVID19 lockdowns, but how do they really impact the operation?

  • July 7, 2020
  • Posted by: FLORES
  • Categories: Accounting, COVID-19 Q&A
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Third Party Delivery Services helped keep restaurants alive during the COVID19

Many restaurants utilized 3rd party delivery services to keep their businesses open and serving customers.  Although it has helped some restaurants stay open, the costs cut into margins deeply and may even made the effort not worth it.

Here are three things to consider when deciding to use 3rd party delivery services:

  • You need to be aware of how much the 3rd party service is charging you, some charges can be as high as 30%. If you add Labor, Food, and Beverage and Facilities cost into this mix you may find yourself underwater on these orders.
    • In the past, this extra cost could be seen as marketing costs with the hope that someone who tried your food via delivery will come into the store to make your regular margin.
      • Covid19 is causing customers to come in less and thus this cost is becoming unsustainable
  • Some owners are providing their own in house delivery. Remember to take a look at how this will impact your worker’s compensation insurance rates.
    • In-house delivery drivers have a higher rate applied than regular restaurant staff.
  • Try and negotiate your price down and check for local companies providing delivery for less. There are some smaller companies popping up that are charging more sustainable fees.

FLORES is committed to providing employers with updated information as well as assist with all business Consultation and Administration regarding COVID-19 and its impact on the workplace. FLORES also ensures you are one step ahead in being compliant and thus avoiding unnecessary legal fees.

This checklist is designed to assist with your strategy, but it should not be relied on or substituted for company-specific advice from your employment counsel.
As you are aware, things are changing quickly and there is no clear-cut authority or bright line rules. This is not an unequivocal statement of the law, but instead represents our best interpretation of where things currently stand.