What to Consider When Starting a Restaurant Delivery Service In-House

November 28, 2017

If diners aren’t asking a favorite spot about starting a restaurant delivery service, odds are they will soon. Thanks to mobile apps and dwindling delivery charges, dinner in is no longer limited to pizza or sesame chicken, and consumers are pushing for more options.

When The Cheesecake Factory began offering delivery, guest satisfaction increased because patrons could enjoy their favorite meals without the long wait, according to Restaurant Business Magazine.

Various app-forward food delivery services like Grubhub, UberEATS, Postmates, EatStreet and Caviar continue to move into new markets and restaurants, expanding their delivery areas in response to increasing consumer demand. Even Facebook is getting in on the action, according to Eater.

A 2017 study from financial services firm Morgan Stanley forecasts that digital food delivery will account for up to 11 percent of the total restaurant market by 2022.

But is your restaurant ready to start a delivery service? Consider these four factors before digging in.

1. Menu Matters and Container Concerns

Customers want the same culinary experience at home that they’d have in a restaurant. This means food needs to arrive fresh and at the proper temperature.

Your restaurant’s executive or research and development (R&D) chef needs to be involved from the beginning to ensure ideal customer experience from kitchen to couch. Some recipes may require reformulating to withstand extra handling and service delay. And other items may be excluded from the delivery menu altogether.

Consumer concern collides with convenience when it comes to takeout containers, so choose consciously and test thoroughly. Is the container microwave safe? Is it biodegradable? Can it be recycled? Fresh food may need vents or sturdier material to survive the journey from kitchen to doorstep.

Denny’s designed its new delivery containers with breakfast food in mind: The vents let the pancakes breathe. The containers are made using microwaveable and sustainable materials, according to Nation’s Restaurant News.

Some dishes travel better than others, so it might make sense to put some ingredients in separate containers for customers to combine on arrival.

Dinosaur Bar-B-Que took a slightly different route and developed smaller, takeout-friendly bowls in February using existing ingredients, according to Restaurant Business Magazine. The chain’s lunch sales are now split 50-50 between dine-in and delivery at its city locations.

2. Technology Boosts Delivery Orders

Your existing point of sale (POS) system is likely in need of an upgrade to handle an influx of delivery orders. It needs to ensure the orders are flagged separately from the dine-in crowd to avoid logistical confusion. A good system will also incorporate order throttling, which makes it possible to slow the pace of orders hitting the kitchen during peak times.

Chipotle rolled out a feature in its online ordering system in February, which gives carryout customers more accurate pickup timing and the option to reserve future pickups. The feature provides extra convenience for customers while allowing the store to plan.

Mobile and online ordering apps are rapidly replacing phone-in orders. Apps are convenient, allow diners to customize for dietary restrictions and never forget to up-sell.

Domino’s remains the leader in ordering technology, according to Business Insider, as customers can order their favorites via mobile app, smartwatch, Twitter, text message, emoji or Samsung Smart TV. The chain says its digital orders now outpace those placed by phone.

Restaurant owners might be surprised to find they qualify for significant R&D Tax Credits. “Research and development” applies to developing and implementing new technology, food science and packaging. The same proprietary systems, cooking techniques or sustainability programs they use to incorporate in-house delivery could result in tax savings.

3. Streamline Space and Staffing

Cancellations, empty dining rooms and labor costs have long been issues for dine-in restaurant profitability. Offering delivery helps flip the equation. In time, this may lead you to remodel sections of your dining room to create separate assembly and storage areas for delivery orders.

Red Robin has embraced the “ghost restaurant” concept and plans to open a purely delivery-based kitchen in Chicago, according to Restaurant Business Magazine. Such a move would eliminate the need for a large, costly storefront.

While you may not need servers in the dining room during bad weather, delivery orders require customer service and packing. This is where big data works in many small ways because modern POS dashboards show everything at a glance — including checking labor reports and ordering against weather or season. You may need less staff in the dining room at 5 p.m. but extra hands at the carryout station to run orders out curbside.

4. Partner With a Third Party

While controlling the customer experience from door to door is preferable, partnering with a service like Grubhub will help you reach a broader delivery customer base quickly.

Denny’s partnered with food ordering platform Olo to build its app, which included delivery partnerships with UberRUSH, Postmates and DeliverLogic. Some of these services also offer walking and bicycle delivery, which may be better suited to your area than drivers.

Summary: Start It Up

Starting a delivery and takeout service presents new challenges, but it’s worth its weight in profit.

For an example of the growth, Morgan Stanley reports that 43 percent of consumers who ordered food for delivery say it replaced a dine-in meal, up from last year’s 38 percent.

Clearly, those nights in have never looked so good for more and more people — and restaurants should take advantage of the growing popularity with an in-house delivery service.