Delivery's new obstacles

An off-duty delivery driver for The Roman Candle Pizza, with the restaurant’s sign still strapped to the roof of his car, got into an altercation with a school crossing guard. Someone called the Madison, Wis., restaurant and complained about the driver’s behavior. “We had to fire the driver,” says Brewer Stouffer, CEO and founder of the now 10-year-old concept, which has four locations.

“Restaurant operators have to think about what they are doing to their brand every time they let a [delivery] driver walk out their door,” Stouffer says.

Delivery is revving up the foodservice industry. Consumer demand for convenience, online- and mobile-ordering technology, improved to-go packaging and the advent of third-party, on-demand delivery companies has restaurants from Taco Bell to upscale independents taking their food right to the customer’s doorstep.

“Delivery is almost a requirement now, at least in my slice of the industry—fast casual,” says Paul Steck, president and CEO of Saladworks, a fresh-tossed salad concept based in Conshohocken, Penn., with more than 100 franchised units. “You have to offer it; that’s not a question anymore. The question now is how to do it.”

Doing delivery right is not simple—even when hiring out the task. Every method comes with its own advantages and challenges. Among the hurdles: scams, safety issues and delivery practices that can harm a concept’s brand and reputation.
 

Keeping the dropoff safe is a top priority, operators say. And it’s not only the driver’s safety that’s in focus, particularly after multiple lawsuits against sandwich chain Jimmy John’s (known for its “Freaky Fast” slogan) claimed people were injured by its delivery guys making illegal driving maneuvers in their haste.

Wing Zone franchisee Amyn Ali instructs employees at his three stores in Chicago not to promise or guarantee specific delivery times for customers. Once an order is ready, a driver will call the customer to let him know the food is on the way. “We do not want our drivers speeding or causing any risk to themselves or those around them,” Ali says. “We also have a set of online tutorials on safety ... that we go over with our drivers.”

Franchisees for Domino’s, which abandoned its 30-minute delivery promise more than 20 years ago, conduct motor vehicle records checks as well as criminal background checks on their potential employees. They also provide safety training and do routine vehicle checks to make sure drivers’ cars are in good working order, says Tim McIntyre, spokesman for the Ann Arbor, Mich.-based pizza chain.

“We want to ensure that everyone delivering pizza for the Domino’s brand is a safe and courteous driver, on and off the clock,” he says. “It’s a company standard that franchisees agree to when they sign on or renew their contracts. Ultimately, it’s about brand protection.”

Delivery drivers typically carry their own car insurance, but having in-house delivery can impact a restaurant owner’s or franchisee’s insurance, too. Some Wing Zone franchisees pay annual premiums as high as $10,000 for “hired and non-owned auto” liability coverage, says Matt Friedman, CEO and co-founder of the Atlanta-based chain. Still, with its average franchise doing 18,000 deliveries a year, most are able to offset the insurance costs, he says.

In Wisconsin, workers’ compensation for a delivery driver can be almost three times that for a factory worker, says The Roman Candle’s Stouffer. “But our drivers represent about one-third of our sales at some stores. It’s the cost of doing business.”

Contracting with third-party delivery providers, like Postmates or DoorDash, has become increasingly popular with restaurants. Some online-ordering sites, such as GrubHub (with its acquisition last year of DiningIn and Restaurants on the Run), also are starting to add their own delivery drivers. Uber, the on-demand, everyman taxi service, even announced last year that it would start offering restaurant delivery.

Using another company for delivery can free up employees so they stay focused on food preparation and customer service, says Brian Farris, vice president of on-demand for Focus Brands, the Atlanta-based parent of Moe’s Southwest Grill, McAlister’s Deli and Schlotzsky’s.

Focus Brands partnered last summer with San Francisco-based Postmates to do deliveries from all six of its restaurant concepts, including Cinnabon and Carvel, in select locations and markets.

The company was careful in selecting a third-party delivery partner, he says—a task handled at the home office, rather than letting franchisees choose locally. “We had to make sure our guests would be getting a good experience from beginning to end,” Farris says. “You need to vet your partners well, as with everything. Make sure their delivery practices work well for you. On-demand works best for us.”

Focus Brands chose Postmates after a pilot test demonstrated satisfactory delivery times. “By working together as Focus Brands, we are more efficient and can create even more value on both sides of the partnership,” Farris says.

Third-party delivery is not a flawless system, but so far the process has integrated smoothly with Tender Greens’ operations, says Christina Wong, a spokesperson for the Los Angeles-based fast-casual salad concept. Like Focus Brands, Tender Greens is using Postmates for deliveries.

“There are still opportunities for mistakes, human error on both sides and growing pains, such as an item being forgotten or a driver getting lost and unable to find the address,” Wong says. “But orders come in and out just like regular pickup orders, and it’s not a huge operational lift to execute.”

Something else to consider: Third-party operators develop their own consumer databases. And customers who use those websites also get an eyeful of the competition when making choices. The loyalty for some customers is not to a particular restaurant but to the delivery provider—a drawback in some restaurateurs’ eyes.

“People are finding us on the third-party website,” says Wing Zone’s Ali. “When they are hungry and do a search for food, they do not go to our website, they go to GrubHub.com or another third-party site.”

Pita Pit, the fast-casual chain based in Coeur d’Alene, Idaho, encourages franchisees to develop their own delivery business alongside third-party providers, says Patrick O’Dell, interim brand marketing director for the franchisor of more than 200 locations. “[Third-party] may feel like an easy fix, but you have to be cautious, as you can dilute your own opportunity to grow your business organically,” O’Dell says.

Steck says Saladworks encourages its franchisees, particularly new store owners, to transition from using a provider such as GrubHub or DoorDash initially into doing their own in-house delivery. “Our take on it is, if you open a new store, GrubHub is important to help with marketing—it’s another website with your logo and name, and it helps non-users try you out,” he says.

However, Steck adds, after becoming established, operators can avoid delivery sites’ fees, which can be 20 percent of an order. “We recommend a new store [outsource] only for the first few months, then bail off and do delivery yourself where you can save that money,” he says. “That seems to work for most franchisees in [our] newer restaurants.”

With their own in-house delivery program, franchisees can make sure drivers are well trained, dressed in a uniform and have the right demeanor and attitude to also deliver excellent customer service, Steck adds. “A good-looking delivery vehicle also lends credibility while [at the same time] marketing your brand,” he says. “A logoed vehicle driving all over town is a moving billboard.”

VIEW THE FULL FAST CASUAL PACKAGE