If you’re a regular reader of The Back Burner, then you know how I feel about diversifying your revenue stream so that when diner’s spending habits change, you have multiple sources of income for your business. As dining room visits declined last year, more and more restaurants started looking for different ways to reach their customers even though they weren’t coming into the restaurant anymore.
Restaurants in St. Cloud, Minnesota learned just how effective a proactive approach to serving food can be last year. A local entrepreneur started a company called Food Dudes, whose mission is to deliver food from any local restaurant willing to participate.
Delivery times average about 45 minutes, and drivers use insulated carriers to ensure freshness. Customers can place their orders via phone or internet, and so far, more than a dozen restaurants have signed on. The results have been overwhelmingly positive. Food Dudes takes a percentage of every sale they generate, plus a $2.99 delivery fee. But the found business for local restaurants more than compensates for the cut Food Dudes takes.
Not many restaurants are lucky enough to have an enterprising local like the founder of Food Dudes to start delivering their food for them. And few restaurants can justify the expense and time that would be involved in creating their own delivery service.
But what if your local restaurant association created a communal delivery service that benefited everyone? The business model can obviously work, as Food Dudes has proven, and with a little organization, any group of restaurants can pool their resources and add a service your customers are certainly looking for: convenience in their own homes.
Some suggestions for starting a communal delivery program for a group of restaurants in your area:
Hire an independent manager. Wherever money is involved the potential for conflict is high, especially among businesses who normally compete against each other. That’s why you need someone to run the show who isn’t actively involved with any of the restaurants in the group. That way you have a dispassionate third party who can resolve any issues and be trusted by everyone to handle the money side of the operation fairly.
Pool resources. Restaurants that are serious about getting involved in a communal delivery service should have to buy in to help cover operating and marketing expenses. Whatever you decide that dollar amount should be, make sure the budget is gets general approval and is handled by your independent manager.
Hire independent contractors as drivers. In the end, you don’t want to have to manage a whole separate operation just to deliver your food to customers. A single manager should be enough to handle the money and the marketing. After that, any help you need, like delivery drivers, should be independent contractors. That makes handling payroll extremely easy.
It may take some initial investment of time and money to get a group of restaurants in your community on board with a communal delivery program, but in the end, it’s a program that can be extremely beneficial for everyone involved. It can also direct a lot more of the revenue you generate back to your restaurant over a concept like Food Dudes. That’s because your communal delivery service isn’t looking to turn a profit like a business, which is ultimately what Food Dudes is looking to do.