Like many operators, franchisees of Wayback Burgers love the additional sales they can reap by simply signing on to third-party delivery services.
“Within an hour or so, they can be in the delivery business. It’s pretty simple,” says Pat Conlin, senior vice president for Wayback Burgers. “And the nice thing about it is a lot of those customers may not have been Wayback customers. What we're finding is they're customers of GrubHub or Uber Eats. So, it’s really incremental business for our franchisees. Many of those people that use delivery services are strictly delivery customers. They’re not coming out of their home to get food unless they go to a sit-down restaurant. We might not have those people if it weren’t for delivery.”
But—and this is a big but—operators disdain the deep cut taken by third-party providers. The third-party share generally ranges between 20–30 percent, Conlin says.
“They take a significant bite into the profits,” he says.
READ MORE: Inside the blazing growth of Wayback Burgers.
And it’s tough to maintain control of the product when someone else is bringing it to the consumer’s door.
“It becomes a food quality issue,” he says. “Is that customer getting a great experience?”
Because of those concerns, Wayback Burgers is creating its own delivery solution. Conlin wouldn’t say much about the new program, but he says the company will begin testing sometime in August. He plans to unveil the plan to franchisees in the fall.
“We’ve been looking at all kinds of alternatives to the third-party guys. I’ve been working for the last four to five months on our own alternative to delivery solution that we think is going to be pretty significant,” Conlin says. “We think it will be a gamechanger for the delivery business.”
Conlin says Wayback’s new delivery solution will likely wean the system off of third-party services. He thinks his company’s move is indicative of a wider revolt against high-cost delivery services, which may eventually force some of those providers to ease their prices.
“Some of the other companies that made big splashes doing partnerships with the third-party guys have pulled back and are now looking at alternatives,” he says. “And I think as that continues to happen, the pressure would be on the third-party providers to lower the fees. But at the outset, they were the only guys in town and it was an easy setup. So, they kind of had you and they did a good job.”
Whether a restaurant uses in-house or third-party delivery services, Conlin says it’s clear that delivery isn’t going away.
“I don’t know whether I want to say people are inherently lazy, but people are more and more about the convenience,” he says. “And if they're not going to come out of their house or apartment or office, you better find a way to get to them to get that business.”
In an April quarterly earnings call with investors, Wingstop CEO Charlie Morrison detailed his company’s foray into delivery. The Dallas-based chain is testing delivery in more than 70 stores in Las Vegas, Chicago, and Austin.