Well before COVID-19, Domino’s spoke about third-party delivery and the inevitable “shakeout” to come. In 60 years, the brand has never made a dollar delivering pizza, CEO Ritch Allison said Thursday during a conference call. It makes its money on the product, not the delivery itself, although it does charge an upfront fee, market-by-market. But that’s more of an offset strategy than a profit driver.

“So we’re just not sure how others do it,” he said.

And as the marketplace seeks answers, Domino’s plans to sit in the stands and grab its popcorn. Yet has the idea ever come up? The sheer prevalence of third-party delivery led Domino’s to at least consider it in recent years. The lure of hopping on an aggregator platform to reach additional consumers.

“Every time we look at it here in the U.S., it just doesn't make sense for us or our franchisees economically,” Allison said. “And if it doesn't make sense economically, it certainly doesn't make sense to take the risk of sharing all of our customer data with these third parties.”

This conversation has come under hot lights of late. The pandemic forced a lot of independents and small operators into the mix just to survive. Labor management platform 7shifts recently released a study on the state of restaurant labor regarding third-party delivery. It found the average fee paid to aggregator services in 2020 was 18.4 percent. However, 30 percent of restaurants said they paid 30 percent or higher.

Twenty-four percent of restaurants said their opinion of third-party delivery worsened during COVID, thanks to high fees. Seventeen percent said it improved because it helped keep the doors open.

In terms of trying to balance the equation, 55 percent increased menu prices; 26 percent scheduled fewer staff; 23 percent reduced hours of operations; 12 percent furloughed or laid off staff; 7 percent changed ingredients; and 4 percent reduced portion sizes.

And perhaps one of the more staggering changes—delivery-related roles being created within restaurants grew by 243 percent as operators scrambled to serve demand.

A lot of what’s unfolding in the third-party sector? Domino’s is pulling in the opposite direction. “In a world where we're trying to shrink our delivery area to get closer to our customer for better service, a lot of these third-parties are trying to expand to reach more customers, which we think just takes away from service,” Allison said, referencing Domino’s fortressing strategy, which looks to cluster markets, shrink territory for deliveries, and, in turn, improve the wage rate equation for drivers and franchisees, as well as bolster carryout business and service times.

“And when you think about the profit equation, you get somebody who inserts themselves into the value chain, and they have to make their money somewhere,” he added. “And it's either got to come from the restaurant or it has to come from the customer.”

Ultimately, Allison believes this reality is where the pressure will froth over, particularly with independents trying to make margins amid rising cost environments, while also paying aggregators.

Customers, he thinks, over time, will start to closely look at that delivery that cost them $15 for $12 worth of food.

“So we're just not sure how it all plays out. And you've seen that with some of some of the public players in that space who have commented about the challenge of driving long-term profitability as an aggregator,” Allison said.

Just a few weeks ago, Grubhub reported its Q4 earnings. Its app, unsurprisingly in lockdown times, grew to 31.4 million active users—a 39 percent, year-over-year hike. Daily average orders lifted to a 31 percent uptick (658,100) and $2.4 billion in gross food sales, 52 percent higher than 2019 levels.

But to Allison’s point, Grubhub’s massive user growth did not translate into profits. The company reported a net loss of $67.8 million in Q4—a significant increase from the $27.7 million net loss in Q4 2019. The company’s net revenue was $504 million.

One of the concerns Allison surfaced in the past was the notion of restaurants benefitting from the financial support of aggregators hell bent on buying market share. The fact they were pricing below the cost to serve, offering free delivery or other deep discounts often enabled by investor subsidy.

Grubhub spent $319 million last quarter on operations and infrastructure to handle the added COVID volume. It also pushed $120 million toward sales and marketing and lost north of $50 million due to delivery fee caps in certain markets. The end result being a nearly $68 million loss.

There’s no question demand will be there, though. A study highlighted in PYMNTS' December Mobile Order-Ahead Tracker noted digital orders would make up 54 percent of quick-service restaurant sales by 2025, a 70 percent increase over figures outlined in studies before COVID.

To PYNMT’s point, “the success of these delivery services depends on finding a fee that will be sustainable for restaurants and third parties alike.”

While nobody knows for certain if caps could be a reality of the future, they did bring up a key question: Can restaurants really afford 30 percent fees as it becomes a larger part of the business?

Eric Jaffe, co-founder and COO of ChowNow, explained the recent dynamic like this to PYNMTS: “Maybe [restaurants are] OK with paying those [third-party] commissions when 20 percent of your revenue comes through that channel, but when the model flips and suddenly 80 percent of your revenue is taxed by those commissions, your business model breaks.”

Domino’s doesn’t suffer from the same uncertainty.

“For us, we continue to just be the low-cost delivery provider, provide great value,” Allison said. “And we think as long as we're providing a great product with great service at a great value, we'll let everything else shake out. And certainly, we don't know how long it will take to all shake out. But from our perspective, we're in a pretty good spot.”