As more people opt for takeout and delivery, restaurants are shifting to online ordering to meet the growing meal demand.
Partnering with a third-party service for orders and delivery is a big choice. Knowing how the ordering and partnership process works is a great way to get started. Keep reading to find out how your restaurant can team up with Grubhub.
🔎Read more: What is Grubhub and How Does It Work for Delivery?
Grubhub is an online food delivery app that links customers to local restaurants. People can place takeout or delivery orders using the Grubhub app or website. With partnerships with over 365,000 restaurants across more than 4,000 U.S. cities, Grubhub simplifies food delivery for both restaurants and customers.
💡Fun Fact: Grubhub handled $10.1 billion in transactions in 2022, according to their earnings report.
Many people know how to order food on Grubhub but might not be as familiar with how the platform works with restaurants and drivers.
Customers can use the Grubhub website or app to place orders. After signing in, they can search for a specific restaurant or browse by cuisine, like Mexican or barbecue. Once they've chosen their meal, they enter their payment information to complete the order. Grubhub accepts different payment methods, including credit cards, debit cards, and PayPal.
After placing an order, customers get real-time updates, letting them know when their food is ready for pickup or when it will be delivered. They can also track the driver on the app and message them directly if needed.
When a customer places an order, it shows up on the restaurant’s Grubhub dashboard. The restaurant staff then confirms they can fulfill the order and provides an estimated time for when the order will be ready and delivered. After that, the restaurant prepares the food for either customer pickup or courier delivery.
The process is almost the same as serving an in-person customer. The only added step is confirming the order through Grubhub's dashboard before cooking. Unlike in-person orders, restaurants can choose to decline orders if they're short-staffed or certain menu items aren't available
For delivery drivers
When a restaurant confirms an order, Grubhub notifies the nearest delivery driver. After accepting the delivery, the driver should head to the restaurant quickly to pick up the food. Once the restaurant finishes preparing the order, the driver delivers it to the customer. If there are any delays, the driver can contact the customer directly. After the delivery, the customer has the option to tip the driver.
📘Tip: Restaurants can cut costs by having their own staff handle deliveries instead of using Grubhub drivers.
Grubhub partners with restaurants across the country, offering various tools and services to support them throughout their business journey.
For restaurants new to Grubhub:
For restaurants aiming to expand:
For restaurants wanting to boost their online presence:
Joining Grubhub’s Marketplace can increase your restaurant’s visibility, both online and locally. However, there are costs involved:
Grubhub offers different commission rate models to fit your restaurant’s needs. To explain how the commission structure works, business.com contacted Grubhub for details. According to a sales representative, a restaurant's location and the number of nearby restaurants affect the rates. For instance, in New York City, where there are many restaurants in a neighborhood, the lowest commission for a sponsored listing is 20 percent. For a nonsponsored listing, restaurants in NYC might see a commission rate as low as 15 percent.
Differences between nonsponsored and sponsored listings
The advantage of the sponsorship program is its flexibility. There are no long-term contracts, so you can adjust your sponsored listing rate whenever you need to.
You can be listed and process orders through an online ordering site without paying for delivery. For restaurants that have their own delivery staff, there’s no need to pay for Grubhub’s delivery service. If your restaurant doesn’t have delivery drivers, you can choose to use Grubhub’s delivery service for an extra fee.
Grubhub charges a 10 percent fee per order for delivery services, which means the total cost for restaurants using both Grubhub’s ordering and delivery services is at least 25 percent per order. In New York City, restaurants with nonsponsored listings and delivery services may end up paying at least 30 percent per order.
To get a clear idea of your costs, reach out to a Grubhub sales representative for details on commission rates in your area.
Restaurants that sign up with Grubhub have several options for handling orders, and a POS system isn’t required. Once an order is received and confirmed, you’ll need to manually enter it into your POS system (if you have one) or record it in whatever format your restaurant uses for orders.
You can also add an Order button to your existing website at no extra cost. This allows customers to place and process orders online directly from your site. This feature is especially useful for restaurants with a strong online presence, as sales from the Order button don’t incur commission fees, only delivery fees if applicable.
Getting paid and handling commissions through Grubhub is straightforward. Every week, Grubhub sends a direct deposit that includes the total amount from orders, minus the cost of your listing and any delivery fees if applicable. Tips are clearly detailed for each transaction, so your staff can get their share. Restaurants partnering with Grubhub should keep in mind how this payment process might impact their other business expenses.
While partnering with Grubhub offers many benefits, there are some downsides to consider.
Grubhub charges a high fee for its service, which can affect your profit margins. Choosing a nonsponsored listing might be more affordable, but depending on where you’re located, it could limit the effectiveness of the service. In busy urban areas, restaurants might face high commission rates to stand out.
Restaurants also worry that Grubhub could hurt their in-store sales. Although it can attract new customers, only some may visit your physical location. This can lead to fewer in-person sales of items like drinks and extras. Plus, if customers have a bad experience with Grubhub, there’s not much you can do to fix it.
Despite the potential risks, partnering with Grubhub can offer several advantages for your restaurant. Joining Grubhub can introduce your restaurant to a new group of diners, including tourists who might have yet to find you otherwise and food enthusiasts looking for new places to try.
Grubhub can also boost your restaurant’s revenue. Being listed can quickly increase the number of takeout orders you get, which adds to your income.
Additionally, Grubhub provides customizable marketing and loyalty promotions to help attract new customers and grow your online presence.
Grubhub and similar services can offer great benefits, including some basic analytics. However, it’s hard to make a one-size-fits-all recommendation since costs vary based on location and sponsorship level.
Like any business service, you’ll get more out of Grubhub if you’re actively involved. If you start with the lowest nonsponsored level, add an Order button to your website, and promote your online ordering, Grubhub can likely benefit your restaurant.
If you expect Grubhub to perform miracles or replace other marketing efforts, you might be disappointed. Consider testing the service first. Start with the basic level, promote it yourself, and after a few months, evaluate whether the results justify the costs for your business.