DoorDash will begin punishing McDonald’s restaurants for slow service and ordering errors, report says

Delivery service DoorDash and McDonald’s have negotiated new contracts resulting in lower overall fees for the fast-food chain. But the new deal will also result in higher fees for franchises that struggle to provide prompt service.

DoorDash, which makes money in part by charging restaurant commission fees and consumer service fees, is cutting the base commission McDonald’s pays on non-subscriber orders from 15.5% to 11, 6%, according to the report. But McDonald’s franchises that delay DoorDash drivers will be hit with higher commission fees of up to 17.6% for regular consumers and 20.1% on DashPass subscriber orders, WSJ reported. Restaurants that frequently mess up orders will have to bear the cost of refunds.

A McDonald’s spokesperson did not address the renegotiated contracts, but told Insider that the company sees delivery as “one of the biggest growth drivers for McDonald’s business globally.”

“Commission rates are just one element we consider when establishing these strategic agreements, which often take into account unique and reciprocal business objectives and allow our partners to capitalize on the unparalleled advantages that offers a global partnership with the world’s largest restaurant company,” the spokesperson said in an email to Insider.

About 93% of McDonald’s locations worldwide are owned and operated by franchisees, rather than the company itself. This army of independent entrepreneurs has enabled Les Arches d’Or to expand into more than 100 countries, with a total of approximately 38,000 restaurants.

“McDonald’s franchisees value the relationship we have with all of our delivery partners,” Mark Salebra, president of the National Franchisee Leadership Alliance, said in a statement sent to Insider. “The fact that these long-term agreements are, at their core, designed to financially reward best-in-class services and operations is something we can all support and enthuse.”

DoorDash declined to comment on the “confidential customer contract terms” reported in the WSJ.

“The pricing structures of our merchant partnerships may vary by store or franchisee location and, in practice, may be determined by a variety of factors, including volume, average delivery distance and value-added services, as well as operational performance and quality,” a DoorDash spokesperson said in a statement sent to Insider. “Any summary number is very misleading. Incentives based on the quality of our platform help reduce Dasher wait times to maximize their revenue and increase customer retention and revenue for our merchant partners.”

Source link

About Raul T. Casey

Check Also

Top 5 Most Popular Fried Chicken Restaurants in Madison, Wisconsin | restaurant review

This list is based on feedback from previous customers. Unsplash Scots and Africans started living …