Applebee’s took a slow and strategic approach to national delivery. While the largely franchised brand has allowed its restaurants to work with various delivery services independently, parent company Dine Brands Global Inc. waited to get into a national agreement citing concerns over the long-term sustainability of delivery. But today, the company announced it has found the right partner — DoorDash.
The goal of the partnership is “getting to a model where our franchisees don’t have to choose between a dine-in guest, a to-go guest and a delivery guest because of those costs associated with those guests,” said Scott Gladstone, vice president of strategy, off-premise and development at Applebee’s.
Dine Brands CEO Steve Joyce echoed this sentiment when speaking to NRN late last month. “If the profitability for in-restaurant and for takeout and delivery aren’t relatively similar, we’re going to begin to prejudice one channel against another, which we don’t want to do because we want the customer to be in charge of making that decision.”
To help achieve delivery profitability for franchisees, guests are charged a service fee essentially transferring some of the cost to guests. Joyce isn’t worried about scaring off delivery customers with these fees. “The guest is willing to pay a lot for that level of convenience, and the relative percentage of the [delivery] cost versus the meal doesn’t seem to matter as much as you’d normally think.”
Another source of tension in many delivery partnerships is losing customer data and preserving a direct relationship with guests. The partnership with DoorDash allows Applebee’s to maintain customer data and enables guests to order off of Applebee’s website or app. DoorDash works with Chipotle Mexican Grill on a similar partnership.
DoorDash is fulfilling the order by picking up and delivering meals to guests. This partnership is active at 1,300 of Applebee’s approximately 1,700 restaurants nationwide. Delivery with DoorDash is free for guests until Sunday, Sept. 1. And with a new partnership with NBC Sports’ Football Night in America, Applebee’s free delivery will continue every Sunday throughout the football season.
This is not an exclusive relationship, though, and Applebee’s menus across the county will continue to be found on different delivery apps depending on franchisee relationships. Customers can also order Applebee’s directly from DoorDash.
Applebee’s went with DoorDash for this national partnership after exploring options with many other delivery services, said Gladstone.
“Doordash has the highest capacity with this type of program,” he said. Specifically, a white label delivery service, which in this case allows customers to order directly from Applebee’s site. And, perhaps most importantly, DoorDash was willing to make it “profitable for franchisees.”