Chain restaurants entering into exclusive agreements with delivery partners isn't the norm just yet — most continue to partner with several companies as they explore delivery's potential. But when executed properly, an exclusive partnership can be good news for both companies involved.
— Kristen Hawley
As large chain restaurants navigate the growing delivery boom, not many are opting-in to exclusive partnerships… yet. But score one for DoorDash, as it will become the official delivery partner of The Cheesecake Factory.
Cheesecake Factory president David Gordon shared the news during the company’s second quarter earnings call on Tuesday. “DoorDash is our our main partner and that we are actually executing a new agreement with DoorDash to become our exclusive partner,” he told investors, and noted that the chain’s delivery business continues to be strong and very stable.
While exclusive delivery deals aren’t common — at least for large-scale chains — they do offer some advantages. Namely, companies can invest in point of sale (POS) integration and standardized delivery logistics across locations, leading to more predictability and greater speed.
Gordon called DoorDash a “great operating partner,” and said that the company is moving into the second phase of its existing POS integration, allowing for “greater efficiencies and less error rates going forward,” which should be completed by the end of the year.
DoorDash will assume delivery operations at all Cheesecake Factory locations that offer delivery, taking over the 37 restaurants previously offering delivery through competitor Grubhub. Those restaurants account for 14 percent of total delivery sales.
Delivery as a Beacon of Hope
Off-premise orders, comprised of takeout and delivery, seem to be a bright spot in Cheesecake Factory’s business, which missed targets this quarter. The chain is held up as a popular example when discussing the potential restaurant slump tied to shopping malls. There are 199 Cheesecake Factory restaurants operated by the company; it licenses another 20 locations internationally.
According to Gordon, delivery sales account for 20 to 25 percent of its to-go business. Customers like it too, returning at a “higher than average return rate” than that of other restaurants, he said.
Benefits of Exclusivity
In an interview with Skift Table last year, DoorDash chief operating officer Christopher Payne detailed the company’s work with the San Francisco Cheesecake Factory location. It was especially complicated because of its location on the top floor of a department store in the city’s Union Square, an area known more for concentrated foot traffic than delivery drivers. “We customize the operations specifically for that store,” he said. A food runner takes the order down to street level, and the “Dasher” app — available to couriers — tells drivers exactly where to pull up to take the food. “The Atlanta store is different, the Charlotte store is different,” he continued.
But in the high-stakes game of delivery, adjusting operations to fit the business is essential. “A company like [The Cheesecake Factory] wants to know that you’re delivering across their entire system at the level they want. They want a point of sale integration, they want consistent training across their staff so they know how to do it and if something goes wrong they want you to systemically make it right.”