Burger chain Checkers & Rally’s announced via press release a delivery program this week that enables delivery from multiple third parties and is also, according to a company press release, “franchise-friendly.”
To service multiple third-party delivery partners at once, and perhaps also to avoid putting franchises through the kind of franchise McSaga McDonald’s currently finds itself in, Checkers & Rally’s have integrated delivery from five major players into a single point-of-sales system. Customers can order from Uber Eats, DoorDash, Postmates, Grubhub, and Amazon Restaurants, and that order will appear as any other ticket item in the system.
Enabling third-party delivery with multiple partners can and does often create operational issues for restaurants. There’s the pileup of hardware devices that come with using multiple services, often referred to nowadays as “tablet hell.” Plus, multiple new ticket streams from these third-party providers means someone has to key in the different orders from different devices, which would slow even the most well-oiled machine down while simultaneously raising the potential for error.
Checkers & Rally’s sought to avoid these pains by enlisting digital ordering platform Olo, who raised $18 million earlier this year from Tiger Global Investment. For the Checkers & Rally’s partnership, Olo helped implement a system that funnels all orders from third-party services into one channel that goes directly into the main POS system. While this approach isn’t exactly new — Chowly and OrderOut both provide this type of integration — Olo’s platform is specifically designed for larger chains (Checkers & Rally’s has around 900 restaurants currently).
The program also offers a benefit to franchisees in the form of a single point of contact for business. Everything from contract negotiations with the third-party services to tech support to training is addressed through the same contact. I’ve spoken with enough restaurant operators in the last year to know that getting support from third-party delivery services can make a call to the IRS seem fun.
Rick Silva, President and CEO of Checkers Drive-In Restaurants, said in a press release that the company wants “to provide our franchisee community with a fully integrated platform that would make it easy and profitable to fulfill delivery orders.”
That’s an important point: delivery is more or less a mandatory part of business nowadays, but the economics of working with third party services don’t always make sense for franchises. Paul Flanders, CFO of Burger King franchisee Carrols Restaurant Group, recently noted that “The economics [of third-party delivery] are probably marginal for the [franchisee] operator.” Meanwhile, the aforementioned McSaga has McDonald’s franchisees questioning some of corporate’s decisions around the exclusive partnership McDonald’s has with Uber Eats, arguing for a better commission split with third parties, and, in some cases, the ability to work with more services than just Uber Eats. A post by the National Owners Association, a McDonald’s franchisee group started late last year, stated that, when it comes to the many changes franchisees have to face, “simplification needs to be priority one.”
Simplification appears to be what Checkers & Rally’s is after with its newly launched delivery program. Of course, making it easier to take multiple orders from multiple services is only one element of doing cost-effective, operationally efficient delivery. But Checkers & Rally’s appears to be making franchisees an integral part of the process when making decisions about delivery, rather than an afterthought you throw technology at.
The numbers will tell how effective this strategy is, and we’ll have to wait for those until the next round of earnings calls. In the meantime, the new program will serve both delivery and pickup orders.