Restaurants chew on good old tricks as delivery giants gobble their margins

Bengaluru’s well-known eatery Paradise Biryani, for instance, runs its own fleet for bulk orders even while listing on Swiggy and Zomato—sweetening direct deliveries with discounts of up to 40%. In Versova, a western suburb of Mumbai, old local favourite joints such as The Stomach dispatch staff to leave physical copies of their takeout menus on doors of neighbouring housing societies and offer 20-30% off on direct orders.

Take a Bengaluru restaurant owner who listed on Zomato and Swiggy. Between October 2024 and June 2025, the outlet notched up nearly ₹4 lakh in sales on Zomato. But once commissions and charges were shaved off, barely ₹1.55 lakh—or less than 40%—actually landed in the restaurant’s account.

In a single week in April, the outlet executed 66 orders worth ₹19,154. Yet, after commissions, delivery and platform fees, the restaurant was left with just ₹6,233—barely a third of the topline. The owner, who requested anonymity, admitted he knows he’s losing money on every order. Even so, he won’t delist from Swiggy or Zomato, because, for now, that’s where the customers are.

This pain isn’t restricted to small local eateries. Pizza chain Domino’s, operated by Jubilant FoodWorks Ltd, has long stuck to its in-house delivery model, keeping aggregator reliance in check. About 72.9% of its online orders came from its delivery app. Westlife FoodWorld, which operates burger chain McDonald’s in South and West India, also encourages orders through its own app. About 75% of the orders come from the company's mobile apps and its self-ordering kiosks (SOKs) as of June.

“Domino’s had built its 30-minute delivery promise long before Swiggy and Zomato entered the scene, making in-house fleets central to its brand and customer promise," said a person familiar with Jubilant FoodWorks’ strategy, “That’s why Domino’s has continued to invest in its own fleet, while using aggregators only as an additional channel."

Samidha Rathore, 27, a consultant based in Delhi, said she began noticing a difference in how Domino’s positioned its offers. The chain regularly nudges her with app-based discounts and reminders to order directly, while the deals available on Swiggy or Zomato tend to be less attractive. Over time, that contrast has influenced her buying behaviour; she now finds herself opening the Domino’s app first, rather than the aggregator platforms.

A manager at the Domino’s outlet near her home, who spoke on the condition of anonymity, said the company’s app has become a stronger tool for discovery, but declined to share revenue figures.

“When we send out flyers in our neighbourhood, the orders we get directly tend to come in larger—often ₹750-900 on an average, compared to around ₹500-550 on aggregator platforms. Customers who call us directly usually order in bulk for families or small gatherings, while aggregator orders are often single meals. That difference in ticket size makes a big impact on our unit economics," said the owner of a Delhi-based outlet of a venture capital-funded North Indian restaurant chain, requesting anonymity.

In a good week, pamphlet-driven calls account for about 25-30 orders, which adds up to roughly ₹20,000 in sales. “That’s small compared to aggregator volumes, but because the ticket size is higher and the costs lower, the profitability is far better," the owner explained.

“Once you deduct aggregator commissions, delivery charges, packaging costs and the mandatory discounts, there’s hardly anything left on orders below ₹500," said the manager of a standalone fast-casual outlet in South Delhi. “For a small store like ours, profit on such tickets can be negligible, sometimes even negative. In contrast, direct orders, though fewer in number—maybe 10-15% of our total—let us hold on to 20–25% margins. That’s ₹7,000– ₹8,000 on just ₹30,000 worth of direct business."

“We’re also experimenting with pamphlets again—old school, but effective in our catchment," said a partner at a recently opened Delhi franchise of a biryani chain. “A single flyer drop around residential blocks typically brings in 40-50 calls over a fortnight, translating into ₹35,000-40,000 in direct sales. Because our AOV (average order value) through flyers is close to ₹800, the margin after costs comes in at about 22–24%. On the same volume through an aggregator, we’d be lucky to make half that," the partner said, adding that it also provides a chance to build a direct relationship with repeat customers.

This, however, is not that simple. Every restaurant owner interviewed admitted that customer discovery and new delivery traffic still depend heavily on aggregator platforms.

“With just two players dominating the market, restaurants have little negotiating power. Own delivery is tricky and costly, especially with rising labour costs," said Satish Meena, founder of Datum Intelligence.

Based on a Goldman Sachs report dated 17 September, recent increases in platform fees on Zomato’s food delivery app are expected to boost its commission. The platform fee has increased ₹ ₹2.5 per order in recent months, which is projected to translate into approximately 60 basis points of a higher take rate by December. This improvement is a factor in the forecast that the food delivery segment’s adjusted Ebitda margin will increase from 5.0% of net order value (NOV) in June 2025 to 5.7% by March 2026. Ebitda is short for earnings before interest, taxes, depreciation and amortization.

However, despite the rising commission, data from the report shows Zomato’s food delivery business growth has slowed down. For instance, the year-over-year NOV growth for the food delivery segment was 13% in the June quarter, down from 27% a year ago. It, however, expects a pick-up, estimating an 18% y-o-y growth in the second quarter ending September and near 20% by March.

“Although we don't see commission take rates increasing significantly from here on, they may not even come down because of the limited bargaining power that the standalone restaurants have because of over-dependence on aggregator platforms," said Karan Taurani, executive vice-president at Elara Capital, a brokerage firm.

This remains a bugbear for the National Restaurant Association of India.

For years, the lobby has argued that food delivery platforms tilt the playing field against smaller restaurants—first by driving deep discount campaigns that distort pricing norms, then by pushing their own payment gateways that charge far higher commissions than banks.

To make matters worse, restaurants get no access to customer data, even though the relationship with diners is the lifeline of their business. Each of these issues chips away at their already thin margins, reinforcing how little a bargaining power standalone outlets have in negotiations with aggregators.

Add to that the issues in having their own delivery mechanism. “They obviously can’t have their own delivery. Some local delivery could be there for them, but I think they can't scale up on that. So more than 90% of the delivery traffic for the local restaurant, standalone restaurants would come because of aggregators," Taurani of Elara Capital said.

Most of them also don’t have the wherewithal to exit these platforms because dine-in growth is extremely slow, said Taurani, “Even if restaurants do exit from aggregator platforms, it’s going to work to their disadvantage because the delivery business is all about volumes and operating efficiency."

Mint had earlier reported that the restauranters’ body NRAI wanted to build direct orders that are far more profitable, with average order values higher than those routed through aggregators. The NRAI has been nudging members to adopt their own tech platforms—such as DotPe—to cut dependence on Swiggy and Zomato. Separately, The Economic Times had noted that many restaurants discreetly hike menu prices on aggregator apps to offset steep commissions, which pushes up the average order value online compared to dine-in or direct orders.

“Restaurants are always actively trying to develop channels to augment the delivery business to enhance volume and margins," said Riyaaz Amlani, chief executive officer and managing director of Impresario Handmade Restaurants, that counts Social, Smoke House Deli, Mocha, etc. in its portfolio.

Yet, not much has shifted—until a sliver of hope appeared with Rapido’s entry into food delivery. The bike-taxi app has launched its “Ownly" pilot (in Bengaluru, expanding to other cities), promising far lower commission rates (8-15%) compared to the standard 16-30% charged by Swiggy and Zomato. Rapido is also pushing for transparent rules: it asks partner restaurants to keep online menu prices on Ownly consistent with in-store/brick-and-mortar pricing, avoid excessive packaging fees, and ensure some items are priced under ₹150.

While queries sent to Swiggy did not elicit a response, Eternal (Zomato) in a prepared statement said: “Over the past year, we have shortened settlement cycles, moving from monthly to weekly payouts, and have already introduced daily payouts in select markets. Every charge on a settlement sheet corresponds to a service the restaurant has actively used—there are no blanket deductions…."

“...Visibility options and discount programs are entirely optional. Restaurants that choose to invest in them may see faster growth, but there are no penalties for those that do not," it added.

The promoters of Jubilant Foodworks and HT Media Ltd, which publishes Mint, are closely related. There are, however, no promoter crossholdings.