Why is it that most large chain pizza places (Dominos, Papa Johns, Pizza Hut) deliver however most small like one shop or privately owned places don’t?
Most of the small places around here do deliver. A couple of them even have a VERY wide delivery area, much much wider than the delivery area of any single chain shop.
Short answer: Gas costs money.
Longer answer: A lot of local places do deliver, albeit usually within a much smaller delivery range.
Real answer: This question is so localized, there’s no real answer. Some local places deliver, some don’t. And all have their own personal reasons for why they do/don’t.
A better answer is that most chain stores have several locations, so there is probably one near you. Individual stores have just one location, so delivering to the same range makes the trips take longer on average.
That being said, local places often do deliver. Many that don’t are meant to be like any other restaurant. Do steak houses deliver?
A lot of locally-owned places are the epitome of small business: You might have, say, one owner/manager/cook and one server/cashier (possibly related to the owner/manager/cook), and that’s the whole shebang. In order to make a delivery, you’d have to pull one of those two away from their regular job, which obviously isn’t feasible. Even if you have more employees than that, you’d probably choose to have multiple shifts, or multiple servers or cooks working at once, before it’d be worthwhile to add a delivery person.
Around here, there are a couple of businesses that are nothing but food delivery: They don’t actually make any food themselves, they just go around to the restaurants that don’t do their own delivery, pick up food, and bring it to you. If there’s such a business around you, there might be even less incentive for a small restaurant to offer delivery, since they can just get listed with the delivery company at no hassle to themselves.
There was a Doper who worked as a driver for one of these companies, who developed an attraction for a woman he often delivered food to, and so he started a thread about the propriety of him asking her out on a date…
This was a year or two back as I recall, but dont remember if her ever actually made his move.
Chronos has the main reason.
Another reason: a place like Domino’s can keep several drivers busy pretty much year-round. A small mom-and-pop pizza joint might wind up paying a driver more to sit around and wait for orders than they’d make by getting extra orders from delivery. This is especially true when wage costs are high because the number of orders required for break-even goes up.
And my favorite pizza joint up here in Seattle doesn’t deliver and I wouldn’t want them to. Their pizza is amazing right out of the oven, but it doesn’t travel well.
My aunts used to own a small pizza shop in a small town in West Virginia. It was the two of them and two other employees.
They would make large deliveries to local factories or the county racetrack, but they couldn’t spare the manpower to deliver small orders. They used to say if the pizza is good enough, people would gladly come to them.
Besides the above answers, remember that Papa John’s and Dominoes are completely built around a delivery model. When that’s all you do, you can optimize for it. You don’t have to worry about seating customers, having much parking, dishes or dishwashers, etc., etc.
Large corporate franchises don’t make the pizza, they’re assemble pizza pieces. At Domino’s, even the crust comes pre-made and in pizza rounds. Ingredients are pre-measured. For a while Domino’s was experimenting with using frozen pre-made pizzas that could be heated in an oven. I don’t know what happened to that experiment.
The end result is that these companies are pizza assembly lines that can churn out product without a lot of labor or skill. Include a few underpaid drivers, and you have a business. No one gets a Domino’s pizza because it actually tastes good. They get one because you can get one fast, and it’s big, and it’s cheap.
Local shops, on the other hand, make their own product from scratch. That’s labor intensive and takes a lot of skill and time. They can’t churn out pizzas at the rate a big chain can. However, if the pizza is good, and the atmosphere is nice, people will come to you, so there isn’t a need for delivery.
After all, if a local shop can’t make better pizza than Domino’s or Papa John’s, it has no reason to stay in business.
It’s pretty much a matter of quality vs. convenience.
It got transferred to the DiGiorno division.
Here in Bogota, Colombia, everybody delivers. Even drug stores. If they sell it, they deliver it too. Good for business. Almost all deliveries are by motorcycle. Cheap delivery.
I worked in pizza and pizza delivery for about 6 years.
The answer is profit margin. The cost of a pizza breaks down like this:
Food costs (Cost of a pizza): ($3, but usually 20-25% of the sale price, making the markup ~400% for each pizza sold.)
Fixed costs: Rent, franchise fees, administrative costs, etc.: 25%.
Other costs: Labor, drivers, managers, cheese/peppers/napkins, etc. 25%.
Total costs = 75% of the sale price of the pizza, profit is 25% per pizza.
When a pizza is delivered, the additional cost to the store is ~$1.35 (Dominoes) to $2 (Pizza Hut.) Therefore, if we go by the formula above, the minimum cost of a delivery must be $8 to break even, and $10 for the store to have even a minimal profit.
When I worked (1990-1996) we would tell people that the minimum order for delivery was $10, which is referred to as the “per ticket average.” It may be different now.
All the local pizza parlors where I am (8 I can think of - none are chains) deliver.
My company sells point of sale computer systems to primarily pizza shops, primarily Mom and Pop or 2 or 3 location places, and primarily in Ohio.
One reason I’ve heard, besides those mentioned above, is insurance costs. For some reason, the small business owners have some sort of insurance obligation to satisfy. Either that, or they are just going out of their way to help the delivery guys.
The major chains I worked for all required that the driver have current state minimum insurance coverage of their own. However, every single non-commercial policy (the ones pizza guys can afford) that I’ve ever seen had a “you’re not covered at all if you’re delivering” clause. Commercial insurance would cover that, but it would be prohibitively expensive for the driver. The chain gets to have all of it’s drivers insured, but in actuality none of them are really covered in the event of an on the job accident.
The smaller places, from my experience, are either trying to cover the delivery guy on their own insurance in order to make the job worthwhile, or they’re obligated to insure the driver due to some other form of insurance that they carry as a business. Maybe their small business loan or insurance policy says that drivers need to be insured by the store in order to minimize liability.
Also, not delivering really simplifies things from a small shop’s standpoint. No drivers to reimburse, no late deliveries to comp, no distance between you and all of your employees. It ends up being more controlled, and depending on the store and market, might actually be a better idea in some cases.
If the bottom line of the store were to improve by delivering, they will, but if offering delivery compromises the already tight profit margin, they won’t.
i agree with that. We have a half dozen small shops within one mile of our house, and most deliver; but we prefer to pick up from a brick oven place that has the best crust. The pizza is a couple of bucks more, but it is so much better, it is worth the expense and trouble to pick it up.
Back in the day, going out for pizza was a big deal. Pizza was mainly served in restaurants, and the whole family would go. The tables even had tablecloths! There were no second pizza deals like today, and people would often get pasta or salad on the side to fill up. The equivalent today would be like going to a chain restaurant like PF Chang’s. Ordering pizza was extremely rare, and only for people who wanted the taste of pizza and were willing to sacrifice the restaurant experience. For example, my family would only order pizza for delivery if the adults were too tired to cook or drive.
However, Dominoes nearly single-handedly changed the image of pizza from a restaurant food to a cheap fast food, and they stressed convenience and speed. Dominoes also pioneered the coupon deal. Part of their early business model was having employees cover the neighborhood with fliers full of coupons, and boxes had coupons glued to them to encourage repeat business.
Nowadays, the culture of pizza has changed. The only pizza people eat in restaurants would be considered “gourmet.” California Pizza Kitchen, for example, use exotic ingredients (shrimp, pesto, tandoori chicken, etc.) and a wood fire oven to get pizza’s image up again. Few people today consider a franchise pizza to be worth the trouble of going to a restaurant for.
The big example of this is Pizza Hut. In the 70’s, they dominated the pizza market with about a 90% market share. When Dominoes arrived, Dominoes took about 20%, and Pizza Hut completely freaked out. Pizza Hut rolled out with a delivery blitz to challenge Dominoes on the delivery front, and slashed the price on their pizzas. In the mid 90’s, Pizza Hut captured about a 60/40 lead in the delivery wars vs. Dominoes, and Dominoes was driven out of some markets.
However, the damage to the brand was incredible. Restaurant business dropped by 80%. Many restaurants closed, switched to delivery, or were purchased by other franchisees (in my state, most of the Pizza Hut restaurants are also Taco Bells.) This brush with bankruptcy opened up the market, allowing Dominoes to make a recovery, and allowing for other competitors like Papa Johns to enter the market.
Today, we can get ridiculous deals on pizza, but personally, I miss the days when “going out for pizza” was actually a quality experience, and I didn’t have to pay $20 for an 8" pizza with coleslaw on it.
When I worked at a small local place place, during my sordid youth, the delivery driver was also the dishwasher. That way you didn’t have a driver “just sitting around” when he wasn’t out on deliveries. He served both functions, but we could do with out him for the periods of time that he was out on deliveries. We also charged (and I find most places do) a $3.00 fee to cover the costs related to delivery. The main concern for the boss/owner was insurance. When one of our drivers got in an accident while on the job, there was a serious discussion about whether or not to continue delivering due the resulting rise in the insurance costs.
I never thought of it that way, but I think you’re right. When I was a kid, most of the Pizza Hut locations were the full-service restaurants with a distinctive red roof, as in this picture. But the locations I’ve seen recently are just storefronts that only offer delivery service.
All of the many pizza places around here deliver - chain and independent. Except one, which has “legendary” pizza (the stuff you get when you are visiting home after living away). They are closed on Mondays, don’t open until 4, only accept cash, close for a week at a time when the owner goes on vacation, have the worst parking lot of any store ever…and are always packed.
They don’t need to deliver because they’re so good, people come to them.