In the bustling halls of the recent Food on Demand conference, a paradox was unfolding. As DoorDash and Uber Eats executives took the stage boasting about the "millions of consumers and billions of dollars" they bring to restaurants, those same restaurants were huddled in corners comparing notes on how to mitigate costs and maintain control of their businesses. This disconnect reveals a critical missed opportunity in the restaurant industry: the power of collective bargaining.
David vs. Goliath: The Current Landscape
The relationship between restaurants and third-party delivery platforms resembles a collection of David vs. Goliath battles, with one critical difference—the Davids refuse to join forces. Restaurant operators across the country are engaged in individual negotiations with delivery giants, each hoping to secure better terms than their competitors.
These conversations focus on familiar concerns:
- What percentage of revenue comes from third-party orders
- How to balance orders between different delivery platforms
- Finding the optimal balance between price markups and demand generation
Yet these negotiations occur in isolation, with brands reluctant to share detailed information or strategy with perceived competitors.
The Untapped Power of Numbers
At a CMO Summit over six years ago, I witnessed this phenomenon firsthand. Brands ranging from 200 to 900 units each lamented their lack of negotiating leverage compared to industry giants like McDonald's. What they failed to realize was the collective power they already possessed.
A quick mental calculation revealed over 40,000 locations represented in that room—a number that would command attention from any delivery platform. When I suggested collaborative negotiation, the response was telling: complete disinterest. The competitive mindset that helps these brands succeed in attracting customers was actively preventing them from securing better terms from shared vendors.
Beyond Zero-Sum Thinking
This reluctance to collaborate reflects a fundamental misunderstanding of competitive advantage. Restaurant brands view each other primarily as competitors for the same customer dollars, but this zero-sum mindset ignores the reality that third-party delivery platforms represent a shared challenge—and opportunity.
Consider the airline industry, where competing carriers formed alliances like OneWorld and Star Alliance to create mutual benefits while maintaining their individual identities. Or the entertainment industry, where streaming services sometimes collaborate on technology standards while competing fiercely for content and subscribers.
The Collective Advantage Approach
What might collective bargaining look like in the restaurant space?
Standardized Commission Structures Rather than each brand negotiating different fee structures, a restaurant collective could establish industry baseline terms that benefit establishments of all sizes.
Data Sharing Agreements Restaurants could demand consistent, comprehensive data access across platforms, ensuring every brand can make informed decisions about their delivery strategy.
Marketing and Promotion Standards Collective agreements could address how restaurants are represented on platforms and establish fair promotional requirements that don't favor certain brands.
Technology Integration Protocols A united front could push for standardized integration methods that reduce the technical burden on individual restaurant IT teams.
Moving Beyond Competition to Coopetition
The path forward requires a shift from pure competition to what business strategists call "coopetition"—strategic cooperation between competitors for mutual benefit.
This doesn't mean restaurants stop competing for customers or compromising their unique value propositions. Rather, it means recognizing areas where their interests align and leveraging their combined scale to create better outcomes for all.
A Call to Action
As delivery platforms continue to grow and consolidate power, the window for restaurants to establish more favorable terms narrows. Industry associations and restaurant groups have the opportunity to facilitate these conversations in ways that don't violate antitrust concerns while still creating value for their members.
The next time restaurant executives gather to compare notes on their third-party delivery challenges; they might consider a different question: "What could we accomplish together that none of us can achieve alone?"
Because while a single 100-unit chain might not command the attention of delivery giants, tens of thousands of locations speaking with one voice certainly would. In an industry where margins are already thin and disruption is constant, this untapped collective advantage might be the most powerful tool restaurants aren't using.
The competitive spirit that drives culinary innovation and customer experience excellence serves the industry well—but sometimes, the smartest competitive move is knowing when not to compete.