Starting from the same place
Two NZ restaurants. Same city, similar average spend, both using booking platforms to fill tables. One is on a commission model. One is on LocalFeed, which charges venues nothing on the food bill.
Both do 200 platform-sourced covers per month. Average spend per cover: $45 (conservative for a cafe lunch), $90 (standard restaurant dinner).
The numbers below are not hypothetical. They are the direct output of the commission structures that exist in the NZ market.
The platform does not cook the food. They do not carry the food cost. But they take a percentage of every dollar that food earns.
What commission-based models take
The standard commission range for reservation platforms in NZ sits between 2% and 5% per booking. This is applied to the total booking value including food, or in some cases the cover charge component.
Platforms with a forced discount model take the discount value rather than a percentage, but the effect on your margin is similar or worse, depending on your food cost structure.
Cafe scenario (200 covers, $45 average, 3% commission):
- Monthly gross from platform covers: $9,000
- Commission paid to platform: $270
- Annual commission: $3,240
Restaurant scenario (200 covers, $90 average, 3% commission):
- Monthly gross from platform covers: $18,000
- Commission paid to platform: $540
- Annual commission: $6,480
At 5% commission those numbers become $4,500 and $10,800 per year.
STAT: $10,800/year · What a restaurant doing 200 covers at $90 average hands to a 5% commission platform — before a single ingredient is bought
NOTE: Run these numbers against your own cover count and average spend before renewing any platform agreement. Most venues have never done this calculation.
These figures assume the commission is taken on gross revenue before your costs. Your food cost is already accounted for separately. The commission comes out of your gross, which means it comes out of your actual operating margin.
The forced discount model: a different problem
Some NZ platforms do not charge per-booking commission. Instead they send you discounted diners: typically 50% off the food bill at a specific time slot.
The platform charges the diner a fee (usually around $10) to unlock your discount. You see none of that fee. You carry the full discount.
The maths here is less obvious but the impact is often worse:
At a 70% food cost ratio (tight but realistic for a cafe), your gross margin on a $45 meal is $13.50. After a 50% discount, your revenue drops to $22.50. At the same 70% food cost (which does not change), your gross becomes $0.
You have covered your food cost and nothing else. Labour, rent, utilities, and every other fixed cost comes from zero contribution on that cover.
Some venues make this work because the beverage margin compensates. But that requires high per-table beverage spend. If your model is primarily food-led, forced discounting is structurally damaging.
You did not design that discount. You did not choose that price. But you carry the full cost of it. That is the forced discount deal.
What commission-free looks like over 12 months
On LocalFeed, venues set their own offers at their own pricing. The platform takes nothing on the food bill. Discovery is free. Listing is free.
Using the same scenarios:
Cafe (200 covers, $45 average):
- Monthly gross from platform covers: $9,000
- Platform fee on food: $0
- Annual retained: the full $9,000 per month
- 12-month difference vs 3% commission: $3,240 retained
Restaurant (200 covers, $90 average):
- Monthly gross from platform covers: $18,000
- Platform fee on food: $0
- Annual retained: the full $18,000 per month
- 12-month difference vs 3% commission: $6,480 retained
That is real margin that stays in your business. It is not a savings figure or a projection. It is what you keep when the platform is not taking a percentage.
What you are actually buying when you pay commission
The argument for commission platforms is access. They bring you diners you would not have found otherwise. For a new venue with no profile, that can be true in the early months.
But most venues that have been running commission platforms for more than 12 months are not using them for new customer acquisition. They are using them for bookings from people who already know the venue exists, or who would have found it through Google anyway.
That is not a traffic problem being solved. That is a margin problem being created.
The question to ask is: what percentage of your platform bookings come from people who would not have found you without that platform? For most established NZ venues, that number is lower than the commission rate justifies.
The customer ownership dimension
Commission platforms own the customer relationship. When a diner books through their system, their data sits in the platform’s database, not yours. If you leave the platform, you leave without that booking history.
LocalFeed works differently. The venue controls the offer, the pricing, and the customer touchpoint. The platform connects discovery to booking. The relationship belongs to the venue.
Over time, that difference compounds. A venue with a direct customer database of 1,000 opted-in diners is more resilient to platform changes, fee increases, or algorithm shifts than a venue whose customer awareness lives entirely inside a third-party system.
How to evaluate this for your own venue
Pull your last 90 days of platform booking data. Calculate:
- Total covers from the platform
- Total revenue from those covers
- Commission or discount cost applied
- What percentage of that commission you are confident represents genuinely new diners who would not have found you otherwise
If the genuinely new diner percentage is low, you are paying commission tax on your existing customer base. That is the most expensive way to manage bookings.
FACT: Zero commission on food revenue. $10/week after 20 bookings. 75% of no-show fees go to the venue, not the platform.
LocalFeed lets NZ venues list their offers and reach local diners without paying a cent on the food bill. See how it works and list free.