Commission-based and commission-free are not different pricing tiers for the same service. They are different business relationships. One platform earns more when you earn more. The other earns $10 a week regardless of your cover count. That distinction determines which direction the platform’s incentives point, and it matters more than the percentage figures do.
How the commission model compounds against you
Commission starts small. One point five percent. Three percent. On a $90 table spend, that is $1.35 to $2.70 per cover. Manageable, you think, when you are signing up and the platform’s sales rep is talking about reach.
Then your bookings scale. You are doing 100 covers a week from the platform. At 3% commission on a $90 average that is $270 per week in commission. $1,080 per month. $12,960 per year. The platform’s revenue from your venue grew proportionally with yours. You provided the kitchen, the team, the menu, the fit-out. They processed the reservation and took a percentage of everything you produced.
The commission model is designed to scale. It scales your costs in direct proportion to your success.
At lower cover counts, commission feels insignificant. At the volumes where it starts to matter, you are already dependent on the traffic they send and switching feels risky. That alignment of dependency with rising costs is not a coincidence.
STAT: $12,960/year · Commission cost for an Auckland venue doing 100 platform covers per week at $90 average spend and a 3% commission rate. Before accounting for any discount or data costs.
The forced-discount model is not a better alternative
Some NZ booking platforms present themselves as commission-free. What they mean is: instead of charging commission, we require you to offer 50% off food to our diners. The platform charges diners a booking fee of $10–$15 and keeps it.
On a $90 food bill at 66% gross margin: your normal food gross is $59.40. After the 50% forced discount, your food revenue drops to $45 and your gross falls to $15.40. You gave up $44 in margin. The platform kept $10–$15 of the diner’s booking fee. No commission invoice. $44 out of your kitchen regardless.
This is not a better model for the venue. It is the same transfer of value dressed differently. The hidden fees restaurant platforms charge are structured differently across models but the direction of transfer is identical.
NOTE: When a platform describes itself as commission-free, ask whether they require a fixed discount. Calculate the actual per-cover margin cost of that discount and compare it to what a commission rate would cost on the same covers. One of those numbers will be larger.
What flat-fee commission-free looks like
A platform that charges $10/week flat has fundamentally different incentives. It does not earn more when you do more covers. It earns the same $40 per month whether you do 20 bookings or 200.
That means the platform’s interest is in you staying subscribed, not in extracting a percentage from every booking. The incentive is to provide ongoing value rather than to maximise volume through your account.
For a venue doing 80 covers per month from a flat-fee commission-free platform versus a 3% commission platform at $95 average spend:
| Commission (3%) | Flat-fee commission-free | |
|---|---|---|
| Platform fee | $228/month | $40/month |
| Forced discount cost | $0 | $0 |
| Annual cost | $2,736 | $480 |
| Difference | $2,256 back in your margin |
The $2,256 annual difference is a staff training budget, a new POS system, or six months of social media spend. It is a real cost on real margin.
The data ownership question
Commission and forced-discount platforms share one feature regardless of pricing model: they own the customer data.
Every booking processed through a third-party platform adds a record to their database. If you cancel your account, those months of customer interactions and contact details do not transfer. They stay with the platform.
A Christchurch cafe doing 70 platform covers per month accumulates 840 customer interactions annually. At a reasonable repeat visit rate, an owned list of 840 local diners is worth more in direct revenue than the platform traffic is worth in filled covers. Without owning that data, you are perpetually renting your own regulars from someone else.
You served the food. Your team took the orders. Someone else filed the customer in their system. That is the arrangement on the customer data side.
FACT: Zero commission on food revenue. $10/week after 20 bookings. 75% of no-show fees go to the venue.
The model difference between commission and commission-free is not about percentage points. It is about who the platform is financially aligned with. If the platform earns a cut of your revenue, it is working with you on its terms. If it charges a flat fee regardless of your performance, it is working for you. LocalFeed charges flat because it should be on the same side as the venues using it.