The conversation hospo owners avoid having with themselves
Most venue owners I talk to know they are paying more than they should for their bookings. They feel it at the end of the month when the numbers do not add up. But they have not sat down and run the actual maths. This article does that.
I am not going to name names in every paragraph. You can work out which platforms I am describing. The point is the structure, not the brand.
The two main models and what they take
Model 1: Cover commission
A percentage of each booking total, paid to the platform. Ranges from 1.5% to 5% depending on the platform, your plan tier, and how desperate they think you are when you sign up.
On a table of four spending $120 on food: that is $1.80 to $6.00 gone before you have paid for a single ingredient, a staff member, or your power bill. Run 20 covers a night from platform bookings and you are losing $36 to $120 per session. Every session. Every week.
Multiply that by 52. That is $1,872 to $6,240 per year, from a single table average. Scale that to a venue doing 80 platform covers a week and you are looking at $7,488 to $24,960 annually going to a platform that never cooked a single dish.
STAT: $24,960/year · What a venue doing 80 covers a week hands to a 5% commission platform. That is a commercial refrigeration upgrade, a full kitchen hire, or six months of marketing spend.
The platform never cooked a dish. They never turned a table. They took a percentage of everything you produced and called it a service fee.
Model 2: Forced discount
No upfront commission, but you must discount. A platform sends you diners at 50% off at specific times. You carry the full discount. You keep your margin on beverages, but food margin takes a direct hit.
On that same $120 table: if the food portion is $90 and you are running at 70% food cost (tight for a cafe), your food gross is $27 before the discount. After a 50% discount on the food component, your food portion revenue drops to $45. At 70% cost, you now have $13.50 gross on food. You still have labour, power, and your other fixed costs. That table is a break-even at best.
The platform counts that as a “successful cover.” They charge the diner $10 to unlock your discount. They keep it. You carry the risk.
What you are actually paying for
When you hand margin to a booking platform, you are paying for:
- Traffic from people who were already looking to eat out
- A reservation system you could run on a free Google Form or a $30/month booking tool
- A brand presence on a platform that brands itself, not your venue
- A customer relationship that belongs to the platform, not you
The diner books through them. The data sits in their system. If you leave the platform, that customer history is gone. You cannot market to them. You cannot build a loyalty programme. You cannot even send them a reminder about a new menu.
You pay commission or carry the discount, and you own nothing on the other side.
You built the reputation. You trained the team. You developed the menu. The platform gets a cut of all of it because they processed the reservation.
NOTE: Before signing with any booking platform, ask who owns the customer data after the meal. If the answer is the platform, you are building their business, not yours.
What commission-free looks like in practice
A venue on LocalFeed sets their own deal. They might list a Monday lunch special at their standard menu price, or a 10% off early seating that makes sense for their margins. They set the terms. They decide the times.
When someone books, they pay through the venue’s own system. LocalFeed earns nothing on the food bill. The venue keeps the customer relationship and the data.
Over a year, a venue doing 40 covers a week from LocalFeed versus a 3% commission platform keeps an extra $5,616 in margin on a $120 average spend. That is a commercial kitchen upgrade. That is two weeks of wages. That is a marketing budget for the next quarter.
The question to ask before you sign
Before you sign with any booking platform, ask:
- What percentage of each booking goes to you?
- Who owns the customer data after they eat with me?
- If I leave, what happens to my booking history and customer database?
- Can I set my own pricing and discount levels?
- What happens to my margins when you run a promotion I did not ask for?
If the answers to those questions are uncomfortable, the platform is not aligned with your business. It is aligned with its own growth.
Running the numbers for your venue
Take the last 30 days of platform bookings. Multiply the total cover count by your average spend. Apply the commission rate you are paying (or the discount percentage you are carrying). That number is what you contributed to a platform’s revenue in a single month.
Now ask whether that traffic was worth that cost, or whether you could have brought those diners in through your own channels for less.
In most cases, the honest answer is yes, you could. The barrier is not the economics. It is the habit of relying on someone else to fill your tables.
FACT: Zero commission on food revenue. $10/week after 20 bookings. 75% of any no-show fee goes directly to your venue.
LocalFeed was built to break that habit. Commission-free discovery for NZ venues, owned by the venues that use it. List your venue free here.