I started as a pizza delivery driver in university, worked my way through the kitchen, and eventually opened my own location.

I’ve seen food cost from both extremes. At one spot it was once a year on the P&L and a prayer, and honestly not something I had any say in. At another, I was knee-deep in the books myself, trying to actually stay on top of it.
When the numbers were finally mine, I tried to do it right. I built my own costing spreadsheet to do it properly. Every supplier categorized, cost per unit, recipes rolled up into dishes, so when one ingredient price changed, every dish re-costed itself. It worked, but keeping it right was brutal. It kept no history, so I could see what a dish cost today but never how it had been trending. And updating it meant going through every invoice line by line, by hand. Between that and actually running the place, the tool I needed most became the one I never had time to maintain.

So, genuine question for the operators here: how do you actually track your food cost? Monthly? Once a year on the P&L? A spreadsheet? Not at all? Not judging anyone. I’ve been on both ends of this. Just curious how everyone else is handling it.

I co-own a pizzeria in BC (Canada). We’re a franchisee in a small chain. About a month ago, corporate aligned our DoorDash menu pricing with our in-store pricing. So 0% markup now. Before that we had a 10% markup, which I always thought was already on the low side.

I dug into our last four months of DoorDash statements and the numbers are rough. DoorDash is about 30% of our total sales. Commission alone is 18-19%, and after commission, marketing fees, and merchant-funded discounts, DoorDash’s total take is hitting 40-41% of subtotal. After 30% food cost, there’s basically nothing left to cover labour, rent, or anything else.

When I pushed back to corporate, the reasoning was that lower prices help with customer acquisition and there’s “benefit to the locations.” I don’t really see it in the numbers. Feels like we’re absorbing the platform’s costs to grow their order volume.

What markup are you guys running on DoorDash? Ive always thought 20% seemed like a good spot to be as it would at least cover the commission. Anyone actually not markup their DoorDash prices, does it actually work or are you just eating the margin hit? Any wisdom is appreciated.

UPDATE:

Quick update about my franchisor removing our DoorDash markup.

Sent an email laying out the numbers. Total take hitting 40-41% of subtotal, already operating at a loss, 10% markup wasn’t aggressive to begin with, etc. Mentioned that most operators run 15-25% markups and it’s not really industry norm to do matching prices.

Got a response back the same day. They pushed back a bit with growth metrics (sales up 47% YoY, orders up 56%, lots of new customers), but they also implemented a 20% markup across all DoorDash menu pricing immediately. That’s actually higher than the 10% we had before.

So yeah, win. Pretty surprised it moved that fast honestly.

Thanks for everyone’s advice, the perspectives helped me sharpen the case.