How to Set Delivery Fees, Minimum Orders, and Delivery Zones That Make Money (2026)
Most restaurants set their delivery fee by copying the pizza place down the street. That's how you end up paying $12 to send out $18 of food and calling it growth.
Short answer: work out your cost per drop first, then everything else follows. Add up driver time, mileage, packaging, and refund risk — most independents land at $10 to $13 per delivery. Charge a fee that covers 40% to 60% of that (usually $2.99 to $5.99), set your minimum order at (cost per drop − fee + your target profit) ÷ gross margin, and draw zones by drive time, not by distance. Three zones, each with its own fee and its own minimum. Nothing past 20 minutes, door to door.
Those three numbers — fee, minimum, zone — are the whole game. Get them right and delivery pays for itself and then some. Get them wrong and you're running a courier service that gives away food.
Start with one number: your cost per drop
You can't price delivery until you know what one delivery costs you. Not the app's number. Yours.
Cost per drop is everything delivery adds that dine-in doesn't have. Here's what it looks like for a typical independent in 2026.
If you use your own driver:
- Driver time — a 20-minute round trip at $18/hour loaded (wage plus payroll taxes): $6.00
- Mileage — 5 miles round trip at roughly $0.70 a mile: $3.50
- Packaging — vented box, bag, seal, napkins: $2.00
- Refund and remake risk — about 2% of a $40 order: $0.80
- Cost per drop: about $12.30
If you use an on-demand courier:
- Courier fee, flat per drop: $7.99
- Packaging: $2.00
- Refund risk: $0.80
- Cost per drop: about $10.79
Two things to check before you copy those numbers. Look up this year's IRS standard mileage rate — it changes every January, and it's the cleanest way to price wear, fuel, and insurance in one figure. And time an actual round trip on a Friday at 7 p.m., not a Tuesday at 10 a.m. Parking, elevators, and a locked lobby door add five minutes each, every single time.
Write your number on the wall. Everything below runs off it.
How much should you charge for delivery?
Here's the honest rule: your fee should cover 40% to 60% of your cost per drop. The rest comes out of the margin on a bigger basket.
Why not 100%? Because a $12 delivery fee doesn't sell. Guests are used to seeing $2.99 to $5.99, and anything much above that reads as a penalty. You're not trying to break even on the fee — you're trying to stop the fee from being a donation.
So with a $12.30 cost per drop, charge $4.99. You're absorbing $7.31, and the order has to earn that back. It usually does, easily, as long as the order is big enough. That's what the minimum order is for.
A few things that actually move the number:
- Free delivery is a discount you forgot to name. If you'd never hand a guest $5 off, don't hand them $5 of driving.
- Price the fee, not the food — mostly. A 10% to 15% markup on delivery menu prices is normal and guests accept it. But hiding the entire drop cost in menu prices makes your food look expensive next to your own dine-in menu, and guests compare.
- Charge in whole-ish numbers. $4.99 outperforms $5.00 in almost every test anyone has run, and $3.95 feels smaller than $3.99 to more people than you'd think.
- Don't stack fees. A delivery fee plus a service fee plus a small-order fee plus a bag fee is how you get a one-star review about a $6 burrito. Pick one. If you're already running a service charge on dine-in, think hard before adding it to delivery too.
- Show it early. Several US states now have price-transparency rules aimed at surprise fees at checkout. Beyond the legal side, a fee revealed on the last screen is the single biggest cause of abandoned carts. Put it on the menu page.
The minimum order formula
This is the lever most owners are scared of, and it's the one that pays best.
Minimum order = (Cost per drop − Delivery fee + Target profit per drop) ÷ Gross margin %
Let's run it. Cost per drop $12.30. Fee $4.99. You want each delivery to leave at least $8 of gross profit behind after paying for itself. Your food cost is 30%, so your gross margin is 70%.
($12.30 − $4.99 + $8.00) ÷ 0.70 = $15.31 ÷ 0.70 = $21.87
Round it to $22, or $25 if you like clean numbers. That's your floor. Below it, you are working for the joy of it.
Then run the sanity check: a delivery minimum should sit around 1.5× your dine-in average ticket. If your dine-in average is $22, that points at $33 — well above the formula's floor.
When the two disagree, don't split the difference and hope. Start at the floor, then walk the minimum up $5 at a time and watch what happens to your profit per drop. Most kitchens find they can push it two steps higher than they feared before order count really suffers.
Two details that matter more than they should:
- Apply the minimum to the food subtotal, before fees, tax, and tip. Otherwise a guest hits $25 with a $6 fee and $22 of food, and you're back where you started.
- Show the minimum on the menu page, not at checkout. Nobody enjoys building a cart and finding out at the end.
Delivery zones: stop drawing circles
A circle on a map is not a delivery zone. It's a wish.
Hot food has one honest limit: 20 minutes, door to door. Past that, fries go soft, sauce separates, and the guest blames your kitchen, not your distance. So zones get drawn by drive time at your busiest hour, then adjusted for the real world.
Here's the three-zone model that works for most independents:
| Zone | Drive time, one way | Typical city distance | Fee | Minimum order |
|---|---|---|---|---|
| A — core | under 8 minutes | 0 to 1.5 miles | $2.99 | $20 |
| B — standard | 8 to 15 minutes | 1.5 to 3 miles | $4.99 | $30 |
| C — edge | 15 to 20 minutes | 3 to 5 miles | $7.99 | $45, or courier only |
| Outside | over 20 minutes | — | no delivery | pickup only |
Notice what that does. It doesn't just charge more for distance — it raises the minimum with the distance, so far orders have to be worth the trip. A $20 order 4 miles away is a loss. A $45 order 4 miles away is a good night.
Cut your zones around real obstacles, not radius lines:
- Rivers, highways, and railway lines with one crossing point
- One-way systems that turn a half-mile into a 12-minute loop
- Big parks, campuses, and industrial estates with no through road
- Gated communities and towers where the driver waits 8 minutes in a lobby
- Office parks after 6 p.m. — nobody's there, and the entrance is locked
Use post codes or neighborhood names where you can. A radius cuts streets in half, and then a guest two doors down from someone who gets delivery doesn't. Post codes are easier for staff to explain and easier for guests to accept.
Shrink at peak, widen when it's quiet. Zone C on a dead Tuesday is free money. Zone C on Friday at 8 p.m., when the line is buried, is a cold pizza and a refund. Plenty of kitchens now switch Zone C off during the rush, and give delivery its own hours separate from the dining room.
Most free platforms let you set maximum delivery distance, minimum order amount, and delivery fee per branch, so the rules live in the system rather than in a waiter's head. Tabres does this at branch level, for example, alongside separate delivery hours.
When free delivery actually makes money
Free delivery over a threshold is one of the best upsell tools in hospitality — and one of the fastest ways to lose money when the threshold is set by feel.
The math: giving up a $4.99 fee at a 70% gross margin means the basket has to grow by $4.99 ÷ 0.70 = about $7.13 just to break even. But here's the catch nobody accounts for — most orders that clear the threshold would have cleared it anyway. You're paying for behavior you already had.
So set the threshold 40% to 60% above your current average delivery ticket.
If your average delivery ticket is $38, put free delivery at $55, not $45. High enough that people have to stretch for it, close enough that stretching feels doable. Then watch your average ticket for a month. If it barely moved, your threshold was too low and you just gave away fees.
And keep free delivery inside Zone A. Free driving to the edge of your map is a fast way to make your worst orders your most popular ones.
Where the money quietly leaks
Four leaks show up in almost every delivery operation:
- Packaging is under-budgeted. Owners guess $0.80 and the real number is $2.00 to $3.00 once you count the vented container, the bag, the tamper seal, the cutlery, and the sauce cups. Count it properly for your three best-selling delivery items and use that.
- Card processing on the fee. You pay roughly 2.9% plus $0.30 on the whole transaction — including the delivery fee you just charged. Small, but it's real.
- Tax on the delivery fee. In some US states a separately stated delivery charge is taxable, in others it isn't, and the answer can flip depending on how you show it on the receipt. Confirm with your state's department of revenue or your accountant before you launch. In the EU, delivery often sits in a different VAT band from dine-in — we broke that split down in VAT on dine-in, takeaway, and delivery.
- Driver tips treated as pay. A tip is the guest's thank-you, not your wage subsidy. Build your cost per drop assuming zero tips, then treat anything that arrives as a bonus for the driver.
A real before-and-after
A pizzeria doing 30 delivery orders a day. Flat $2.99 fee, $15 minimum, one 4-mile circle on the map. Average delivery ticket: $28.
Before. Gross margin at 70% is $19.60 an order. Average cost per drop is $12.30, and the $2.99 fee covers part of it, so delivery costs $9.31 net. Contribution per order: $10.29. Across 30 orders a day, that's about $9,260 a month.
After. They split the map into three zones, raised the minimum to $25, and tiered the fee. Orders fell 15%, to 26 a day. But the average ticket climbed to $36, the average fee collected rose to $4.60, and the tighter core zone dropped the average cost per drop to $10.50.
New contribution per order: $25.20 − ($10.50 − $4.60) = $19.30. Across 26 orders a day, that's about $15,050 a month.
Roughly $5,800 more every month, on four fewer orders a day. Same kitchen, same staff, same food. Just three numbers set on purpose instead of by habit.
That's the part owners find hardest to swallow: fewer delivery orders is often the right answer. Volume feels like success. Contribution per drop pays the rent.
How to change your fees without losing customers
- Change one thing at a time. Raise the minimum, or tier the fee, or redraw the zones — not all three in the same week. You'll never know which one worked.
- Give it three to four weeks. The first week always looks bad. Regulars need a couple of orders to adjust.
- Track contribution per drop, not order count. Order count is the vanity number here.
- Watch checkout abandonment. If people are building carts and leaving, your minimum is above what they want to spend, not just above what they expected.
- Don't apologize when you announce it. "Delivery is now $4.99 within 3 miles, $25 minimum." That's it. No paragraph of explanation. Guests accept clear rules and argue with defensive ones.
- Grandfather nobody. Two fee structures running at once is a staff nightmare and a review magnet.
Mistakes that turn delivery into a hobby
- A zone drawn on a map instead of driven on a Friday. The most common one, by a mile.
- One flat fee for every distance. You're subsidising your worst orders with your best ones.
- A minimum set by what feels polite. $10 minimums are not generous, they're expensive.
- Free delivery with no threshold. Name it or lose it.
- Never recalculating. Wages, fuel, packaging, and courier rates all moved in the last year. Your cost per drop from 2024 is fiction now. Redo it every six months.
- Ignoring the fee stack. Delivery fee, service fee, small-order fee, and a tip prompt on one screen is how a $24 order becomes a $34 order and a bad story.
Delivery fees and minimums FAQ
How much should a restaurant charge for delivery? Between $2.99 and $5.99 for most independents in 2026. Aim to cover 40% to 60% of your cost per drop, which is usually $10 to $13 per delivery once you count driver time, mileage, packaging, and refund risk.
What is a good minimum order for delivery? $20 to $35 for most kitchens. Calculate it as (cost per drop − delivery fee + target profit per drop) ÷ gross margin, then check it against roughly 1.5× your dine-in average ticket and take the higher of the two.
How big should my delivery zone be? No more than 20 minutes door to door at your busiest hour. In a dense city that's often 1.5 to 3 miles. In a spread-out suburb it can be 4 to 5 miles. Measure by drive time, never by a circle on a map.
Can I charge different delivery fees for different zones? Yes, and you should. Distance-tiered fees with matching minimums are the single most effective change most restaurants can make to delivery profit. Keep it to three zones so staff and guests can both follow it.
Should I offer free delivery? Only above a threshold set 40% to 60% higher than your current average delivery ticket, and only inside your closest zone. Free delivery on everything is a permanent discount with no marketing benefit.
Should delivery prices be higher than dine-in prices? A 10% to 15% markup on delivery menu prices is standard and widely accepted. Just don't try to bury the entire delivery cost there — guests do compare your two menus.
Is the delivery fee taxable? It depends where you are, and often on whether the charge is stated separately on the receipt. Check with your state's department of revenue or your accountant. In the EU, delivery may carry a different VAT rate from dine-in.
Do delivery fees go to the driver? No — the fee covers your cost of getting the food there. Tips go to the driver. Say this plainly on your menu page, because a lot of guests assume the opposite and tip less because of it.
Delivery isn't a technology problem or a marketing problem. It's three numbers, and almost nobody calculates them.
Work out your cost per drop this week. It'll take an hour with a stopwatch and a calculator, and it'll probably annoy you. Then set a fee that covers half of it, a minimum that pays you for the trip, and three zones drawn by the clock instead of the map.
You'll send out fewer orders. You'll keep a lot more of them. And you'll finally know, on a Friday night, whether that ticket going out the door is worth the drive — before the driver leaves, not at the end of the month.
