08/20/2026
Hey everyone, it's Kevin with the Food KAB, and today we're here to talk about the unpleasant side of the business: the fees.
And before we get into it, I know what you're thinking… "Kevin!! You're sharing too much information!" But hear me out: this business is built on transparency, so I am choosing to speak openly about the ugly side of online ordering.
First, let's address the change some of you noticed. Recently, we stopped listing fees at checkout and started building them into the menu prices instead, the same way prices already work on DoorDash and Uber Eats. But here's the difference: on those apps, the restaurants mark up the prices to cover the 30%+ they're being charged, and nobody ever shows you the recipe. We built it into the price AND now I'm going to hand you the entire recipe. Every ingredient. That's the whole point of this post.
FEES suck. I hear you. But let me start by asking you a question: The larger companies, DoorDash and Uber Eats, charge merchants 15-35%+. In fact, the last several companies I've had this conversation with have all been at 30-35%, before marketing expenses. So if the bigger companies are charging that much, how does a smaller company survive on less?
Honestly? Barely. But we do come in under them, landing at 25%, and this is how we get to 25%:
-15% is the KAB's Service Fee
-5% is to help cover credit card fees
*In July, that same 5% collected $1339.48, whereas our Square Fees were $1458.17. PERSPECTIVE!
-5% is the newly applied Merchant Fee
*Pickup orders see the 5% cc fee and 5% merchant fee. And before anyone asks why pickup carries anything at all: card fees don't disappear just because you drove yourself, and the app, the ordering system, and the support behind every order aren't free to run.
Now, here's what happened when the fees were listed separately at checkout: it scared away NEW customers. People would load up a cart, see the fee lines, and bail. The moment we built those exact same costs into the menu price instead, we saw a jump in volume. Not a huge jump, just a noticeable influx of new customers. Same math. Different presentation. That's it.
It is well known that DD and UE don't mark up prices; the restaurants do. They put this in plain print on their website/app for all to read, which in a way, is them PUTTING THE BLAME on the restaurants. "The restaurants marked their prices up, not us!" YES, but you're charging the restaurant 30%+.
So, allow me, the owner of Food KAB, to take the blame for the delivery cost, NOT the restaurants. It is, after all, my company; it is my choice to bring delivery to our community. Should the blame not fall on Food KAB? I WILL TAKE THE BLAME WHERE THE BIGGER COMPANIES WOULDN'T DARE!
Let's be honest, DELIVERY IS EXPENSIVE! Our fees don't even include the Delivery Fee, FOR A REASON. The delivery fee is 100% paid to the driver (+100% of tip; we NEVER skim off the tip; we only ever add Bonus Pay when we feel a driver is being underpaid).
I can never discount the Delivery Fee. Last month, in July, we paid out $8,415.58 to drivers, between just 4 drivers. There were smaller payments made to a few Weatherford-side drivers, but not much. 2 of us are full-time. And you want to know the craziest part about that statement? We are considered HIGH VOLUME for a small-market restaurant delivery service.
Now for some honesty about where we are. Nearly 3 years in, we float between 700-900 orders a month, and no, that's not where I want us to be. But there's a reason, and it's one you lived through with us: we've asked our customers to switch apps TWICE. Two platform changes, each one basically a restart, with our current custom build being the 3rd platform you've had to download just to keep supporting us. And here's the part I'm proud of: even after it very much felt like starting over in December and January, our custom build has already beaten the old software's best month THREE times this year. That's not luck. That's you guys, and that's a platform finally capable of consistent growth.
Now, there is still the goal of eventually reducing the overall cost for the customer, and here is my plan for that:
1) First, the volume has to climb significantly. I'm talking 5,000+ monthly orders. The plan: we drop the markup 5% for every 5,000 orders we do per month, stopping once our 15% KAB Service Fee is reduced to 5%.
2) I want to convince merchants to take on the 5% merchant fee themselves, which would bring the marked-up amount down another 5%. Not all merchants (in fact, very few right now) would be willing to do so, because this industry is hitting ALL OF US with so much extra cost and constantly rising food prices. But if we prove the value, I believe more will be open to taking it on.
3) Again, we can never discount the delivery fee, since that goes 100% to the driver.
4) So here's what the endgame looks like at 10,000+ orders per month: a 15% markup on most menus (5% cc fees, 5% for Food KAB, 5% merchant fee), and a 10% markup on menus where the merchant has taken on their 5%. Down from 25% today. I want to be crystal clear on those numbers now, so nobody ever feels like the goalposts moved later.
There is a lot I did not understand about the delivery/online ordering industry before I chose to start Food KAB, and for that matter, still a lot left to learn. I do strongly believe one reason the bigger companies charge merchants so much, yet pay drivers so poorly (drivers are heavily tip-reliant with those companies), is that they can afford the steep discounts given to subscription holders. A subscription was once in play for Food KAB, but I would much rather chase the order volume needed for us to permanently reduce our fees than force our customers into another subscription. Plus, I could never offer discounts as steep as DashPass or Uber Eats One, SIMPLY because we pay our drivers significantly better, and we cannot/will not discount the Delivery Fee.
That concludes today's transparency update!! I hope this was solid, informative reading material for all of you! We hope to see you soon! 🙂
