Signing with a third-party delivery platform means accepting a contract that controls your commissions, your customer data, and your exposure when something goes wrong. This guide to third-party delivery service contracts, fees, and taxes walks restaurant operators through what the agreements actually say, what the platforms charge, and who is responsible for collecting and reporting tax on the orders that come through the app.
What the Platform Contract Actually Does
The master service agreement with a delivery platform covers far more than order logistics. It grants the platform a license to display your trademarks, logos, menu descriptions, and food photography across the app and in marketing materials. It names the platform as a limited payment collection agent, which means the platform processes all customer payments and remits your share after deducting commissions and fees.
The clause with the longest shadow is the one on customer data. When someone orders through the app, the platform typically retains full ownership of that customer’s name, contact information, and order history. You generally receive no access to individual customer profiles. A restaurant doing hundreds of deliveries a week is building the platform’s customer database, not its own, and that makes it significantly harder to develop direct relationships or run marketing to repeat customers later.
Nearly every platform contract also includes a mandatory arbitration clause paired with a class-action waiver. These provisions require merchants to resolve disputes in private arbitration rather than in court, and they block merchants from joining together in class actions against the platform. Major platforms including Uber, Lyft, and their delivery subsidiaries impose these clauses on both merchants and drivers.1Harvard Law Review. The Market Participant Doctrine and Forced Arbitration Individual arbitration claims often cost more to bring than they’re worth recovering, so these clauses effectively suppress many disputes before they start.
Termination and Deactivation
Platform contracts typically let the platform terminate your account immediately and without advance notice for a long list of reasons: excessive chargebacks, order accuracy complaints, health code violations, or any conduct the platform determines could harm its brand. Termination for convenience, with no stated reason, usually requires only 30 days’ notice from either side. Once deactivated, you may lose access to pending payouts for a holding period while the platform resolves outstanding chargebacks or customer disputes.
Unauthorized Listings
Some platforms have listed restaurants on their apps without the restaurant’s knowledge or consent. The platform scrapes the menu from the web and begins taking orders, often with no quality control over packaging, delivery times, or food handling. Restaurants that never signed anything can find themselves answering one-star reviews for orders they didn’t know existed. Class-action litigation has targeted the practice, and several platforms have since changed their policies to require affirmative merchant opt-in before a listing goes live. If you find your restaurant on an app you didn’t join, demand removal in writing and keep the record.
Commission Rates and Equipment Costs
Delivery platforms charge a commission on every order, and the rate depends on the service tier. Basic plans that only provide delivery logistics without prominent app placement tend to start around 15%. Full-service plans that include premium search placement, a larger delivery radius, and marketing features climb toward 30% of gross order value. At the top tier, a $50 order sends $15 to the platform before you’ve paid for food, labor, or anything else.
Hardware is a smaller line item. If you use a platform-provided tablet to manage incoming orders, the device is typically free during a trial period and then costs around $6 per week. You can avoid that charge by integrating orders through your existing point-of-sale system, email, or fax. Most major platforms charge no activation fees, subscription fees, or cancellation fees for the base marketplace listing.2DoorDash. Merchant Pricing for Marketplace and Commerce Platform
The real hidden cost tends to be menu price inflation. Many platforms allow or encourage merchants to set app prices higher than in-store prices to offset commission fees. When customers notice the markup, trust erodes, and several jurisdictions now require platforms to disclose any difference between app prices and in-store prices.
Local Commission Fee Caps
Several major cities enacted emergency caps on delivery platform commissions during 2020 and 2021, and a number of them have since made those caps permanent. The most common structure limits the delivery commission to 15% of the order total, with an additional 5% allowed for non-delivery services like marketing and order processing. Some cities add a separate cap of around 3% for payment processing.
These ordinances typically include anti-retaliation provisions that prevent platforms from reducing a merchant’s search visibility, shrinking the delivery zone, or degrading service quality as punishment for benefiting from the cap. Enforcement generally falls to local consumer protection agencies, which can impose per-violation fines.
Platforms have challenged the constitutionality of permanent fee caps in federal court, arguing the caps amount to an unconstitutional taking of private property. In at least one case, a federal judge allowed the property-rights claim to proceed to discovery while dismissing arguments based on equal protection and contract interference. The legal question centers on whether the caps prevent platforms from earning a reasonable return. These challenges are ongoing, and the outcome could reshape how far local governments can go in regulating platform pricing.
Sales Tax: The Platform Collects
Marketplace facilitator laws have changed who is responsible for sales tax on delivery orders. Nearly every state with a sales tax now requires the delivery platform, not the restaurant, to collect and remit sales tax on orders placed through the app. For you, this simplifies compliance. Sales made through a platform generally should not be reported on your own sales tax return, because the platform has already handled that obligation. You still collect and remit sales tax on direct sales, in-store orders, and phone orders as usual.
The platform bears primary liability for collecting the correct tax amount. If the tax collected is wrong because the merchant provided incorrect product information, the platform can seek relief from that liability by demonstrating it made a reasonable effort to obtain accurate data. The default rule, though, is clear: the platform is on the hook for getting sales tax right on facilitated transactions.
Income Tax Reporting and the 1099-K
Delivery platforms must issue Form 1099-K to any merchant whose payments through the platform exceed $20,000 and 200 transactions in a calendar year. Both thresholds have to be met before the reporting obligation kicks in.3Internal Revenue Service. Publication 1099 (2026) If you don’t receive a 1099-K, the income is still taxable and still needs to be reported. The form is a reporting mechanism, not a definition of what counts as income.
Fee Transparency and Tip Rules
Consumer protection laws in a growing number of jurisdictions require delivery platforms to break down what customers are paying for. At a minimum, these laws require itemized receipts that separate the food price from the delivery fee, service fee, and tip. Some go further and require the platform to disclose whether app prices differ from in-store prices.
Several jurisdictions also require platforms to pass 100% of the designated tip to the delivery worker, with no portion retained by the platform or used to subsidize base pay. These rules address a practice that drew criticism in the late 2010s, when some platforms counted tips toward a guaranteed minimum payment rather than adding them on top. Where these laws apply, violations carry administrative penalties and can trigger lawsuits under consumer protection statutes.
In April 2026, the Federal Trade Commission published an Advance Notice of Proposed Rulemaking targeting unfair and deceptive fee practices in online food and grocery delivery.4Federal Register. Rule on Unfair or Deceptive Fees in Online Food Delivery Services The FTC is asking whether a rule should require platforms to display the total price, including all mandatory fees, more prominently than any other pricing information, and whether platforms should have to disclose how much of each fee goes to the delivery worker versus the platform.5FTC. FTC Seeks Public Comment on Unfair and Deceptive Fee Practices in Online Food and Grocery Delivery Services A final rule would likely take effect no earlier than 2027. For now, disclosure obligations remain a patchwork of state and local laws.
Liability and Indemnification Clauses
Platform contracts typically include indemnification clauses that shift certain liabilities to the merchant. Once you hand an order to the courier, the platform’s standard position is that you are responsible for food safety, order accuracy, and packaging integrity. If a customer gets sick from improperly prepared food, the platform will point to the contract provision making the restaurant responsible. If the courier mishandles the order during transit and the food arrives damaged or at an unsafe temperature, the question gets murkier and often turns on who the customer blames and what evidence exists.
Indemnification also runs the other way. Merchants may be required to cover the platform’s legal costs if a lawsuit arises from the merchant’s food. Carrying adequate commercial general liability and product liability insurance of your own matters here, because the platform’s coverage is not written to protect you.
Food safety responsibility doesn’t disappear once the courier takes the bag. State and local health codes still govern food handling, and most require hot foods to be held above 135°F and cold foods below 41°F. If a foodborne illness is traced to temperature abuse during delivery, the restaurant, courier, and platform can all face liability depending on local law and the facts. Many platform contracts address this by requiring merchants to package food in sealed, tamper-evident containers before handoff.6U.S. Food and Drug Administration. FSMA Final Rule on Sanitary Transportation of Human and Animal Food
Alcohol Delivery Carries Its Own Rules
Delivering alcohol through a third-party platform adds a layer of licensing and compliance that doesn’t apply to food orders. Every state requires the purchaser to be at least 21, and most require the courier to verify the recipient’s age using a valid government-issued photo ID at the point of delivery. If the recipient appears intoxicated, the courier is generally required to refuse the delivery. Violations can result in fines, license revocation, and criminal liability for the courier, the merchant, or both.
Licensing requirements vary. Some jurisdictions require the platform itself to hold a specific third-party alcohol delivery license. Others place the obligation on the merchant’s existing liquor license with a delivery endorsement. Platforms delivering alcohol may also need liquor liability insurance, either as a standalone policy or as an endorsement on general liability coverage. Confirm with your insurer that your existing liquor liability policy extends to third-party delivery, because many standard policies were written before app-based delivery existed and may contain exclusions.
Record-keeping is a compliance area that catches businesses off guard. Jurisdictions that license alcohol delivery typically require the platform or merchant to keep records of each delivery, including date, delivery address, and recipient identity, and to retain those records for a set period, commonly three years.
Reading Your Contract Before You Sign
Before signing with any platform, work through the agreement with these numbers and clauses in hand: the commission tier and what it buys, the termination and payout-hold terms, the data ownership provision, the arbitration and class waiver language, the indemnification clauses in both directions, and any packaging or food safety requirements the platform imposes on you. Confirm which local commission cap, fee disclosure, and tip rules apply where you operate, and confirm with your own insurance broker that your general liability, product liability, and (where relevant) liquor liability coverage responds to third-party delivery orders. The platform’s standard contract is written for the platform. Knowing which clauses matter is how you keep it from being written only for the platform.