Set a free delivery minimum at the basket size where the extra contribution from the offer can cover the delivery cost you take on, including the cost of orders that would have met the minimum anyway. The right number depends on your delivery expense, food and packaging costs, typical baskets, and how many guests actually add items because of the offer.
Start with a threshold that is close enough for guests to reach but high enough to produce useful contribution. Then compare it with your current offer. A larger order is not automatically a profitable order, and free delivery on a $40 basket is not the same as a permanent change to the delivery fee on every order.
Calculate the subsidy per eligible order
For this decision, the subsidy is the delivery-related amount your restaurant pays because an eligible guest no longer pays the delivery fee. Begin with your actual cost to fulfill an eligible order, then subtract any delivery amount the guest still pays. If the offer removes the whole guest delivery fee, the restaurant may need to cover the whole delivery charge.
Check what happens on the order you expect to receive, not just the advertised base rate. A delivery provider or dispatch service can explain its quoted charges, distance bands, minimums, and other potential charges. Your ordering provider can explain how guest fees and restaurant charges appear in reports. Your own records should show the delivery areas, order times, and basket sizes that matter.
For example, if delivery costs the restaurant $7 and the guest normally pays a $5 delivery fee, waiving that fee adds $5 to the restaurant's cost relative to the existing arrangement. The restaurant was already absorbing $2. If the offer also causes a new $1 dispatch surcharge, the added cost is $6. These are hypothetical amounts, not a delivery quote.
Keep delivery cost separate from payment processing and the cost of food. If a bigger basket raises the processing charge, that increase belongs in the calculation too. Ask whether the offer changes any other guest charges, and check how cancellations, refunds, failed deliveries, and long-distance orders are billed. A simple average can hide an expensive outer delivery zone.
Also define the qualifying amount. Does the minimum apply to food and drinks before delivery fees and other charges? What happens after a discount or an item is removed? Write the rule in the same terms guests will see at checkout, and confirm that your ordering setup can apply it as intended.
Estimate the contribution from a bigger basket
The extra sale is not all available to fund delivery. Subtract the variable costs associated with the added items, such as ingredients, packaging, and any additional payment processing. Include incremental labor if the larger order requires it. What remains is the added contribution available to cover the delivery subsidy and other costs.
Use item-level costs where practical. A guest adding a side with modest ingredient and packaging costs can contribute more than a guest adding a discounted item with an expensive portion. If you use an average contribution rate, check it against the items guests are most likely to add near the threshold.
Suppose a guest would otherwise spend $30 and adds $10 of items to reach a $40 minimum. If the added items contribute 70% after their incremental food, packaging, labor, and processing costs, the order adds $7 of contribution. If waiving delivery costs the restaurant $6, that changed order contributes $1 toward the cost of the offer on other orders.
That $1 is not the profit on the whole order. It is the estimated change from the extra items and waived delivery charge, compared with the same guest ordering $30 under the existing fee. It also assumes the guest really added $10 because of the offer. A guest who was already planning to spend $40 creates no such increase.
Before choosing a minimum, look at your order distribution. A $40 threshold may be easy to reach if many guests currently spend $35, but less persuasive if most spend $20. Moving the minimum higher may produce more contribution from a guest who reaches it while discouraging others from ordering. A lower minimum may be attractive but subsidize too many baskets that already qualify.
Count orders that qualify anyway
Use a group of comparable orders, not just the handful that increased their baskets. The following hypothetical worksheet compares 120 orders under a free-delivery offer with 120 equivalent orders under the current guest-paid delivery fee. It assumes order count and delivery costs otherwise stay the same.
| Order group | Assumed orders | Added contribution | Added delivery subsidy |
|---|---|---|---|
| Already at or above $40 | 15 | $0 | $90 |
| Move from $30 to $40 | 90 | $630 | $540 |
| Stay below $40 | 15 | $0 | $0 |
| Total | 120 | $630 | $630 |
Each of the 90 changed orders adds $10 in sales and, at the assumed 70% contribution rate, $7 in contribution. The 105 eligible orders each cost an added $6 in waived delivery fees. The result is break-even: $630 in added contribution minus $630 in added subsidy equals $0.
The assumption is demanding. Of the 105 orders that started below $40, about 86% must add $10 and qualify. If only 60 make that move, added contribution falls to $420. The 75 eligible orders still create a $450 subsidy, leaving a $30 shortfall. That is why counting existing qualifying orders matters.
The worksheet includes the assumed variable costs behind the 70% contribution rate and the waived delivery fee. It excludes fixed costs that do not change between the two groups, such as an unchanged software subscription. It also excludes exception costs such as refunds and failed deliveries; estimate those separately if the offer changes them. It does not assume extra orders, lost orders, or a change in the delivery provider's charges.
At the stated assumptions, $40 is only a break-even threshold if the high basket-lift assumption holds. It is not a recommendation to launch at $40 without a comparison. A smaller response, more costly delivery area, or added exception costs would require a different minimum or a different offer.
Test the threshold against a control
Compare the offer with a control that keeps your normal delivery fee. If possible, use comparable groups over the same period so a busy weekend, promotion, or change in menu prices does not masquerade as the effect of free delivery. Decide in advance which delivery areas, hours, menu prices, and discounts belong in each group.
Track completed delivery orders, qualifying orders, average basket, delivery fees paid by guests, delivery expense, and estimated contribution after variable costs. Include refunds and other exceptions. Compare contribution for the whole group, not only the average qualifying basket: an offer can raise average order value while reducing order count or increasing subsidies.
A simple decision rule is: change in total contribution from orders, minus the change in delivery and other offer-related costs. Use comparable totals or a contribution-per-eligible-visitor measure if the groups have different traffic. Record any traffic difference and avoid treating it as proof that the offer caused the change.
A small or uneven comparison gives a directional answer, not certainty. If one group has unusually large catering orders or a bad-weather delivery surcharge, inspect those results before choosing a permanent rule. Repeat the comparison or use a longer period when the first result is too noisy to support a decision.
Before a live service pilot, run a simulated checkout with test data to check the threshold, the displayed fee, and the order total just below and at the minimum. The simulation should not create a real card payment, guest message, or courier dispatch. A live pilot is separate: tell staff the actual offer, monitor real orders and costs, and set an end date and a point at which you will stop or adjust it.
Check your ordering setup before launch
Ask the provider whether you can set a delivery-only minimum, define the qualifying subtotal, limit the offer by area or time, and report which orders received it. Confirm how discounts interact with the threshold and how staff can identify eligible orders. If you cannot separate offer orders from regular orders in reports, agree on another reliable way to track them before launch.
Make the guest-facing rule clear on your restaurant website and at checkout. State the minimum, where the offer applies, and any important limits. Check the language against the actual order total so a guest is not surprised by a fee after adding an item.
If you are comparing systems as well as offers, use the online ordering buying guide to identify reporting and checkout questions. The guide to comparing order contribution can help separate channel costs from this conditional promotion.
Take your current delivery charge, basket distribution, and estimated added-item contribution through the worksheet. Then ask Fleksa about its restaurant online ordering setup, including whether the threshold and reports you need are available in your US location.
Frequently asked questions
What is a good free delivery minimum for a restaurant?
There is no universal minimum. Start near a basket size guests can reasonably reach, then check whether the expected added contribution covers subsidies on both changed and already-qualifying orders.
Should the minimum include the delivery fee?
Define the rule clearly before launch. A food-and-drink subtotal is one possible basis; confirm how discounts and other charges affect it and make sure the checkout displays the same rule.
Does a higher average basket mean free delivery is working?
Not by itself. Compare total contribution and order count with a control, after delivery subsidies and other changed costs. Guests may spend more per order while the restaurant earns less overall.
