Delivering Dinner-And Keeping The Profit

Recently, Inc.’s legendary Norm Brodsky visited Michelle Gauthier and Justin Schwartz, founders of the thriving New York City–based fast-casual chain Mulberry & Vine. Mulberry & Vine has carved out a niche in a hotly competitive market with its healthy fare—but like many city-based restaurants, it faces challenges with rising costs and the advent of delivery services like Grubhub. Luckily, Norm was there to lend an ear—and weigh in.

NORM: So, in the restaurant business, it boils down to percentages. What is your rent as a percentage of your total costs?

Michelle: It’s less than 10 percent at all of our locations.

Perfect. Ten percent is the magic number. What about food costs?

M: About 27 percent. With packaging, though, we’re probably at 30, 31.

OK. That’s an acceptable rate.

M: Other costs are the problem. Delivery, which is 30 percent of our business, has really taken a chunk of the profits.

We have that problem at our restaurants too. Everybody does. It’s expensive. I see you use multiple delivery services.

M: We outsource it. But we are very close to doing it ourselves, because it’s super expensive. With those services, we’re giving away close to 35 percent of revenue on deliveries.