Dive Brief:

• Jimmy John's has partnered with DoorDash and will use DoorDash Self-Delivery, a new product for restaurants to generate demand and reach new customers on DoorDash's marketplace, while using their own drivers, according to a press release. 
• The rollout follows a six-month pilot at 100 restaurants. The two companies worked to build direct integration with Jimmy John's POS provider Signature Systems to minimize changes to in-store operations and to sync Jimmy John's existing menu and store hours within DoorDash's platform. Pickup will also be available through DoorDash and Jimmy John's will be added to DashPass, a monthly subscription program that offers free delivery for orders over $12.
• DoorDash estimates that 120,000 restaurants offer in-house delivery and its new product will allow restaurants to maintain their own fleets while also listing their offerings online to reach additional customers.

Dive Insight:

Jimmy John's was among the first to rail against partnering with third-party delivery platforms, once vowing to never use delivery apps, so this partnership is a complete shift in the restaurant's strategy. But these comments occurred prior to its acquisition by Inspire Brands, which has existing relationships with DoorDash through its other restaurant companies. 

"As a brand, we are relentlessly focused on reaching our guests on their terms," Darin Dugan, Jimmy John's chief marketing officer, said in the press release. "In DoorDash we found a third-party partner that shares this commitment and offers us the ability to further reach our consumers where they increasingly are — digitally."

During the pandemic, nearly 30% of restaurants said in a Raydiant report that third-party apps now make up 21% to 30% of sales. But as more restaurants turn to delivery as a way to continue generating sales, the segment has increasingly come under criticism for commissions and fees associated with last-mile fulfillment. Many municipalities, including Chicago, New York and Los Angeles, instituted temporary caps on delivery commissions to try and reduce costs to restaurants amid the pandemic. 

Offering delivery directly is one way restaurants can dramatically reduce their costs while also maintaining control over the experience. Others have been creating online ordering capabilities to process orders directly from their websites, but then having delivery fulfilled by a third-party driver. Panera, which has long had a robust in-house delivery fleet, partnered with DoorDash, Grubhub and Uber Eats in 2019 to allow customers to place orders through the app while still fulfilling orders itself in most markets. 

For Jimmy John's, placement on DoorDash's marketplace will help generate new customers while DoorDash has created a new avenue to increase the amount of restaurants on its site, which will only help drive more customers to DoorDash.