Sizing a DoorDash Partnership With Burger King That Demands a Bigger Cut per Order

You are a product manager at DoorDash. Burger King is interested in a partnership with DoorDash, but it wants a higher commission on every transaction as part of the deal. How would you evaluate this opportunity? Lay out how you would size the economics with clearly labeled assumptions, what beyond the numbers should weigh on the decision, and what you would recommend. ```hint Ask what is really incremental A large chain brings many orders, but some of them would have happened on DoorDash anyway at another restaurant. Separate new demand from shifted demand, and compare DoorDash's contribution per order with and without the deal. ``` ### Clarifying Questions - What does "higher commission" mean in practice: a lower rate charged to Burger King on each order, a payment to Burger King per order, or a revenue share, and how far is it from standard terms? - Is the partnership exclusive, and which countries and locations does it cover? - Does Burger King offer anything in return, such as marketing support, volume commitments or menu prices that match its restaurants? - How long would the contract run, and does the rate apply to delivery and pickup orders alike? ### What a Strong Answer Covers - A clear goal for DoorDash and an exact view of how the requested terms change revenue and contribution per order - A volume estimate with labeled assumptions and a sanity check, split into orders that are new to DoorDash and orders shifted from other restaurants - Value beyond the deal's own orders: new customers, selection against rival delivery apps, advertising and subscription value - Second-order risks: other chains asking for the same terms, franchisee participation, and fairness to smaller restaurants - A recommendation with a counter-proposal, a walk-away point and the metrics to monitor after launch ### Follow-up Questions - Soon after signing, other national chains ask for the same rate. How do you respond? - A rival delivery app offers Burger King an even better rate in exchange for exclusivity. Do you match it? - If you could not move on commission at all, what else could you offer Burger King?