The Challenge 

The client has long relied on third-party platforms, particularly DoorDash, to drive incremental visibility and sales. Seasonable promotions consistently increased order volume and placed our client at the top of the delivery search funnel. However, despite strong engagement, franchisees voiced growing concerns about the profitability of these campaigns.  

Operators reported that steep discounts, combined with DoorDash commissions, were compressing profitability to the point where “promos are hurting gross margins,” with stores often retaining significantly less than the menu price after deductions. Many threshold-based discount offers (e.g. $5-$7 on $20-$25 purchase) were used on top-selling, high COGS items, further exacerbating margin erosion. Franchisees were especially skeptical of the BOGO campaign, which did not target high COGS speciality items, but instead focused on their second- and third- best-selling low-cost items.  Many felt that giving away a burger in this context made the promotion unnecessarily expensive and less sustainable. 

Without clear evidence to compare promotional effectiveness, the system was unable to distinguish which programs truly delivered profit versus those that simply drove volume. Our client required a data-backed strategy to reshape its promotional approach and address franchisee concerns around promotional profitability.  

Our Approach 

Gravitas conducted a comprehensive, year-long analysis of the burger chain’s DoorDash performance to quantify the financial impact of every major promotional period. We began by collecting, sorting, and consolidating one full year of transaction-level data, including gross sales, net sales, discounted amounts, DoorDash commission fees, transaction volumes, and co-funding structures. This allowed us to build a weekly, per-store financial model that isolated contribution margin across promotional timelines. 

We evaluated performance during each major promotional event, assessing shifts in order volume, redemption behavior, and product mix. Leveraging the client’s operating cost structure, including average platform commission rates and COGS, we measured the true net impact of each promotion on profitability. This approach provided a systemwide, direct comparison of how each promotional strategy affected both sales and margins. 

Key Insights 

The analysis revealed three critical insights that challenged franchisee assumptions and reshaped our client’s promotional strategy. 

1. Discount Depth Increased Visibility but Diluted Profitability

First, any promotion, regardless of discount offered, functioned as a de facto listing fee. Promotional participation pushed our client to the top of the DoorDash search funnel, substantially increasing visibility and order volumes. Deep or shallow, the acts of running a promotion alone meaningfully improved placement and exposure.  

2. Flat-Rate Discounts Shifted Demand Toward High-COGS items

   
   

Second, steep flat-rate discounts encouraged customers to apply the offer to BYO burgers, which carry the highest COGS in the menu. During major sports promotions, customers consistently used $5-$7 discounts on these high-cost items, resulting in marginal or even negative margin uplift once commissions were deducted. These campaigns drove volume, but not profit.  

3. BOGO as a Driver of Incremental Value

Third, and most importantly, BOGO behaved fundamentally differently. Although operators believed BOGO was the costliest promotion, the data showed the opposite. The discount applied only to two-topping, or a pre-set burger offering, which carry lower COGS. More notably, many customers entered the platform through the BOGO banner but ultimately upgraded to a BYO burger at full price, never redeeming the promotion at all.  

Threshold-based promotions drove average weekly uplifts of 22% in gross sales and 6% in net sales, but achieving those results required deep discount penetration, with 50% of all transactions tied to a promotion.

In contrast, BOGO delivered a far stronger outcome, generating a 40.9% gross sales uplift and an 18.4% net sales uplift, with only 40% of transactions tied to the offer. Despite lower redemption, BOGO generated significantly stronger margins, with a 10% increase in gross sales margins compared to an average 3% increase across threshold-based promotions. This demonstrated that BOGO offers produced more incremental value with far less discount exposure. In other words, BOGO worked more efficiently, not more aggressively, delivering superior profitability compared to threshold-based promotions.   

The Outcomes 

With validated data in hand, our client gained a clear, actionable promotional strategy. 

1. BOGO Promotions Drive Profitable Growth When Strategically Deployed

   
   

First, the analysis established that BOGO-style promotions consistently outperformed other promotional strategies as the most effective lever for profitability growing third-party sales. BOGO consistently delivered the highest gross and net sales growth, the strongest profitability margin uplift, and the lowest discount leakage because less than half of customers actually redeemed the offer after entering through the promotional gateway. 

2. Shifting Focus from Visibility to Incremental Profit Contribution

Second, Gravitas provided a refined framework that evaluated promotions not just on visibility or order volume, but on profit contribution. By distinguishing which offers genuinely drove incremental profit, our client could confidently prioritize campaigns that enhanced incremental sales growth and benefitted both franchise operators and corporate royalties. 

3. Using Data-Driven Insights to Align Franchise and Corporate Strategy

Third, the findings addressed franchisee concerns with evidence, demonstrating that BOGO did not erode profitability, while flat, deep-discount offers on BYO burgers were the true drivers of margin suppression. This clarity helped align franchisee and corporate perspectives on third-party promotional strategy.  

4. Enabling Smarter Promotional Decisions Through an Accretive Growth Framework

   
   

Finally, our client adopted this framework to guide future promotional decisions, ensuring that promotional investments generate accretive, not cannibalizing, results. The company now evaluates every potential promotion through the lens of visibility, volume, and profitability, allowing our client to run fewer, smarter, and more financially impactful campaigns.