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Delivery Radius

A delivery radius is a distance-based boundary around a restaurant, store or fulfilment point used to decide which addresses can receive delivery. Some systems instead use mapped zones or travel-time rules, and third-party providers may impose their own limits.

The stated radius is an eligibility rule, not a promise that every address within it can be reached at the same cost or speed.

From the Money Master HQ dictionary, founded by Shihan Sheriff (FCMA, VP of Finance at Nomod, CFO at Esanjo Ventures). How these definitions are written.

What it means

A shop may accept orders for nearby addresses but reject a distant one, and a radius is a simple way to draw that boundary by measuring distance from a chosen origin, usually the preparing site or dispatch location. Define the measurement, because straight-line distance is not road distance and neither guarantees a particular journey time.

Bridges, one-way streets, traffic and geography can make a nearby address slow to reach. Toast's third-party delivery guidance describes a provider-set straight-line radius, which can differ from what a customer sees in marketplace apps, and for self-delivery Toast documents drawing a custom delivery area on a map.

The operating model changes who controls the boundary. Third-party agreements can constrain changes, since a merchant may be able to reduce a provider-set radius but not expand it, so verify the live provider policy before making plans around a wider area.

Start with the service promise, because a hot meal may have a tighter useful area than a boxed household product, and the time needed to prepare and hand over the order also affects the delivered experience. Calculate the economics by location, since fuel, driver pay, packaging, provider fees and failed-delivery risk can rise farther from the site.

A large radius can bring more orders while reducing contribution per order. Volume matters as much as distance, because one driver can serve several nearby orders on a route while an isolated far order may need a dedicated trip.

If inner deliveries cost $8 per order and outer deliveries cost $14 on a comparable basis, the outer band costs 75% more, though basket contribution decides whether those orders are profitable. Compare actual orders and routing patterns, not only kilometres.

Customers need a clear eligibility check, and asking for the delivery address before the final order is built prevents the frustration of rejecting a full basket at checkout. A business may narrow its area when capacity is limited, but only if its ordering system and customer notices accurately reflect the temporary rule, and it should not promise delivery outside the available network.

Use zones where a circle performs badly, since a polygon can exclude an inaccessible route or include a quickly reachable corridor, though it still needs testing with real travel and service data. Check promised times by period, as rush-hour traffic or kitchen peaks can make the same address slower at lunch than in mid-afternoon, and a static radius and a dynamic promised time answer different questions.

Avoid using distance as a proxy for quality alone, since a distant customer may receive a good product on time while a nearby one receives it late because dispatch was disorganised. For an owner, the boundary is a promise and a cost control, so set it from real operating capacity and review the economics and customer experience by area.

In practice

Real-world examples.

1

Example

A restaurant accepts orders within a stated 6 km straight-line radius, then checks whether its kitchen and courier can meet the promised delivery time for each eligible address.

2

Example

A district across a river is only 3 km away in a straight line but requires a long road detour. The store uses a mapped zone to exclude or price the route accurately.

3

Example

A caterer quotes a large advance order outside its standard delivery area. It treats the job as a separate service rather than changing the ordinary radius for all customers.

Formula

Calculation

Cost per completed delivery in a distance band = Eligible delivery operating costs in that band / Completed deliveries in the same band Worked example. The inner band has $4,000 of delivery costs over 500 completed deliveries, so cost per delivery is $4,000 / 500 = $8. The outer band has $2,800 over 200 completed deliveries, so cost per delivery is $2,800 / 200 = $14. - Outer premium = ($14 - $8) / $8 x 100 = 75% higher. - If the average basket contributes $12 before delivery, the inner band earns $12 - $8 = $4 per order and the outer band earns $12 - $14 = -$2 per order. This informs, but does not define, the radius.

Case study

Seen in the real world.

This entirely fictional case follows Cedar Wraps, an invented lunch operator. Its delivery area was drawn as a 10 km circle, but an outer district required a long route around a water crossing. Customers there frequently received late meals. The owner inspected travel times, cost per order and complaints, then adjusted the zone and quoted delivery times. The restaurant and outcome are invented; no universal distance is implied.

Watch out

Common mistakes.

  • Treating a straight-line radius as a guaranteed driving distance or delivery time.
  • Expanding the area without checking provider limits, costs and product quality.
  • Keeping the checkout eligibility map stale after an operational boundary changes.

Questions

People also ask.

Is radius measured by road distance?

Not always. Some systems use straight-line distance, while others use mapped zones or travel rules.

Can the boundary change during a busy period?

It can if the operation and ordering system support it, but customer-facing eligibility and promises must stay accurate.

Does a larger radius mean more profit?

No. Extra demand must cover the cost and service impact of longer trips.

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Last updated · October 8, 2026
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