Why Owners Should Be Paid First: A Better Profit-Share Model for Restaurants

Operator-first economics create healthier, long-term partnerships

By David Chadwick, President and Co-Founder - Epicore Virtual Brands

For decades, restaurants have operated within a financial model that places owners last in line for payment. Labour, suppliers, rent, utilities, POS systems, merchant fees, every cost is paid before the operator sees a dollar of net income. In fact, according to Restaurants Canada, the average pre-tax profit margin for independent restaurants is just 2–5%, meaning operators often work an entire month only to earn less than the cost of a single payroll cycle. This “leftover economics” model has been accepted as a norm, yet it is also responsible for one of the highest business-failure rates of any service industry in North America.

As virtual brands and digital-first restaurant models accelerate, a shift in thinking is not just possible, it is long overdue. At Epicore Virtual Brands, we design our programs around a simple yet industry-defining belief: owners should be paid first. A kitchen should not subsidize a virtual brand’s operational burden. The revenue generated inside their four walls should immediately and consistently contribute to their bottom line. When operators are prioritized, trust is strengthened, turnover decreases, and long-term partnership becomes viable.

Why the Old Model Is Breaking Down

Traditional franchise and virtual brand models often place the brand’s economics ahead of the operator’s reality. Monthly royalties, marketing fees, technology add-ons, proprietary packaging requirements, and mandatory equipment upgrades may create strong income for the brand holder, but often at the expense of an already thin restaurant margin.

The industry data underscores this imbalance:

• 56% of restaurants report that third-party delivery commissions eat all their margin on off-premise orders.

• 71% of operators say rising labour costs are their biggest barrier to profitability.

• Over half of independent restaurants fail within five years, with cash-flow gaps cited as the leading cause.

In this environment, any model that extracts value before operators secure meaningful profit is simply unsustainable.

A Better Model: Profit First, Share Second

Epicore’s business model reverses the traditional value extraction sequence. Instead of taking fees upfront, we ensure each order is profitable for the operator before revenue sharing occurs. This means a kitchen partner:

• Pays no upfront investment

• Uses existing staff and equipment

• Incurs no mandatory add-ons

• Generates incremental revenue that clears their cost of goods and labour before sharing

This operator-first structure ensures every fulfilled order contributes to financial stability, not additional strain.

Case Example: Small-Footprint Kitchen, Big Gains

A recent Epicore partner in Ontario—a 900 sq. ft. quick-service restaurant with limited dine-in traffic, implemented three Epicore virtual brands during slow evening hours. Before onboarding, their monthly net profit averaged 3.8%, typical for the segment.

Within 90 days:

• Incremental order volume increased by 22–27 orders per day during the slowest hours

• COGS-neutral menu engineering maintained 70% contribution margin before revenue share

• Labour remained unchanged

• Net monthly profit rose from 3.8% to 11.4%

The operator described the shift as “the first time in ten years I felt like the business was paying me back.”

Case Example: Multibrand Pub Maximizing Off-Peak Capacity

A Vancouver neighbourhood pub with strong evening traffic but weak delivery performance adopted two Epicore concepts to fill mid-afternoon downtime (2 pm–5 pm).

Results after 60 days:

• +$9,800 new monthly top-line revenue

• $4,300 net operator profit after food and labour

• Zero upfront investment and no operational disruption

• Kitchen staff reported “no additional strain,” thanks to aligned prep and equipment

More importantly, the operator noted: “We finally found a program that doesn’t take more than it gives.”

Why Paying Operators First Builds a Stronger Ecosystem

Operator-first economics do not just benefit the restaurant, they strengthen the entire brand ecosystem.

When restaurants are profitable:

• Execution quality increases

• Order accuracy and speed improve

• Menu consistency becomes sustainable

• Staff engagement rises

• The partnership lasts longer

Virtual brand providers, like Epicore, benefit from stable, predictable fulfillment partners, while kitchens enjoy recurring, incremental profit.

This stands in sharp contrast to legacy virtual brand models, many of which grew rapidly but collapsed just as fast due to misaligned financial structures that favored the brand at the kitchen’s expense.

The Future of Virtual Brands Will Be Operator-Led

The restaurant industry is facing unprecedented cost pressure, margin erosion, and shifting consumer expectations. Kitchens cannot rely solely on dine-in revenue or single-concept menus to survive. They need modern, data-driven revenue channels that support, not strain them.

Paying operators first is more than a financial strategy. It is an acknowledgment of who does the real, physical, day-to-day work that makes a virtual brand successful: the operators standing on the line.

When they win early, consistently, and transparently, everyone wins – including the food service industry as a whole.

Epicore Virtual Brands is committed to leading the operator-first movement, proving that the next generation of virtual brands must be built not on extraction, but on shared success.

About Epicore Virtual Brands

Epicore Virtual Brands is a Canadian-based virtual restaurant licensing company that partners with independent restaurants, pubs, cafés, and commercial kitchens to generate new, incremental revenue through high-performance digital delivery brands. Built on an operator-first economic model, Epicore provides turnkey virtual brands, technology integration, training programs, menu engineering, and ongoing brand management, with no upfront cost to partners. Epicore’s mission is to help restaurant operators build more resilient, profitable businesses by maximizing unused kitchen capacity and aligning incentives through transparent, balanced revenue-share partnerships.

About the Author

David Chadwick, is the Founder and President of Epicore Virtual Brands and a veteran of the foodservice and hospitality industry with over four decades of operational, franchising, and brand-development experience. Having led teams across multiple high-growth restaurant groups, he specializes in building scalable systems, menu programs, and technology-driven revenue models. His work focuses on empowering independent operators through practical innovation, sustainable economics, and modern digital-first strategies that strengthen long-term restaurant viability.