
Frameworks, core principles and top case studies for SaaS pricing, learnt and refined over 28+ years of SaaS-monetization experience.
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Join companies like Zoom, DocuSign, and Twilio using our systematic pricing approach to increase revenue by 12-40% year-over-year.
The restaurant industry operates on notoriously thin margins, making every financial decision critical to success. For restaurant owners looking to implement or upgrade their point-of-sale (POS) and management systems, understanding the various pricing structures can be the difference between making a sound investment and overextending their budget.
Per-location pricing has become an increasingly popular model among restaurant SaaS providers. But is it the right choice for your establishment? Let's explore the various pricing strategies for restaurant POS and management software, with a special focus on location-based pricing models.
Restaurant technology has come a long way from the days of simple cash registers and paper tickets. Modern restaurant SaaS solutions integrate everything from order management and inventory tracking to employee scheduling and customer relationship management.
As these systems have evolved, so too have their pricing models. Today's restaurant owners face several common pricing structures:
Each model has its advantages and potential drawbacks, making it essential for restaurant operators to understand which aligns best with their business model.
Per-location pricing is exactly what it sounds like: a pricing model where restaurants pay a set fee for each physical location using the food service software. This model has gained significant traction in recent years, particularly among multi-location restaurants and growing chains.
According to a 2022 report by Hospitality Technology, approximately 64% of restaurant SaaS providers now offer some form of location-based pricing, up from just 48% in 2019.
Predictable costs: Restaurant owners know exactly what they'll pay as they expand, making financial planning more straightforward.
Scalability: The model grows with your business, allowing you to start small and expand without renegotiating contracts.
Unlimited terminals: Many per-location models allow unlimited terminals or users within a location, eliminating the need to track individual device usage.
Simplified budgeting: Multi-location operations can easily allocate technology costs to individual locations for more accurate profit-and-loss statements.
While per-location pricing works well for many establishments, it's not the only option available in the restaurant SaaS ecosystem.
Many traditional POS systems charge based on the number of terminals or devices in use. This model may be advantageous for:
According to TouchBistro's industry analysis, per-terminal pricing typically ranges from $60-$150 per terminal monthly, with most providers requiring a minimum commitment of at least one terminal.
Some restaurant POS systems, particularly those focused on payment processing integration, charge based on transaction volume or take a percentage of each sale.
This model might be beneficial for:
Toast POS, a leading restaurant technology provider, reports that transaction-based pricing typically ranges between 1.5% and 2.8% of sales, though this varies based on card types and processing agreements.
With several options available, how do restaurant owners determine which pricing model makes the most sense? Consider these factors:
Business structure: Single-location restaurants have different needs than multi-unit operations.
Growth plans: If expansion is on the horizon, look for pricing models that scale efficiently with growth.
Transaction volume: High-volume operations might pay significantly more with transaction-based pricing.
Seasonal fluctuations: Restaurants with substantial seasonal variation might benefit from more flexible models.
Terminal requirements: Consider how many devices you'll need to operate efficiently.
According to a survey conducted by the National Restaurant Association, 73% of restaurant operators report that predictable technology costs are "very important" or "extremely important" in their decision-making process, which often favors location-based or flat-rate models.
A growing pizza chain with 12 locations across the Midwest switched from a per-terminal model to a per-location pricing structure in 2021. The chain reported:
The chain's Director of Operations noted: "With our previous per-terminal pricing, we were reluctant to add new ordering points even when they could improve customer flow. The per-location model removed that barrier completely."
A high-end restaurant group with three locations found that per-location pricing didn't work as well for their business model. Their operation required:
In this case, a hybrid model with base location pricing plus feature-based tiers proved more cost-effective.
When evaluating restaurant POS systems and their pricing structures, restaurant owners should:
Request transparent pricing information: Ensure all fees—including payment processing, hardware, installation, and support—are disclosed upfront.
Consider long-term contracts carefully: While they may offer lower rates, they can lack flexibility if your needs change.
Ask about scalability: How easily can you add locations, terminals, or features as your business grows?
Evaluate the total cost of ownership: Include training time, implementation costs, and potential revenue impacts during transition periods.
Negotiate customizations: Many vendors will create hybrid pricing models for restaurants with unique needs.
The restaurant technology landscape continues to evolve, with several trends emerging in pricing strategies:
According to Gartner's analysis of SaaS trends, 76% of software providers are exploring more flexible pricing models to better align with customer value perception, a trend likely to impact the restaurant technology space in coming years.
Choosing between per-location pricing and other models ultimately depends on your specific restaurant operation. When evaluating food service software options:
The right restaurant POS system paired with the right pricing model can be a powerful tool for optimizing operations, enhancing customer experience, and ultimately improving profitability in an industry where every percentage point matters.
By understanding the nuances of various pricing models—especially per-location strategies—restaurant owners can make informed decisions that support their business goals today while accommodating growth tomorrow.
Join companies like Zoom, DocuSign, and Twilio using our systematic pricing approach to increase revenue by 12-40% year-over-year.