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“Our direct competitors are currently doing 65% of their business in drive-thrus. Along with online ordering and delivery, the drive-thru is essential right now.”~ Jeremy Biser, executive vice president of Roy Rogers (in August 2020)
The drive-thru. Consumers have been dining-on-the-go via this serving method since 1946 (or the early 1930s, if you ask some). In a year when franchise restaurant dining rooms were largely shuttered, or limited in capacity for most of it, we’ve all come to realize just how much we’ve taken the drive-thru for granted.
As stated in QSR Magazine, “many have theorized that drive-thru, curbside, and ghost-kitchen-powered delivery will become the beating heart of foodservice’s future.” With social distancing now a part of daily life, many Americans have a new outlook on the traditionally crowded dining room, and are responding by continuing to order food to eat off premises.
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A Life-Preserver for Franchises in an Uncertain Time
Mid-March is when the impact of COVID-19 on the United States could no longer be denied. It also marked the beginning of when a number of franchises leaned on their operational feature of a drive-thru to maintain financial success despite COVID-related restrictions.
A couple of examples: While sales took an all but unavoidable dip in late March and early April, sales comps by late June had rebounded—and were up about 17%—over the same period in 2019 for Scooter’s Coffee.
For fellow coffee franchise Ziggi's Coffee, drive-thru sales were up 80% between February and mid-July 2020 compared to the same time period in 2019. The franchise also signed over 20 new development agreements over the time period, and was able to open new locations during that time as well.
“Drive-thru service is a game-changer these days.”~ Camrin Kundsen, co-founder of Ziggi’s Coffee
Understandably, both coffee franchises are thrilled that their franchise models have proven successful in challenging times.
“It was our goal from early on, to continue to be the best part of your day, even during one of the most challenging times,” Camrin Kundsen of Ziggi’s Coffee says. “To us, that meant finding new ways to support our franchise owners so they could continue to serve their communities, support their staff, and provide for their families.”
Circumstances Accelerating Plans
Elsewhere in the food franchising world, as the nearly 50-year-old brand remodeled existing locations, Cousins Subs had been shifting towards more drive-thru operations. But the COVID-19 pandemic accelerated the push.
“The focus coming out of COVID is the impact we were seeing—or didn’t see—in the drive-thru. About one third of our system has a drive-thru,” said Joe Ferguson, VP of development for the food franchise. “Those stores didn’t get hit as bad. Coming out of this we are really putting a focus on the drive-thru and adding more convenience for our customers.”
Ferguson noted in an interview with Franchise Times that in the initial two weeks of shutdowns across the country, sales were down on average of 30% across the franchise system. However, drive-thru locations were only down about 10% for the same time period.
“Off premises always been a focus for us. I think COVID kind of expedited a lot of the things we were trying to do around curbside and online ordering and also contactless curbside without having to interact with an employee…it really expedited those functions and allowed us to roll those out quicker than we had planned.”
COVID also accelerated the drive-thru push for Schlotzsky’s.
Over a year ago, the sandwich franchise was already streamlining its operations. Actions to do so included using drive-thru timers and adjusting drive-thru menu boards to become more suggestive towards items that could be made quickly.
The focus on drive-thru efficiencies truly paid off when dining room shutdowns began. Schlotsky's was able to maintain. Executives even started seeing opportunity for growth.
"We started looking at the business and the trends and just realized that here's a great opportunity for just really leaning into drive-thru...Even today, we have some of [our dining rooms] still closed—the business really shifted to the drive-thru and our other channels quickly. So the brand is doing really, really well," COO Tory Bartlett told QSR in January 2021.
The shift to more drive-thru service has been so impactful that Schlotzsky’s expects 99 percent of its new restaurants will have a drive-thru.
Drive-Thru Franchise Opportunities
With analysts stating that the presence of a drive-thru can add as much as 30% in sales to a company’s bottom line, food franchise businesses of all types and sizes are evaluating their service options—and making adjustments accordingly.
Franchises that have made their plans public to further emphasize the drive-thru are numerous, and include many franchise giants.
Restaurant Brands International, the parent company of Burger King, Popeyes and Tim Hortons, says it will “modernize” drive-thrus at more than 10,000 outlets in North America. Reports say the updates for the company will begin with Popeyes at the end of 2020.
Plans for Chipotle and Taco Bell include a second lane dedicated to pick-up only for customers who order through digital avenues. In addition, it’s been reported that Dunkin’, Panera, and Which Wich are among those primarily focused on drive-thru franchise opportunities in many U.S. markets at present.