Drive-thru restaurants have always been a convenient and popular option for fast food. However, COVID-19 has had a demonstrable impact on the success of this model. According to Franchise Times, many drive-thru chains saw double-digit growth in 2020, including Jack in the Box, A&W, and Popeye’s. Restaurants with both drive-thru and dine-in options have managed to do well during COVID because they could rely on drive-thru business to make up for the loss in dine-in revenue. Meanwhile, many traditional sit-down restaurants suffered significant losses in 2020 and are still having difficulties. COVID has helped make drive-thrus more successful, but it has also highlighted the advantages of this business model. As a result, these restaurants may continue to grow even once the pandemic is over, driving interest in buying such franchises. However, as with any franchise, there are many issues to consider before purchasing a drive-thru franchise.
The Impact of COVID
The need to offer contactless food service caused many restaurants to offer or expand drive-thru service during COVID. However, the sudden increase in business highlighted some of the potential problems. Some chains were well-equipped to handle the surge, while others had to figure out how to address its challenges.
As dine-in customers disappeared, drive-thru restaurants could concentrate on providing faster service, which encouraged customers to come back again. However, more customers ordering food meant that there were longer wait times overall in 2020 according to Food & Wine magazine. To minimize wait times, restaurants are turning to technology solutions including mobile ordering and digital menu boards that help customers make selections faster and also have the added benefit of encouraging customers to purchase more food. The downside is that purchasing or upgrading technology can be costly. For those contemplating buying a franchise, it is important to review the costs associated with the franchise and consider how that may affect your return on investment.
In addition, a common customer issue with drive-thrus is the accuracy of orders. Employee turnover and inadequate training can be a significant problem for quick service restaurants resulting in mistakes and unhappy customers. As a franchisee, you will be given training materials and procedures, but it is up to you to hire, train and supervise employees to ensure the business meets appropriate standards.
Future of Drive-Thrus
Even once COVID fears have dissipated, drive-thrus will likely remain popular especially as there are many more food options than existed previously. Convenience, lower cost than dining in, and better-quality food and service may encourage customers to continue to frequent quick-service restaurants beyond the pandemic.
The economics of drive-thrus also can make it a good option for many franchisees. Among the benefits of the drive-thru model is that more drive-thru customers than dine-in ones can be served over the course of a day generating more revenue. Drive-thrus also need smaller buildings if they aren’t seating customers, although they may need more land for drive-thru lanes. That can mean lower rent, utilities, and other building-related costs. Staffing may also be reduced or redeployed in some cases to streamline operations and make the business more profitable.
As with any franchise, it is important to review the details carefully. Restaurants are among the most popular franchises in the country, but there may be significant start-up costs, and location and local competition are crucial considerations. If you are thinking about buying a franchise, consult an experienced franchise attorney to guide you through the process. Contact us today.