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Despite efforts to ban them, drive-thrus remain popular

As Minneapolis forbids construction of new drive-thrus, chains across the country are looking to build more of them, and for good reason, says RB’s The Bottom Line.
Photograph courtesy of Chipotle Mexican Grill

the bottom line

Earlier this month, the city of Minneapolis passed an ordinance forbidding the construction of new drive-thrus.

Such bans are rare, and Minneapolis is believed to be the biggest city to do it—though restrictions on such restaurants are far more common: Portland, Ore., recently started requiring businesses to serve pedestrians and bicyclists in their drive-thrus.

The move to ban them outright, however, belies a big, big trend: Drive-thrus are enormously popular, and, as a result, they are more popular among restaurant companies. More chains are working to add those windows to their restaurants, and more customers are ordering their meals through them.

A typical McDonald’s, for instance, generates about 70% of its business through its drive-thru. McDonald’s generated about $38 billion in U.S. sales last year, suggesting the drive-thru alone is a nearly $27 billion business.

A free-standing Dunkin’ restaurant without a drive-thru in the U.S. generates about $1 million in sales yearly. That number goes to $1.3 million when it adds that window, according to the chain’s most recent franchise disclosure document. Operators of other brands such as Panera Bread have told me over the years that adding a drive-thru window to an existing operation instantly generates more sales.

Indeed, the most notable evidence of the potential impact of a drive-thru is coming from fast-casual chains. As we’ve written before, chains such as Chipotle Mexican Grill, Blaze Pizza and others have been more willing to add drive-thru windows. (Chipotle’s experiment is dedicated to mobile orders.)

In those cases, consumer demands are pushing the chains to add drive-thrus. Chipotle emerged as something of an anti-fast-food chain, one that sought to change the sector and its relationship with the environment. A drive-thru seems out of character for that, but so much business is coming through mobile ordering that a window is a good way to serve those customers.

Blaze and other fast-casual chains were deliberately courting experience-oriented customers with their customizable pizzas. Adding drive-thrus takes away from the experience.

Trends are pushing these chains toward more drive-thrus because customers want to take their meals to go.

Diners have been ordering takeout more frequently from just about every restaurant with a lower price point than Ruth’s Chris. Delivery has taken off, convincing even skeptics to jump on board.

Few things are as convenient as a drive-thru, where customers don’t even have to leave their cars or think very hard about a visit before they show up.

Chains such as McDonald’s and Jack in the Box are focusing more attention on the drive-thru. As Culver’s co-founder Craig Culver said on a recent episode of Restaurant Business’ “A Deeper Dive” podcast, the chain in the 1980s replaced carhops at its original location with a drive-thru, and business spiked.

Coffee chains, in particular, are increasingly adding such windows, and Caribou Coffee recently unveiled a drive-thru- and takeout-only model.

We can’t necessarily speak to the issues surrounding a city should or should not ban drive-thrus.

We can predict, however, that Minneapolis’ existing drive-thru restaurants will suddenly become exceedingly valuable inside city limits.

This is where the fast-food business is headed: to the automobile.  

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