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Fast-food restaurants do away with dining rooms

Quick-service and fast-casual restaurant chains continue to offer up prototypes that don’t feature indoor seating. Here’s why this is such a huge trend.
Photo by Jonathan Maze

This isn’t a good week for customers who enjoy eating inside fast-food restaurants.

Earlier this week, Taco Bell debuted its newest prototype, which it calls “Defy.” It is a two-story purple palace devoted almost entirely to the automobile. There is a kitchen on the second floor that delivers food to waiting cars below through a unique lift system.

Inside, however, it does not have any seating. And that’s an increasingly common scenario in the limited-service sector. Numerous concepts, including traditional quick-service chains and fast-casual brands, are testing or planning prototypes that do not have any seats and devote most of their energy to the drive-thru.

The kinds of companies taking these steps include those traditionally known for their large, dine-in-centric indoor palaces, like Portillo’s, which is getting strong early results from its drive-thru-only location in Joliet, Ill. The location is half the size of its traditional restaurant. “We think we might have found something very, very special that would help us with fortressing in Chicago and elsewhere,” CEO Michael Osanloo said in February on an episode of the Restaurant Business podcast A Deeper Dive.

It’s not just Taco Bell and Portillo’s. Consider:

Caribou Cabin

The Minneapolis-based Caribou Coffee is devoting its expansion to its drive-thru-focused "Cabin" prototype./Photo courtesy of Caribou Coffee.

In fact, the coffee business in which Tim Hortons competes has been roiled in recent years with the spread of drive-thru coffee huts. Dutch Bros, which went public last year, rocketed to become the third-largest coffee chain with a model that features no seating. The fifth largest is Scooters Coffee, which is also a drive-thru-only concept. The fourth largest, Minneapolis-based Caribou, is focusing all its attention on growing drive-thru-only locations.

Market leader Starbucks, which has rapidly shifted to the drive-thru game, has opened numerous locations targeted at takeout-only customers.

Beyond these chains, companies like McDonald’s and Del Taco were planning drive-thru-only versions of their restaurants.

Various reasons are pushing restaurants toward these kinds of prototypes. One of them is inevitability.

Drive-thru demand had been steadily increasing at fast-food restaurants long before the pandemic. Many of them already generated more than two-thirds of their business through that window amid the growing demand convenience. It was only a matter of time, in other words, that more restaurants would develop versions that ditched seats altogether.

The pandemic only sped that up. Suddenly, that 70% became 90% or more. What’s more, customers rapidly gravitated toward other takeout channels like mobile order. All this put pressure on brands to devote more of their space toward these takeout-focused options.

The problem? Costs for real estate and building new locations aren’t exactly coming down. That drove a need to develop more efficient models that would use space more effectively toward the order channels that generate the most business.

Schlotzsky's Design 1000

Schlotzsky's "Design 1,000" prototype does not feature indoor seating./Photo courtesy of Schlotzsky's.

Schlotzsky’s traditional locations were 3,300 square feet. So, the company introduced new, smaller prototypes, including one that is just 1,000 square feet with no seats. “As we saw consumer behavior changing toward speed, convenience and variety, new order channels became more and more prominent,” Shelley Harris, chief brand officer for the sandwich chain Schlotzsky’s, said in an interview late last month.

“We knew we needed to be a bit more cutting edge, with a smaller footprint and maximum off-premise needs. Then 2020 hit and all that got dramatically accelerated.”

Labor is another element that is driving much of this. A number of fast-food restaurants with dining rooms have yet to reopen their indoor seating largely because they do not have enough people to staff them—and sales have remained fine through the drive-thru, anyway.

The simple fact is, restaurants without dining rooms don’t need to have people cleaning tables. “With the limited amount of labor, they’ll be able to deploy labor to the kitchen,” Harris said. “That’s helpful with speed of service and gives relief to the kitchen staff.”

 

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