Editor's note: This is the fifth story in a six-part Restaurant Business series on climate change and the restaurant industry.
If you were tasked with constructing a building that would have a low impact on the environment, you would probably not want to start with a restaurant.
Restaurants burn through more energy per square foot than any other type of commercial real estate, according to data from Energy Star. The average dining establishment uses 5 to 7 times more energy per square foot than other commercial buildings. At high-volume fast-food places, that multiple jumps to 10.
That’s because restaurants have a lot of energy needs relative to their size. Refrigerators and freezers are electricity hogs. Restaurants have plentiful indoor and outdoor lighting, as well as workhorse HVAC systems keeping hot kitchens cool. It doesn’t help that many operations, especially fast-food places, have long hours, with some open around the clock.
To put this into further perspective: A fast-food restaurant like McDonald’s or Burger King will use about $20 of energy per square foot, said Al Subbloie, founder and CEO of Budderfly, a company that works with restaurants to lower their energy consumption. A well-run office building will use $2.
“Per square foot, how many things plug into or are connected to a circuit that are using energy [in a restaurant]?” Subbloie said. “The density of energy use is ridiculous.”
All of that energy use has a real impact on the planet. Electricity generation is the second largest producer of carbon dioxide pollution, a key contributor to climate change.
Not only that, but restaurants’ energy consumption is also a drag on their bottom lines. Since 2020, the average price per kilowatt hour has increased nearly 30%, according to data from the U.S. Bureau of Labor Statistics.
That said, there are many ways restaurants can reduce their energy use, and virtually all large restaurant chains are making broad commitments to do that. But it’s not something that always comes easily for rank-and-file operators.
“I’ve always had a desire to make our stores more sustainability focused, but honestly, I didn’t really know how,” said Spencer Hart, the operator of five Sonic Drive-Ins and two Jersey Mike’s on Long Island. “We know how to run restaurants, but we didn’t really know how to do that.”
A Sonic Drive-In canopy outfitted with solar panels. | Photo courtesy of Spencer Hart
For instance, Hart had long viewed Sonic’s unique drive-in canopies as a perfect place to put solar panels. When he opened his fifth location in 2021, he was hell-bent on making it happen. The project ended up being a lot harder and more expensive than he had planned.
Then about two years ago, Hart heard about Budderfly in a newsletter sent out by Sonic’s parent company, Inspire Brands. Budderfly’s pitch was appealing: It promised to make restaurants more eco-friendly by overhauling their energy infrastructure—at no cost to the operator. In fact, the restaurant would actually save money by signing up.
To Hart, it seemed almost too good to be true. But, “it’s really worked out to be everything that they said,” he said.
Founded in 2017 by Subbloie, Budderfly calls itself an energy-as-a-service provider. Subbloie saw restaurants’ outdated energy infrastructure as a burden that would be difficult for operators to fix on their own.
“They’re in the business of delivering great food to customers,” Subbloie said. “We created a business model that made it really easy for restaurants to solve the whole [energy] thing.”
With Budderfly, restaurants agree to outsource their energy management to the company for 10 years. Budderfly takes over the restaurant’s utility bill, and the operator begins paying Budderfly rather than its energy providers. Budderfly then works to lower that bill by installing things like energy-efficient HVAC systems and LED lights. It also puts in high-tech thermostats and other devices that can help it pinpoint ways to save more, all on its own dime.
For the first three years of the contract, the restaurant is guaranteed energy cost savings of up to 10%, with Budderfly keeping the rest. This allows Budderfly to recoup its costs and reinvest. After the first three years, savings over 25% are split evenly between Budderfly and the restaurant.
“Things are changing, and I feel like we all have a responsibility to do what we can.” —Spencer Hart, Sonic franchisee
Because Budderfly’s model hinges on lowering energy costs, it’s incentivized to invest in things that will do that. At Hart’s Sonic stores, for instance, the company footed the bill for solar panels on the other four locations.
But the most significant change Budderfly made for Hart was replacing the HVAC system at one of his Sonics, an update that would have cost the franchisee tens of thousands of dollars.
Budderfly buys HVACs in bulk, so it can get them for 40% less than list price, Subbloie said. A new, energy-efficient HVAC alone can cut a restaurant’s energy use in half, he said.
The arrangement with Budderfly is currently saving Hart 3% to 5% per month on utilities, which translates to thousands of dollars back into his pocket, he said. That’s not to mention the money he did not have to spend on solar panels and a new HVAC.
“If I did all of this by myself, I would realize some of the savings that Budderfly is keeping, but it would cost me a lot of capital up front,” he said. And, because Hart is not an energy expert, “I wouldn’t know what I wouldn’t know. [Budderfly] is gonna keep doing things that I wouldn’t know to do.”
In 2024, Budderfly has reduced customers' energy consumption by 43% more than last year, avoiding 219,100 metric tons of carbon emissions—equivalent to 560 million miles driven by an average gasoline-powered vehicle. It currently services about 7,000 locations—mostly restaurants—and plans to add 2,000 to 3,000 a year starting next year.
The CEO said most operators Budderfly works with are motivated by saving money rather than saving the planet. Hart may be one of the few who cares about both. He has three kids and worries about what a rapidly changing climate will mean for their futures.
“We don’t get any snow anymore in the Northeast,” he lamented. “Things are changing, and I feel like we all have a responsibility to do what we can.”
The fact that doing so also saves him money makes it a win-win. “It’s kind of a no brainer,” he said.
Chipotle's "responsible restaurant" design relies in part on solar power. | Photo courtesy oc Chipotle Mexican Grill
Most large restaurant chains are taking steps toward easing their impact on the environment.
A look at the 10 largest chains in the U.S. found that all of them have fairly robust plans to reduce emissions and energy use in their supply chains and packaging as well as in their stores themselves.
The plans include buying energy-efficient equipment and HVAC systems, investing in solar power, installing smart thermostats and switching to LED lights.
They often come with a goal of achieving net-zero emissions at some point in the future. Burger King and Popeyes owner Restaurant Brands International, for instance, has pledged to cut emissions in half by 2023 and zero them out completely by 2050. McDonald's and Chipotle have set similar benchmarks, though progress has been spotty.
Some brands have taken the extra measure of designing new, energy-efficient restaurant prototypes. Last year, Chipotle unveiled a restaurant powered entirely by renewable energy, including solar panels and wind turbines. All the equipment is electric, and there is a smaller cookline with better exhaust. The efforts even extend to the decor, with art made from recycled rice husks and chairs fashioned from cactus leather.
The fast casual opened three of these “responsible restaurants” last year, and planned to have more than 100 of its new openings this year use all-electric equipment and at least some other elements of the new design.
But to illustrate just how radically restaurants may have to change to achieve net-zero emissions, let’s look to McDonald’s, the largest restaurant chain in the world both by sales and unit count.
The burger giant in 2021 opened a striking global flagship at Walt Disney World that aims to offset its own energy use with on-site renewable energy. Its goal is to be the first net-zero energy quick-service restaurant location in the world.
McDonald's Orlando flagship. | Photo courtesy of McDonald's
The 8,000-square-foot building has a large roof covered in solar panels as well as an innovative approach to climate control: The dining room facade is made up of jalousie windows that automatically open and close throughout the day. The windows are controlled by sensors that track humidity and temperature inside the building. They help reduce the restaurant’s reliance on air conditioning.
The window system was a response to data that showed that 65% of the year was considered comfortable in the shade in that part of Florida.
The restaurant’s energy use is further offset by off-the-grid parking lot lights and outdoor stationary bicycles that convert human power into electricity. That energy is used to illuminate the restaurant’s golden arches.
The location remains the only McDonald’s of its kind in the world and is meant to be a “learning hub” for the rest of the system, the chain said in an email to Restaurant Business.
Other locations have incorporated similar sustainability elements. The chain’s Bogota, Colombia, flagship has solar water heaters, rainwater recovery units, and heat-insulating ceilings, for instance, and a location in Market Drayton, U.K., uses British sheep’s wool as insulation, one of a number of environmental efforts at that restaurant.
“McDonald’s is constantly evaluating ways to update existing restaurants for lower environmental impact while embedding sustainability considerations more deeply into the new-build processes,” the company said.
“When we design things, we design for the maximum occupancy, and we make an assumption. ... But you may not have 200 people in there.” —Erica Cochran, Carnegie Mellon University
For smaller operators, sheep’s wool, stationary bikes and even new HVACs may be out of the question. But there are more basic things they can do to limit their energy use and their costs, said Erica Cochran, associate professor of architecture at Carnegie Mellon University.
One piece of low-hanging fruit? Windows. Restaurants tend to have large windows, and they can have a big impact on the building’s inside temperature. Cochran recommended hiring a sustainability consultant to survey the building with a thermographic camera to identify spots where heat is getting in or out, such as windows that need caulking or doors that aren’t fully sealed.
Windows themselves should have glass that is double- or triple-glazed, she said, and they should be outfitted with blinds or shades that can be drawn against the sun. Restaurants willing to spend more could invest in thermochromic glass that automatically tints depending on the light level.
Another simple but impactful fix: Upgrading to LED lighting. Subbloie of Budderfly estimated that about 40% of restaurants have yet to make that change, even though it can cut lighting costs in half.
For operators worried about losing some ambiance with LED, Cochran said their quality has come a long way. “The bulbs can still have great color rendering, so that your reds and your blues or your greens still pop and look fantastic,” she said.
Finally, the industry trend toward more delivery and takeout could give restaurants an opportunity to lower their energy consumption.
With fewer customers dining on-site, full-service operators might consider dividing their buildings into temperature zones that can be controlled individually. Rather than cooling the entire dining area, a zoned system can hit only the sections where people are seated.
“When we design things, we design for the maximum occupancy, and we make an assumption: ‘Hey, if this restaurant can hold 200 people, let’s design a mechanical system for 200 people,’” Cochran said. “But you may not have 200 people in there.”
In response to the off-premise trend, many chains are opting to build smaller boxes, with some quick-service chains ditching dining rooms altogether at certain locations. The idea is to optimize the operation for to-go, but there’s an inherent energy benefit there as well.
“Smaller footprints are definitely better for sustainability,” Cochran said. “Don’t build things that you don’t need.”
CORRECTION: An earlier version of this story included inaccurate data shared by Budderfly about the company's climate impact. It has been updated.
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