The surge to drive-thru locations is in full swing.

With the turmoil of the last 18 months or so, it seems apparent that the current most palatable locations for Quick Service Restaurants (QSR) to invest in, are drive thru locations.

It’s not hard to see why, with the ability as an often free standing business, to be able to continue trading in a contactless manner. 

All the while, unfortunately, being located within shopping centres of varying sizes, has often placed significant limitations on continuity of trade for many food operators.

Of course, drive thru locations were the ‘jewel in the crown’ for many QSRs and cafes for years prior. 

But now, the competition for spots is next level.

A recent report in the Australian Financial Review, How the pandemic is changing fast food, highlighted the fact that development sites are in very high demand, with multiple QSRs competing for ever-fewer prime available locations.

See the 10 biggest fast food brands in the Australian market HERE

How to choose the location

With all this heat and competition, key location principles still apply. A methodology must still be followed in order to minimise the risk of such significant investments required to build a free standing location.

“They are called FSDT’s in the business, Free Standing Drive Thru locations.” according to demographic data and location expert Peter Buckingham, Managing Director of Spectrum Analysis, who has worked to assist multiple franchise corporates over many years in selecting and mapping the right locations.

“When establishing a FSDT, the rule of thumb has generally always been, to sell in excess of 50% of sales through their drive thru. As you need to keep in mind, these are very high investments, so forecasting with some certainty is important.”

“The way it works is you start by looking at five (5) key drivers for any location. 

These are traffic, visibility, site suitability, demographics, and finally, competition.”

The five key drivers

Traffic

“How many vehicles pass per day, and specifically, across the full 24 hours, in both directions, on weekdays and weekends.”

There are numerous sources for traffic counts both government and commercial. You can even stand outside a location yourself with a counter if you are keen enough!

Visibility

“Having huge amounts of traffic is great, but if drivers don’t see you in a way that gives them enough time to turn in, then that advantage can be significantly diminished.

The visibility of the building itself, and signage both contribute to a highly visible location.”

Site suitability

“This relates to the physical attributes the site can allow. In my time with Caltex, and working with KFC a number of years ago, we’d see huge variation in performance from small, original drive thru stores with around 20 seat capacity, through to the more modern 100+ seat restaurants. 

Factors such as the number and arrangement of tables, counter length, outside seating, drive-thru windows, queuing space, access off-street, parking, and many more physical site attributes all have a significant impact.”

Demographics

“This is simply about making sure your product offer matches the area you are in. Think higher priced meals in a lower socio economic area and vice versa.

Brands at this level of investment are likely to have a very good handle by this point on what their target audience looks like. Anyone can also investigate this type of information on the ABS website out of Census Data.”

Competition

“We are seeing more stand alone drive-thrus popping up across the country. And that is one way to do it. 

Brand’s like Guzman y Gomez in particular have been quite active in that space more recently, where they have no other QSR around them.

However, I’ve mostly always leaned toward the value of being in a ‘cluster’ of food providers. This friend or foe situation is where a group of alternate food offers, clustered together, draw in a greater proportion of custom than they otherwise would have on their own.”

With all this being said, the disruption across the wider QSR sector has thrown many long-standing location principles into some disarray. 

While shopping centres have long been frowned upon for their high cost per square metre of space, this was often tempered by the sheer volume of predictable foot traffic, be it food court or otherwise.

Where we sit today in all our altered consumption patterns, it remains to be seen what the landscape looks like into the medium term future at best.

If you would like to contact Peter Buckingham for any assistance or guidance, you can do so HERE.