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Drive-thru has been a reliable method for quick serves’ off-premises business for 70-odd years, while delivery has long been a champion of pizza and Chinese concepts in particular. But all of that started to change a half-decade ago or so with the advent of digital ordering; suddenly, every restaurant in America could explore off-premises strategies to expand convenience and accessibility for its guests.

The timing couldn’t have been better. COVID-19 forced nearly every operator in the country to prioritize off-premises business. In the span of just a few months, the U.S. restaurant industry went through a crash course in serving food outside the four walls, and the effects of that will reverberate for generations. From drive thru to delivery and curbside to carryout, the means with which consumers can experience a restaurant’s menu are more numerous and varied than ever before, and innovations continue to progress by leaps and bounds.

Here, we take a look at the many components of the umbrella term “off premises” to understand how the coronavirus pandemic will alter the restaurant experience of the future—and how restaurant operators are adapting the model to suit their needs for this season and beyond.

All Things to All People

There was a time, not so long ago, when the restaurant industry could easily trace lines between the various service categories, from quick service up through fine dining and with all of the various niches in between. Those category lines had started to blur after the Great Recession. And the coronavirus pandemic has all but erased them.

With dining in severely restricted due to dining-room limitations and consumers’ vigilance in social distancing, restaurant operators spanning the gamut of service styles found themselves pivoting to an off-premises-heavy business model that incorporated delivery, carryout, curbside, and even pop-up drive thrus. And this mass pilgrimage to new service structures—one facilitated by modern technologies like mobile ordering and third-party delivery—is unlikely to reverse course once the pandemic is over. Rather, experts believe dine-in business will be permanently diminished because of COVID-19, and that restaurant brands by necessity will need to plan for more of an off premises–centric business model that incorporates multiple ordering opportunities.

“Clearly, the consumer is not going to be eating inside as much—not only now, but in the future,” says Bruce Reinstein, partner at foodservice consultancy Kinetic12. “You therefore have to provide a lot of flexible options, a lot of them being off premises–based.”

Indeed, Reinstein says the restaurant of the future will have to be “extremely versatile” in order to accommodate guests’ many need states, and should include smaller footprints with order-ahead drive thru, curbside pickup, and delivery. That versatility will especially extend to the dining space, which Reinstein believes should be a tent that can easily be taken down in the off-season. With a pop-up dining room, he adds, operators can create ambiance using picnic tables, a bar, big-screen TVs or projectors, and even a stage for entertainment, and then service the customers there using what he calls “curbside delivery.” Guests would just need to order from an app while enjoying the experience under the tent.

“I don’t think convenience alone is what the consumer wants,” he says. “They actually want to go out. They want to have some type of experience.” To check all of these boxes, Reinstein says, the best real estate will be parking lots, especially in places like office parks where traffic will be reduced due to the increase in working from home.

The entirety of this new restaurant experience will be powered by mobile or remote ordering. That includes the drive thru, which, particularly for brands new to the outdoor lane, should be just a pickup window, Reinstein says. When guests order ahead, he adds, the average ticket goes up and the restaurant can more efficiently move customers through the line. Geo-fencing will be a major piece to this puzzle, he says, in order to time everything appropriately.

These ideas aren’t simply the fantasies of a restaurant consultant; they’re already coming into fruition at major national brands. Taco Bell, for one, announced its Go Mobile store prototype in August as a way to create a seamless and digitally integrated off-premises experience. At just 1,325 square feet (compared with the brand’s traditional 2,500-square-foot model), the Go Mobile store features a dual drive thru with one lane dedicated to mobile orders, contactless curbside pickup spots, and “bellhops,” or employees armed with tablets who can facilitate the guest’s ordering experience. The new model will also feature smart-kitchen technology integrated with the brand’s app to synchronize the timing of guest arrival and food prep.

“If you think about a Taco Bell during a lunchtime, their drive-thru lane is packed,” Yum! Brands CEO David Gibbs recently told QSR. “The only way we can increase sales at Taco Bell at lunch is to get more cars through the drive thru and shave seconds off the drive-thru time. But if you add into the equation the ability to do curbside carryout and take some of those cars out of the drive thru and put them in the parking lot in designated stalls where we can bring food to them the minute they pull onto the property because they’ve ordered it in advance, now that opens up additional capacity. ”

Fellow Yum brand KFC, meanwhile, had already been exploring new store models that accommodated off-premises changes. Late last year, the brand’s South Pacific division partnered with Cincinnati-based design firm NELSON Worldwide to introduce a drive-thru-only store in Australia that looks like a highway toll booth and has five drive-thru lanes—some for mobile-order pickup, some for ordering on the spot. Guests who ordered ahead simply punch in a four-digit code on a touchscreen and their order is sent to the kitchen for preparation.

Marty McCauley, design director at NELSON Worldwide, says this total rethinking of a quick-serve restaurant will become the new norm after the pandemic. “Instead of these 3,000-square-foot units, you’re going to see maybe 1,500- or 2,000-square-foot units,” McCauley told QSR in July. “What brands have learned is they have to have the ability to be agile, and customers are really responding to things like curbside pickup and other off-premises channels.”

Shake Shack really turned heads when it announced this summer that it would open its first drive-thru location. But, similar to Taco Bell’s Go Mobile prototype, Shake Shack’s restaurant of the future isn’t tackling just one off-premises strategy, but rather all of them. New restaurants will incorporate “Shack Tracks,” which are either drive-up or walk-up pickup windows powered by mobile ordering, as well as curbside pickup and in some instances traditional drive thru.

While all of these store designs may seem futuristic, it’s likely the restaurant industry hasn’t even scratched the surface with what’s possible with off-premises business. Howland Blackiston, principal at retail consulting and design firm King-Casey, says restaurants are especially enhancing things like their ordering platforms and their menu communication via off-premises channels. But he’s yet to see something he truly believes is innovative for the restaurant industry.

“That’s not what I regard as innovation—they’re improvements,” he says. “Some are big, some are small. We’re going to see a lot of that. But they are not innovations, because innovations are something that’s really, really new. It doesn’t exist now in any form, and it solves a problem. And it might be solving problems that are yet unarticulated by consumers.” —Sam Oches

Bye-Bye to Brick and Mortar

Even before the pandemic, the very definition of a restaurant was starting to change thanks to ghost kitchens, virtual brands, off-premises tools, and the broader digitization of the restaurant experience. But COVID-19 has supercharged that process. Now more than ever, operators are discovering that they don’t need brick and mortar to open a concept in a new community; all they really need is a commercial kitchen.

And in the last six months, they’ve pounced on that opportunity. Some have partnered with ghost-kitchen companies like Kitchen United and CloudKitchens to establish a virtual presence in new markets. At least one, Chicago-based fast casual Wow Bao, has turned other foodservice operations into its ghost kitchens by licensing its product to other brands for the sole purpose of distributing via third-party platforms.

Still others have launched virtual concepts out of their existing brick-and-mortar shops, powering them through delivery platforms: Popular Bay Area chicken chain Starbird debuted Starbird Wings and Starbird Salads; New York’s Melt Shop rolled out a wings brand of its own; and Los Angeles–based Dog Haus spun up a whole portfolio of concepts called The Absolute Brands, which cofounder Andre Vener says have driven significant incremental revenue to Dog Haus locations. Meanwhile, fellow Angelenos Sweetfin introduced all-vegan Plant Shop, which is running out of six of its 11 shops, with plans to be in all 11 by the end of the year.

“Operating a ghost brand has its challenges, specifically around marketing since there is no brick-and-mortar presence,” says Sweetfin cofounder Seth Cohen. “We are working on developing new marketing initiatives around the brand, which would include more cross-promotion utilizing our Sweetfin guest data, as well as creating collateral that is placed in Sweetfin to-go bags. But we are seeing week-over-week growth at all of the locations that are producing the Plant Shop brand, so the initial results are encouraging.”

Even casual brands have joined the rush to virtual concepts. Chuck E. Cheese is running the virtual Pasqually’s Pizza & Wings out of more than 400 of its locations, while Chili’s and Smokey Bones are each hosting wing concepts: It’s Just Wings and The Wing Experience, respectively. Wyman Roberts, CEO of Chili’s parent Brinker International, said during an August earnings report that It’s Just Wings was already producing revenue at a $150 million-per-year clip.

Indeed, the collision of new tech tools with a global pandemic and consumer behavior trending more digital is producing a foodservice future that is inherently off premises and less dedicated to brick and mortar than virtual real estate.

Perhaps nowhere is this future more obvious today than in REEF Technology. What originally launched as parking management company ParkJockey has become an organization seeking to utilize its most valuable asset—thousands of parking lots across the U.S. and Canada—by turning lots into venues for goods and services accessible through digital tools.

“What we do is reimagine the parking lot as a neighborhood hub, as a place that because of its close proximity to where people live and work and trade, gives us the opportunity to reimagine this underutilized asset as a place that we can bring goods and services and experiences within blocks to the end user,” says REEF COO Carl Segal, who was formerly an executive with Potbelly and Roti Modern Mediterranean.

Food has become REEF’s first big swing at that goal. REEF Kitchens are food truck–like vessels that Segal says can host four to six brands each, and the company configures these vessels strategically across its properties according to both consumer and partner demand. The vessels then function either as food carts for guests—they often have picnic tables adjacent—or as pickup spots for digital orders, making them de facto ghost kitchens.

Segal says there are now more than 100 vessels in 20-plus North American cities. REEF began by operating proprietary brands out of the vessels, with names like Burger Bytes, Wings & Things, and WokTalk. But in the pandemic, REEF has leaned into partnerships with other restaurant concepts, offering a ghost-kitchen lifeline to those brands suffering from traffic issues due to COVID-19. For example, celebrity chef David Chang’s chicken-sandwich concept Fuku, which closed all brick-and-mortar shops in the wake of the coronavirus, partnered with REEF to serve its food in New York and Miami.

Segal points to BurgerFi as another chain that has enlisted REEF’s services. In cases like this, REEF acts as a licensed operator for the brand—no cost required. “For a brand like that, we’re a perfect fit for them … to help them explore, let’s say, parts of the Southwest, where they haven’t been before, or the Midwestern states, or the Pacific Northwest,” Segal says. “So it allows brands to come in super flexible and do things for really no cost of entry, where they in the past would have had to make major expenditures, not only in terms of capital but also human resources, as well as supply chain logistics.”

REEF chief creative officer Alan Philips compares the company to a platform like Amazon and how it revolutionized e-commerce. “We’re just deleveraging the restaurant business and enabling for a more even playing field,” he says. “We’re enabling brands and entrepreneurs and foodies and chefs to reach people, and we’re evening the playing field between the small guy who makes the greatest hamburger in one small location to the biggest guy who wants to reach their customer and decrease their real estate costs.” —Sam Oches



Breaking the Chains of Third Parties

The COVID pandemic has accelerated the industry’s move toward convenience and pushed operators to focus beyond the four walls.

But it’s not a simple road. There’s been tension between restaurants and third-party delivery companies because of high fees, causing several cities to install a temporary cap. More brands are bypassing these fees by forming first-party platforms so the order originates on their website and app. The next step in that evolution, albeit a pricey one, is hiring internal delivery drivers, thus eliminating any third-party involvement.

Original ChopShop is one brand making that leap. Four years ago, it began laying the foundational blocks to elevate its digital presence. To assist with that process, the now-15-unit company signed a deal with Olo to set up its digital platform. CEO Jason Morgan says the brand was attracted to Olo’s Dispatch feature, which allows it to take the order and auction it off to a third-party delivery driver.

However, Morgan says the downside was that restaurants still didn’t control the full experience. The company had to rely on third-party drivers to be on time, take orders, and be courteous. So when Original ChopShop received funds from the Paycheck Protection Program, the restaurant decided to bring people back to work and overstaff stores, and then try an experiment: an internal delivery program.

The brand partnered with routing and fleet-management platform Onfleet, which made the process more automated and allowed it to “create a driving company within a company,” Morgan says. The drivers have an app and receive orders through Dispatch. The restaurant drivers get priority on the order, and if there’s any overflow, the order goes to a third party.

Morgan says the program fits with the brand’s identity, which is built on convenience. On average, food comes out in roughly four and a half minutes.

There’s about six or seven drivers per store, although not at the same time. They’re focused on covering the lunch and dinner shifts, Morgan says. “It’s pretty awesome in terms of how it works,” he says. “It’s really allowed us to control that process from beginning to end.”

The implementation of internal delivery is in conjunction with the roll out of a new app and rewards program. Morgan says the app pushes people to order digitally, whether it’s pickup, curbside, or delivery. He adds that more than 50 percent of orders originate on the company’s digital platforms, but the goal is to control all of it.

Portillo’s, a 62-unit fast casual based in Chicago, has the same objective. Dino Northway, Portillo’s senior manager of off-premises dining, says the restaurant always knew it wanted to own the delivery experience, and COVID only validated that wish. He says Portillo’s self-delivery program was a way for the brand to get outside the four walls and bring its “world-class experience” directly to guests.

The new program cross-trains employees and allows them to earn wages plus tips. Drivers must be at least 18 years of age, have a vehicle, have a valid driver’s license, and must be able to show proof of insurance.

“The operations teams are world-class,” Northway says. “You can see it in the dine-in, the drive-thru, and now it’ll be with self-delivery. [It’s] part of the reason why Portillo’s historically has been committed to training. Instead of spending money on advertising, we spend money on training programs, and restaurants run like well-oiled machines. Our operators lead with greatness and train for greatness by setting standards and quality and service, and that’s how we reach our highest AUVs in the industry [$7.27 million].”

The company will continue to partner with DoorDash and Uber Eats. But Northway says that for Portillo’s, a self-delivery program was a matter of thinking about where the restaurant industry is headed. The company wants to ensure that it’s in control of its own destiny.

“Having our own delivery drivers, we can offer catering delivery and set-ups,” Northway says. “That’s something you can’t get through a third-party marketplace. We have a goal to create an unrivaled experience for our amazing guests, and controlling the full experience from ordering through self-delivery is a way we can do that.”

When Morgan thinks about internal delivery, he’s reminded of the “unobtainable triangle”: fast, cheap, and quality. The idea is that a company can only master two out of three. For example, a restaurant can be fast and inexpensive, but there won’t be quality.

But he says the way Original ChopShop is organizing delivery, all three can be accomplished. Orders from a company driver are 25 percent less expensive, delivered up to 15 minutes faster, and brought to customers’ doorsteps by an Original ChopShop employee.

Morgan will be the first to acknowledge that hiring, training, and retaining drivers is a daunting task. Profitability becomes an issue because the restaurant needs enough deliveries to make money or break even. Margins are thin, and there’s little room for error.

It’s all about combining the right people, training, and tools with accurate and timely data.

“We’re constantly watching what’s happening and tweaking it. It’s one of the benefits of being the small company that we are,” Morgan says. “We’re very nimble and can pivot when we need to pivot, and so I think that’s what will ultimately make us successful. … The more we do it right, the more we’re going to drive additional business to us. It is going to have this snowball type of effect.” —Ben Coley

Drive Thru, Story, Chop Stop, Portillo's, Taco Bell