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How digital orders are reshaping restaurant footprints


A dedicated to-go counter is part of Famous Dave’s smaller prototype.

Restaurant brands that are watching more of their food being carried out the door by the likes of DoorDash and Uber Eats are taking a hard look at how takeout and delivery orders are impacting real estate strategies, store designs and operating efficiencies.

The rapid growth in online and mobile orders is creating widespread change across the restaurant industry, and what some brands have seen thus far could be just the tip of the iceberg. In its 2018 report “Is the Kitchen Dead?”, investment bank UBS predicted global sales from online food ordering will continue to rise by more than 20 percent per year over the next decade to reach $365 billion worldwide by 2030.

Restaurants across the board from QSRs to full-service brands are seeing that accelerated growth firsthand. Famous Dave’s is one franchise with a strong takeout and catering business across the company’s 20-plus years in business. However, those orders have jumped from about 25-30 percent of sales to 50 percent, with much of that increase coming just in the last 18 to 24 months. Last year alone the company saw a spike in orders from third-party delivery sites by almost 40 percent.

“I like to think that growth is attributed to the fact that we’ve always been a strong player in the off-premises world and ahead of the game on a lot of packaging solutions and the ability for our food to travel well,” says Al Hank, Famous Dave’s senior vice president of operations. The shift in sales fueled by growing demand for food to go has prompted changes in real estate strategy that include smaller brick-and-mortar stores.

Famous Dave’s restaurants have typically occupied a 6,000- to 7,000-square-foot space. Although characteristics of individual locations dictate the service model and store format, the company is now focusing on expanding with a model that is about half that size at 3,000 square feet.

Famous Dave’s showcased the smaller prototype last September with the relocation of its corporate store in the Uptown neighborhood of Minneapolis. The store also features a more compact bar and dining area.

The firm has since opened two smaller format franchise locations in Tucson, Arizona, and Provo, Utah. The new prototype is a variation of its legacy “BBQ Shack” concept that features counter-style service for dine-in or takeout orders.


At this Capriotti’s in Salt Lake City, online orders get their own pickup spot in the restaurant.

Design tweaks enhance operating efficiencies

The increase in mobile orders comes at a time when labor and real estate costs are rising. So, the more franchise brands can outsource delivery and shrink footprints to create efficiencies, the better. In most cases, brands are able to shrink store footprints because they are reducing the size of in-store dining areas. Online orders also are creating changes to space layout to improve traffic flow and operating efficiencies in both front of the house and food prep areas.

Sandwich chain Capriotti’s is now generating more than half of its revenue through third-party delivery firms, catering aggregators or its own online orders, and the firm anticipates more growth ahead.

“We have substantially changed the footprint, as well as the layout of the space itself,” says David Bloom, chief development officer with Capriotti’s. The franchise reduced its store requirements from about 1,800 to 2,200 square feet to between 1,200 and 1,400 square feet. That reduction tends to make the stores more operationally efficient as well by lowering some of the other operating costs, adds Bloom.

Restaurants that are generating higher takeout volume also are incorporating changes to layout that include creating separate pickup stations for customer orders and third-party delivery partners, as well as investing in technology to create heated shelving and rapid pickup stations. Some brands have even created separate stations in their food prep areas for off-premises and in-store orders aimed at improving speed and order accuracy.

Changing customer traffic and smaller footprints also is changing site selection criteria. Locations with ease of access and good ingress and egress are a priority, while some brands also are seeking locations that allow for a drive-thru window to add another layer of convenience.

Smaller stores open up real estate opportunities

BurgerFi is another chain that is modifying stores to keep up with changing operations due to the rise in orders coming from online sources and its in-store self-service kiosks.

Individual stores generate between 15 and 25 percent of orders online from third-party delivery sites, as well as orders coming from either its own website or a new mobile app that rolled out in January 2019.

Combined, the off-premises orders and self-service kiosks are allowing BurgerFi to consider more flexible real estate footprints, notes Charlie Guzzetta, chief brand development officer. The company utilizes different store formats that range in size between 1,800 and 3,000 square feet.

“Smaller boxes that we may not have been able to go into previously we’re now able to look at,” he says. Smaller stores also allow franchisees to consider locations in trade areas where the cost of rent was a barrier to entry in the past, he adds.

Overall, the rise in online and third-party orders is generating a positive impact for many brands with an opportunity to increase revenues and reduce operating costs. However, companies recognize that it is still early in the game in terms of predicting how much sales will shift to pickup and delivery orders. Generally, brands are seeing a bigger volume of third-party delivery business occurring in urban locations. Third-party operators, though, are expanding into secondary and tertiary markets as well.

“People’s lifestyles don’t change that much around the country. With time, these services become more and more ingrained in everyone’s life to the point where they can’t remember living without them, and that has happened really, really quickly,” says Bloom.

In addition, it won’t be too far into the future that instead of drivers running into stores to pick up orders, there will be autonomous delivery vehicles with no drivers. Franchise brands also are in the early stages of testing real estate alternatives, such as dedicated off-site virtual kitchens that can be located in less-expensive real estate.

“All of these things—virtual kitchens, aggregators, artificial intelligence, autonomous vehicles—they are all going to impact the industry a lot faster than people realize, and you have to be planning and testing for that today,” adds Bloom.

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