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Krystal is one of several restaurant chains that are rolling out small prototypes to improve portion economics. / Image courtesy of Krystal
The restaurant of the future is small. He may not have a seat. And workers have to take an extra walk after work to get inside.
In their never-ending quest for improved speed and efficiency, restaurant operators are cutting back on the size of their buildings. A string of new prototypes that have appeared over the past two years have fewer seats or no seats at all, and kitchens have been redesigned to reduce staffing.
All designed to improve unit economics. The pandemic has shifted much of the dynamic away from dine-in sales at restaurants and toward a variety of new takeout options. Including mobile ordering and delivery. However, post-pandemic challenges, including labor shortages, higher wage rates, and higher costs for food and energy, require brands to look everywhere for efficiency in their restaurant designs.
Restaurant menu prices rose 8.5 percent in December, but restaurant prices rose much faster. For example, wholesale food costs rose more than 14 percent year over year in December. Payrolls rose more than 6 percent in December after slowing in recent months, but wage rates posted double-digit annual gains.
In addition, high real estate costs, especially for the type of driver-centric sites that many of these brands choose, it is important for companies to get as much as they can from a small square meter.
As such, in addition to integrating digital and opening new restaurants for mobile ordering, delivery and a drive-thru location or two (or four), restaurateurs are cutting back on space and looking for efficiencies in their buildings, all to improve profitability. .
“If you can build something 25 to 30 percent less expensive, that’s interesting,” Tom Steiger, CEO of burger chain Crystal, said last year. The chain has introduced a new prototype with 300 square feet less seating than the traditional prototype.
Jimmy John’s is one of several restaurant chains with small, drive-thru locations. / Photo courtesy of Jimmy Jones.
There are no seats
Krystal has even a small example with no seat. Dozens of restaurant chains have at least experimented with such ideas, believing they could generate strong revenues with minimal upfront and ongoing costs.
In Oklahoma City, for example, Jack in the Box introduced a drive-thru station that features a walk-up window and a lane designed for mobile and delivery. The space is more than half that of a traditional space, but it helps shave a fifth off the construction cost.
of Cheyenne, Wyo. Based on Taco John, meanwhile, executives believe that they can confirm the model for future development has two drive-through-only locations. One of them generates $1.7 million in annual revenue, far above the chain’s average of $1 million.
Many other chains are experimenting with or opening sit-down restaurants, one of the biggest post-pandemic trends in the industry. And that includes restaurants that aren’t even within driving distance to begin with.
In Michigan, sandwich chain Quiznos is testing two, 650-square-foot, take-out-only locations that will be assembled and assembled on-site. Schlotzsky’s, another sandwich chain, is also testing a driver-only unit. So does Jimmy John’s. Many coffee chains, such as Caribou, have shifted their growth focus to such segments.
This trend is also being seen in urban markets where driving is impractical and real estate is expensive. Chipotle, Panera Bread, Sweetgreen and Wingstop are all operating digital-only pickup locations.
But many companies believe that small will be better in the future. American customers want their restaurants to focus and seek practical challenges.
Canadian coffee and donut chain Tim Hortons has struggled to gain a foothold in the American market. The company blamed the problem in part on its decision to open a larger number of operating units in Canada. Currently, executives are testing several smaller restaurants that they believe will best suit the market.
The company is testing these restaurants in Ohio and Texas. Some are drive-only. Early results suggest improved class economy.
The company is testing such locations in Ohio and Texas. We have seen good success in terms of capital expenditure, top line growth and performance, which is from [return-on-investment] CEO of Tim Hortons parent company Restaurant Brands International, Jose Sill, said last year.
Wendy’s new restaurant design features a reconfigured kitchen, so employees will have to walk a little further to order. / Image courtesy of Windy.
in the kitchen
Sure, it’s easy to cut seats out of prototypes when lots of people are carrying their food or ordering takeout. But most of the cost is in the kitchen, and it is not easy to remove the kitchen space from the restaurant: food still has to be prepared. However, that’s where most of the work needs to be done to improve speed and efficiency.
These efforts include new appliances that take some of the work out of the kitchen. A redesigned “kitchen of the future” at Taco John’s support center in Minneapolis features automatic dispensers for potato oles that simplify the process of loading frozen potatoes into baskets.
It also features a tortilla maker that connects directly to a point-of-sale system that automatically starts making tortillas. The new equipment and reconfigured kitchen will shave 20 seconds off the average order time.
At Starbucks, demand for cold drinks has increased in recent years, and they now account for more than 70% of the chain’s beverage sales. However, these drinks are highly customizable and while it’s a $1 billion business for the chain, it complicates matters for employees. It is one of the most cited reasons why the business, which has long prided itself on its relationship with workers, is facing an unprecedented union campaign.
The brand is investing $450 million in equipment such as new coffee brewers. The brewers ensure that staff no longer have to spend time brewing freshly brewed coffee, allowing them to focus on other orders as sales decline.
But it’s also investing in new equipment to simplify the multi-step process of creating cold drinks. A Grande Mocha Frappuccino typically takes 16 steps of 87 seconds. The new machine reduces that to 13 steps from 36 seconds.
These aren’t the only things companies are cutting from their kitchens. Companies like Wendy’s are developing prototypes that will reconfigure kitchens so that workers have less time to walk around preparing orders. Company officials say the new digital-based prototype will reduce labor costs, and increase speed, by simply bringing equipment closer together.
Wendy’s CFO Guncher Ploch said last year: “I personally walked it. “It’s a very different design. The kitchen has been remodeled. So you literally have to take small steps to accomplish all your tasks. This drives operational efficiency.”
It remains to be seen how much all of this will affect the restaurant’s operations over time. But in the endless search for better unit economics, operators don’t neglect their actual restaurants.
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