No More New Drive-Thrus, Minneapolis City Council Says

No More New Drive-Thrus, Minneapolis City Council Says

Drive-thrus are key revenue generators for many chain restaurants. So why did Minneapolis ban them?

The Minneapolis City Council late last week voted to ban construction of new drive-thrus – a decision that’s garnered national media attention.

Council members have emphasized that the ban applies only to new drive-thrus; all existing drive-thrus will remain in place. Even before the citywide ban was enacted, the city had already prohibited drive-thrus in all 21 zoning districts except for six, says council member Lisa Goodman. And of those six, half are industrial, she notes.

“As much as it’s an exciting topic for all of the media to cover, no one loses anything they have now,” she says.

In Goodman’s view, the limitations actually make existing drive-thrus more valuable. What’s more, businesses will be able to keep their drive-thrus even if they’re sold to new ownership. Companies aren’t prohibited from renovating their existing drive-thrus, either.

Minneapolis isn’t the first city to ban drive-thrus, though city officials say it’s the largest to do so. In Canada, at least 27 local municipalities have enacted some sort of ban on fast-food drive-thrus, according to research from the University of Alberta.

The Minneapolis City Council is rolling out the ban to help reduce greenhouse gas emissions and noise levels. Though the city hadn’t heard any specific requests for the ban, Goodman says drive-thrus have been unpopular proposals in the past.

“It’s been my experience that every application for a business that requires a drive thru generates opposition from the immediate neighbors and often the neighborhood association,” Goodman said. “No one wants to live anywhere near a drive-thru.”

Still, it’s worth noting that many chain restaurants generate a considerable amount of sales via drive-thrus. QSR magazine, a trade publication for the restaurant industry, estimates that most major fast-food restaurants generate up to 70 percent of their sales through drive-thrus.

“In conception, people say they don’t like drive-thrus. Yet they use them all the time,” says Jonathan Maze, executive editor of Restaurant Business magazine.

Restaurants and coffee shops that add drive-thrus can often boost sales by about 20 percent, Maze says. And drive-thrus are “increasingly popular” among both restaurant chains and consumers, he notes.

Consider Starbucks Corp.: The Seattle-based coffee company plans to include drive-thrus at 80 percent of its new U.S. cafes, Bloomberg reported last year.

“Convenience is more and more important in the restaurant business,” Maze says. “That’s why we have all these delivery companies now. That’s why mobile orders are more popular.”

The data seem to bear out Maze’s sentiments. For instance, Dunkin’ Donuts stores with drive-thrus consistently outperform stores without them. In 2017, the company reported average sales of nearly $1.3 million for its drive-thru stores. That compares to an average of just over $1 million for stores without drive-thrus, according to Dunkin’ Donut’s franchise registration documents with the Minnesota Department of Commerce.

That trend held true in all four Dunkin’ regions across the country, according to the document.

The ban on new drive-thrus could prompt some restaurants to start looking toward inner-ring suburbs for their new locations, Maze says. The decision also may end up making delivery options more important over time, he says.