When longtime resident Alma Joyce Jones learned that a national dollar store brand was coming to the village of Bonita, La. (population 164), she borrowed the words of nominated country singer Jimmie Allen at the Grammy Awards: “It’s the little things that make a big difference in a small town!” If legends are forged in small towns, so are fast food and retail stalwarts, which have found their sustenance and their growth in these close-knit communities.
The pandemic has sparked a new wave of American migration: more individuals and families have moved from big cities to rural areas and small towns. As more Americans prefer to live in these areas, fast food restaurants and other quick service restaurants (QSRs) are beginning to recognize this shift in consumer sentiment and have begun expanding their operations into newer markets and previously unexplored. Major coffee brands and other well-known QSRs have recently emphasized rural and small-town areas of the United States in their respective growth plans. Business leaders insist these areas have many other benefits, such as lower rents and reduced labor costs.
In addition to upgrading existing structures on main streets, rural areas and small towns offer the opportunity to build new restaurants that complement post-pandemic consumer behavior. Notably, more American fast food consumers are spending less time in stores and instead choosing restaurants with drive-thru options. Research on consumer dining behavior also suggests that when choosing between two locations of the same business, consumers prefer the one that offers a drive-thru. Data also shows that consumers not only prefer locations with drive-thrus, but also those with sufficient drive-thru capacity.
Here are three key considerations when considering a transition to the modern drive-thru.
1. Existing community infrastructure and zoning regulations may limit options.
Given the recent influx of Americans into small towns, existing roads and traffic patterns could be strained beyond their initial design. A restaurant relying on an established drive-thru in these areas could exacerbate these problems, leading to congested intersections and blocked sidewalks and bike lanes.
In some areas, city leaders have attempted to limit or even ban drive-thru services. However, these attempts could potentially be thwarted by working with community leaders to develop new traffic patterns, improve pedestrian access, and develop strategies to reduce traffic congestion. If existing zoning regulations may limit the expansion of fast food restaurants, then QSRs will need to work with local leaders to revise or repeal these regulations. Additionally, increased traffic in areas shared by pedestrians and other road users could increase the risk of accidents. Therefore, advance planning will be important to minimize accidents between drivers and pedestrians in drive-thru areas.
2. Modern drive-thru services require a larger neighborhood.
The days of a single drive-thru with a single point of sale are over. Instead, consumers are looking for options that maximize convenience and efficiency, including double or triple drive-thrus (i.e., two or three lane drive-thrus) and queues of waiting for dedicated mobile orders. Experts don’t expect this trend to stop anytime soon.
In this context, fast-food restaurants and other QSRs will have to purchase or lease parcels with sufficient space for new establishments that offer expanded drive-thru options. Several major chicken and burger brands have introduced store concepts and prototypes that maximize consumers’ drive-up access while minimizing restaurants’ carbon footprints.
3. Rural areas can pose supply chain challenges.
The fast food industry is already familiar with supply chain constraints. Operating in rural areas, which suppliers may struggle to access easily and quickly, can be tricky, particularly when the industry is grappling with global shortages. Overcoming these challenges will require creative thinking, contingency planning and strategic partnership.
Restaurants expanding into rural and small-town markets have relied on data systems to track the purchasing behavior of local consumers, allowing them to better plan for supplies that may be limited or sold out. Additionally, industry experts recommend restaurants identify alternative suppliers when possible. However, given the constraints inherent in rural and small-town markets, experts suggest that alternative suppliers should serve as a contingency plan rather than a core supply chain strategy.
Finally, fast food restaurants in rural areas and small towns might consider how best to partner with the communities in which they operate. Local agricultural industries often provide economic support to rural towns, and restaurants could tap these local producers as suppliers. One major QSR salad restaurant has already had success building a network of local suppliers for its menu options.
Key points to remember
Although urban centers were once critical to successful restaurant expansion, changes in U.S. consumer behavior suggest that small towns and rural areas are the (re)new(ed) frontier for fast food and restaurants fast food. More and more Americans are settling in these areas and prefer dining options that provide them with maximum convenience. Restaurants can take advantage of this cultural shift by exploring expansion strategies that emphasize small-town and rural markets. Industry leaders recommend renovating existing locations or converting vacant storefronts and building new locations with expanded drive-thru and mobile order pickup. Successful expansion strategies must adapt to the specific and unique needs of the community. Restaurants can work closely with local leaders to ensure seamless integration.
Additional research and writing by Sean Worley, Summer 2024 Associate in ArentFox Schiff’s Washington, DC office and law student at Georgetown University Law Center.
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