Ambitious fast-food entrepreneur William Newell has crunched the numbers and determined that his success is tied largely to obtaining drive-thru restaurant locations.
His challenge is finding them.
Across many Metro Vancouver suburbs, the amount of real estate that is eligible to be zoned for a drive-thru restaurant is shrinking. City councils increasingly encourage mixed-use developments while forbidding drive-thru restaurants at sites where there would be homes above the idling cars.
Newell and three silent partners currently operate four Carl’s Jr. locations. Three of the restaurants have a drive-thru component, including one that opened last month at 1940 Oxford Connector in Port Coquitlam .
The quartet plans to open two more restaurants in January. One will be on the outside perimeter of Guildford Town Centre; the second January opening will be a drive-thru restaurant in South Surrey.
“Half of a restaurant’s sales are from the drive-thrus,” Newell told Business in Vancouver. “You pay your lease on the square footage in the building, not on the land. So drive-thru locations have double the sales but the lease rate is not double. It makes good business sense.”
The Metro Vancouver-based entrepreneur’s challenge as he strives to open 25 Carl’s Jr. restaurants by 2019 is to find possible locations. He continues to look for the perfect site in North Vancouver.
Earlier this year, he lost his bid to sign a lease for a large site zoned to allow a drive-thru at 906 Marine Way, where there used to be a Pizza Hut. The landlord instead chose payday loan giant Cash Money.
While competition over available spaces can make the hunt for locations tricky, municipal planning can make it even trickier.
“Drive-thrus are expressly forbidden in all mixed-use areas of the city,” North Vancouver city planner Michael Epp told BIV. “If you’re in our town centre or lower Lonsdale, by the SeaBus, where pretty much all development is condo development above a retail podium, you can’t do a drive-thru of any type in those locations.”
Newell also hasn’t had much luck in West Vancouver, where the district council forbids drive-thru businesses in its Ambleside district, which is bounded by 13th and 19th streets as well as Bellevue Avenue and Clyde Avenue.
“There is a McDonald’s drive-thru at Park Royal but that sits on Squamish Nation land so it is outside our bylaw,” said Jeff McDonald, West Vancouver director of community relations and communications. “Drive-thrus would be permissible in other commercial areas of West Vancouver – Dundarave or Horseshoe Bay, for example – but our planners would scrutinize an application, the proposal, relative to the style of development in those areas.”
Opportunities to open a drive-thru restaurant are also diminishing in Vancouver.
“Restaurants are allowed pretty much throughout the city,” said John Greer, Vancouver’s assistant director of development services. “But for drive-thru service in conjunction with a restaurant, there are very few areas of the city where you can do it.”
Greer said arterial roads such as Fraser Street, Main Street, Marine Way and Broadway would likely be the best spots for new drive-thru restaurants but permission would be based on conditions such as having enough space to prevent vehicle lineups on city streets.
“Another challenge, in addition to finding drive-thru locations, is that, if we want to go in malls, there are often covenants that restrict having another burger joint,” Newell said. •
