Dive Brief:

• Del Taco opened its first drive-thru-only “Fresh Flex” location in Albuquerque, New Mexico, this week, the company said in a press release Monday.
• The restaurant is 1,200 square feet and includes a drive-thru lane, walk-up window and pickup lockers for online and delivery orders. Comparatively, a freestanding Del Taco location is typically 2,000 to 2,400 square feet. 
• Del Taco originally developed this off-premise-only model in 2020 as a way to expand opportunities for franchisees via smaller real estate and provide improved efficiencies.

Dive Insight:

Del Taco’s new store design aligns with the brand’s expansion strategy, which ramped up in 2021. As of the end of the fiscal Q3, Del Taco signed 20 agreements for 153 restaurants and opened two franchised restaurants, Darin Harris, Jack in the Box CEO, said in August during an earnings call. In addition to the drive-thru only design, Del Taco offers a freestanding restaurant, end cap format and conversions.

Jack in the Box, Del Taco’s parent company, began refranchising Del Taco units last year. The company refranchised 66 Del Taco units during the first three quarters of the fiscal year, which included 50 sold units in Q3, and expects to reach a total of between 90 and 120 refranchised units by the end of the year, Harris said. 

“This is led by tremendous demand from our proven operators and developers within Jack and Del Taco,” Harris said. “The combination of healthy valuations and incremental development agreements plus using proceeds for share repurchases make these transactions accretive as we move to a more asset light model.”

Del Taco is just the latest in a growing list of QSR chains, including Jimmy John’s, Biscuitville, Tim Hortons and Zaxby’s, to debut drive-thru-only units. Sister company Jack in the Box opened a 1,350-square foot off-premise-only restaurant last year that includes a double drive-thru, walk-up window for ordering, pickup window for digital orders and dual assembly kitchen. These types of restaurant formats emphasize smaller real estate and kitchen buildouts and help lower overall operational costs since the footprints don’t feature dining rooms and tend to require less labor. Del Taco said its new model has the same kitchen operations as other stores in its portfolio.

“While the building is smaller in size, we still have the same made-to-order kitchen where we are freshly grilling marinated chicken, preparing guacamole from fresh avocados and slow cooking our beans from scratch every day,” Chad Gretzema, Del Taco Brand president, said in the press release.