Drive-Thru-Only (DTO) Coffee Shops Expanding

Estimated read time: 4 minutes and 33 seconds

THE JUICE IS LOOSE

Top Drive-Thru-Only Coffee Shops Expanding Across the Country 

DRIVE-BREW: Embracing the convenience of drive-thru coffee, a cultural norm since the '70s when fast-food chains introduced this swift service. By the '90s, coffee shops adopted this trend, making on-the-go coffee a staple for busy commuters and enthusiasts. Today, nearly every major U.S. coffee chain offers this speedy option.

Rise of DTO (Drive Thru Only): Not too long ago, if you had a small parcel of land under one acre, you would be out of luck since the lot was too small to build a conventional quick-service-restaurant (QSR) building, which typically requires 0.75 - 1.25 acres of land to develop a 3,500 SF McDonald’s for example. Now, you can build a DTO coffee shop with a small lot of land and a building size of 800 - 975 SF.

Top Spots: We've listed the top DTO coffee shops across the country based on customer reviews, focusing on service, reputation, and coffee quality:

1. Dutch Bros Coffee - 800+ locations across 16 states (Locations)

2. The Human Bean - 158+ locations in 20 states (Locations)

3. Shadrachs Coffee Roasting Company - 14 locations in 3 states (Locations)

4. T.H.I.N.K. Coffee - 7 locations in Arkansas (Locations)

5. 7 Brew - 160+ locations across Midwest and South (Locations)

6. Jolt - 3 locations in Texas (Locations)

7. Drip Thru Coffee - 2 locations in Georgia (Locations)

8. Scooter’s Coffee - 776+ locations in 30 states (Locations)

9. Florence Coffee Company - 24 locations in Montana (Locations)

10. Moka - 18 locations across 3 states (Locations)

🧠 EDITOR’S THOUGHTS

These DTO coffee shops have a unique footprint of about 800 to 950 SF in improvements, sometimes with drive-throughs on both sides of the building. These sites are typically well-located, with long-term NNN leases in place (10-15 years plus options) along with rent increases throughout the base term. The CAP rates oftentimes trade below Dunkin’ and Starbucks, but the price points are low since the rent are generally lower.

📝 DUTCH BROS CHEAT SHEET

• Average Price Point: $1.3M - $2.5M

• Average Cap Rate: 4.15% - 5.3%

• Lease Type: Ground Lease or NNN

• Rent Increases: 10% every five years

• Base Term: 10-15 plus Four 5-Year Options

• Average Rent: $95,000 - $115,000

• Lot Size Requirement: 30,000 SF (0.7 AC)

• Building Size: 800 - 950 SF

TRIPLE NET TENDIES

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NET LEASE NUGGIES

• DLC Management Corp. secures growth capital to double portfolio size. The New York-based owner-operator of open-air centers aims to expand its assets by $2 billion within three years. DLC views the current market disruption as an opportune time for acquisitions and has raised capital from Temerity Strategic Partners to fuel its strategy. The company believes that open-air retail, which has shown resilience, presents a significant investment opportunity. DLC's focus on this sector has already yielded positive results with anchor leases and agreements with fitness brands like Planet Fitness, Crunch, and LA Fitness. (Read More)

• New York-based Atomic Wings adds drive-thru format to its design lineup. CEO Zak Omar plans to separate the brand from competitors in the chicken wing category by being the first to offer drive-thru service. With a focus on speed and convenience, Atomic Wings aims to capture an additional 30% in sales. Following a kitchen redesign to boost efficiency, the brand will strategically identify suitable locations for the new drive-thru format, while traditional locations will continue serving customers in the traditional way. (Read More)

• Pittsburgh's Clean Express Auto Wash Expands to Mt. Nebo Clean Express Auto Wash has announced the opening of its newest location at 201 Mt. Nebo Rd. in Pittsburgh. With this addition, Clean Express now operates seven locations in Pittsburgh and plans to open three more by spring 2024. (Read More)

BEAST TWEETS x POSTS

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