Off-premises dining continues to occupy a larger space in consumers’ wallets and shows no signs of slowing down. From 2024 through 2025, off-premises customers accounted for 83% of limited service restaurant visits and 30% of full service restaurant visits, vs. 76% and 19% in 2019, per data from the National Restaurant Association.

In response to such growth, many operators now offer curbside pickup zones, dedicated takeout counters, and expanded capacity for both drive-thru and delivery. But the key to unlocking true off-premises success requires meeting customer expectations pertaining to speed, technology, convenience, value, and quality without compromising unit economics. And for all of this to happen, it must do so by design.

What off-premises only options are out there?

Generally speaking, operators can choose from three different off-premises only formats.

• Delivery-only sites often function similarly to ghost kitchens in that they have no dining room and feed off app-centric demand that primarily comes from third-party delivery. These formats flourished immediately after the pandemic, but this pure play has cooled of late as many brands pivot to hybrid or storefront plus delivery formats.
• Pickup-centric facilities that serve customers and delivery drivers, often offer minimal dining space and represent another option. These facilities may include walk-up windows designed around makelines, staging shelves, and food lockers, which could be heated or ambient depending on the concept. Many pizza companies pioneered this format, and other concepts could follow given that just about all menu items are now considered “deliverable.” Wonder represents one concept with a big appetite for growth that focuses mainly on delivery and pickup. While Wonder does offer some on-premises dining, it dedicates the bulk of its operations to efficient production and packaging stations. Wonder even purchased Sweetgreen’s Spyce technology platform and plans to implement it to automate its operations.
• Drive thru-focused prototypes that use a small back of house to service multiple drive-thru lanes represent the third option. AI-enabled voice ordering and digital check-in could eliminate the need for human order takers to digitalize the experience. The drive-thru business does require a significant site investment for vehicle circulation. Most concepts still have pick-up windows or small counters to accommodate non-driving guests or deliveries.

The Benefits: Where the Off-Premises Format Shines

One of the biggest design benefits for off-premises guests is reduced construction costs driven by a smaller footprint. No dining room means lower capital expenditures, including shell finish costs, seating, restroom count and lower occupancy costs. This approach also unlocks more site options, including end caps, pads, or urban spaces.

Off-premises only designs may also drive higher labor efficiency rates. Focusing all efforts on the production area can create specialization efficiencies in an operation. This focus enables dedication to digital makelines and opens the door for automation that can increase capacity and throughput. A few examples of this type of automation include the soft drink machines that some quick-service chains have had at their drive-thrus for years. Sweetgreen’s automated line, known as its Infinite Kitchens, gives the chain the capacity to process up to 500 orders per hour. When it hits that goal, Sweetgreen can achieve significant labor savings and margin gains. Chipotle’s digital makelines that support its Chipotlanes, which are drive-thru lanes dedicated to customers who order ahead via the chain’s app, already have specialized KDS screens to improve team member efficiency. For added efficiency, Chipotle continues to test ways to offload the production of bowls and salads to cobotics (robotics?), while humans handle burritos.

The Drawbacks: Hidden Friction You Must Engineer Out

The benefits of focusing on off-premises only can also emerge as a drawback for some operators. To excel in an online world, operators need to make sure their digital experiences reflect their brands. Failure to do so could impact performance.

Operators also need to consider the impact an off-premises-only location will have on brand visibility. Without a street-facing dining room, brand discovery becomes more difficult. Virtual concepts have struggled when it comes to building awareness, too.

Also, quality control of the product once it is out for delivery remains challenging. The drivers working with the third-party aggregators are not part of the restaurant and may not have the same company interests as your own employees would. Order stacking by third-party dispatch and app spikes create variance in delivery times and quality control risks.

The last aspects that could affect off-premises only units are the cost of packaging and potentially, food safety. To ensure food safety, orders via third-party delivery often require additional packaging steps compared to dine-in orders and even more traditional to-go or delivery orders. These added steps can drive up costs and complexity. Also, a challenge for all delivery concepts is the food’s transit time is not under your control and is often not in a temperature- controlled environment. These factors can make keeping food at safe temperatures  a challenge.

Unit Economics: A Simple Off-Premises P&L Framework

Like with any business, a higher top line makes the bottom line work better. When the digital sales effort works, and the concept successfully generates sales similar to a traditional restaurant, it unlocks many potential benefits. Assuming  $1.0 to $1.2 million amount in annual sales for a single kitchen with hybrid pickup/delivery, we could expect the cost of goods sold to be in the 29% to 31% range. This is a little higher than normal to account for packaging that goes with third-party sales.

In contrast, under the same scenario, the labor picture could be a little brighter than traditional restaurants in an off-premises centric  scenario. Relying more heavily on digital orders means staff does not have to enter checks into the point-of-sale system and collect payment, which can account for 15% to 25% of work content. Labor efficiency could be further improved with automation and a simpler management model since there are  less staff and guest interactions.

Given that off-premises-centric facilities tend to be smaller, occupancy and utilities should be better than the 10% to 13% benchmark. A target of 8% to 10% in a smaller box with the right equipment should be achievable.

Commissions to third-party companies  often come in at around 8%, which represents a critical cost to manage.

What’s the bottom line? After taking into account the factors outlined above, an off-premises-centric concept could still outperform a traditional restaurant by 2% to 3% in terms of profitability if all other costs are in line.

Equipment and Layout: What Belongs in an Off-Premises Only Box

When designing an off-premises only restaurant, a few key elements must be present.

First and foremost, guests and delivery drivers must be able to find the concept both digitally and  physically. Some concepts rely solely on third-party aggregators, but this carries a high commission cost.

For high-volume units, consider multiple makelines. Pay special attention to the design for delivery and pickup stations to ensure they are easy to find and execute by your team members. A huge part of this is the expo or packaging station for checking, consolidating, packing, labeling, and sealing the orders. If the business has a high delivery incidence and that delivery is done internally, the task to assign, route and consolidate orders becomes key, mimicking an air traffic controller at an airport trying to land all orders as efficiently as possible. Automation forward kitchens, combining traditional spaces with higher degrees of technology can help by shifting labor from assembly to ingredient preparation, restocking and order delivery.

In the post pandemic era, ghost kitchens promised low overhead and unlimited virtual menus, but many struggled realizing the sales, customer connection, and overall presence. And the reality is that brands that have multiple sales channels will have a higher chance of success, so combining small storefronts and pickup hubs for people, via counters or windows or cars via drive-thru paired with delivery options could give brands a higher chance of success.

As a result of all these factors, we see that hybrid model that has sales shared by multiple revenue centers, but with a focus on the production, packaging, and delivery for optimized off-premises as a winning formula.