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February 16, 2023

How a Fast-Food Chain Got It Right Way Ahead of The Takeout Revolution

Tony Treadway

How a Fast-Food Chain Got It Right Way Ahead of The Takeout Revolution.

Two recent articles, one in the Wall Street Journal and another in QSR magazine point to how a fast food chain established in 1956 got it right for today’s takeout revolution.

The Wall Street Journal article chronicles a significant shift in consumer habits that peaked during COVID but remains the new business driver. Citing research by NPD, the article notes that 85% of all fast food orders were taken to go either through a drive-through window or order pickups inside the restaurant. That’s down from its peak of 90% in 2020, but up 76% from the days prior to the pandemic. For full-service restaurants, today 33% of all orders were for takeout or delivery, nearly double pre-pandemic rates.

Image of new Taco Bell drive-thru only concept.
Taco Bell’s new test model of stores with drive-thru and pick-up windows only.

The new reality has been a wake-up call to big national restaurant chains. For example, Taco Bell is experimenting with a new model for its restaurants with four drive-through lanes fed by robotic order windows and only a walk-up window for pick-ups of pre-orders via a mobile app. Starbucks, who once welcomed remote workers to their stores as wi-fi homes for hanging out, now says that it will only 400 new locations with drive-through and pickup only. It says that 72% of its orders are now “to go”.

As a fast food or quick-service restaurant (QSR) the smart move all along was largely to offer drive-thru or pick-up services only. Especially with today’s challenge of hiring and paying higher wages to staff, the math no longer works for tending to clean public toilets, the liability of indoor kids’ playgrounds or retirees commanding multiple tables each morning over a two-hour coffee club.

The original Pal's Sudden Service location.
The modern Pal's Sudden Service location concept.
Pal’s original store remains as pick-up only while Pal’s current stores are drive-through-only stores.

Pal Barger, founder of a 31-unit burger chain in Tennessee and Virginia called Pal’s Sudden Service® got it right when he opened his first Pal’s in 1956. Swap the unprofitable effort of wiping down tables and emptying trash in bathrooms and focus on his speed of service and the quality of his food instead.

As Pal’s strategic marketing agency for more than 30 years, we have a unique insight into the logic of delighting their cult brand-loyal customers from a 1,200-square-foot restaurant. Wait times of less than 20 seconds. Order mistakes of less than one in 3,600 orders. Uniquely craveable menu items that can’t be duplicated. Employee training that empowers staff to be confident in their skills as a member of a highly efficient team that makes food and delights customers. A smiling one-on-one ordering experience instead of a squawk box. The result is an exceptional brand experience and lifelong customer brand loyalty.

“We’ve stayed true to what we are, which is trying to have a fantastic experience when you come to eat with us.”

Adam Crosby
Pal’s President and COO

Pal's Sudden Service Frenchie Fries Campaign.
Integrated campaigns drive the uniqueness of Pal’s regular and LTO menus.

Pal’s has given Creative Energy the opportunity to entice customers to their stores with our unique campaigns focused on delight. From differentiating their regular menu, like the salt used on their Frenchie Fries to a limited-time offer of a Cotton Candy Milkshake, that posted a new sales record and lifted all shake sales by more than 70 percent during the promotion. Another for the chain’s breakfast Tender Pork Loin Biscuit was a homage to the history of bluegrass within Pal’s service area that drove increases in social customer engagement by 93% and a net audience increase of 135%. 

Graphic showing the customer loyalty of Pal's Sudden Service compared to a national chain.
Pal’s cult brand loyalty outshines major national brands by a significant margin.

The Pal’s Sudden Service model has been in the spotlight since it became the first restaurant chain in America to earn the U.S. Department of Commerce’s Baldrige National Quality Award in 2001. It has been the focus of a case study and podcast by the Harvard Business Review to books, such as Billy Taylor’s Simply Brilliant.

Ultimately the real math for any retailer is based on dollars generated per square foot. Pal’s beats 99% of all QSR chains. Now, with higher real estate and construction prices, labor challenges, and food costs, QSR and other retailers are discovering something that Pal’s Sudden Service has known for 67 years… focus on serving customers delight instead of wiping down restaurant tables. If you are in search of an agency that “get’s” the new model for smaller store footprints with higher customer brand loyalty, we have three decades of experience in doing just that. Let’s talk.