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Are EV chargers right for your restaurant?

Jun 04, 2023Jun 04, 2023

There are a number of options that restaurant and franchise owners should consider, including charger type, cost and location.

More restaurants are installing electric vehicle charging stations in their parking lots to attract a growing cohort of drivers who own zero-emission vehicles.

Legacy QSR chains are leading the charge. Last year, Taco Bell franchisee Diversified Restaurant Group announced it would install EV chargers at 120 locations in California. In August, Starbucks installed EV chargers at a Utah store, and announced plans to open up to 15 locations with EV charging stations by the end of 2022. And, in February, Subway launched a pilot that will install small-format EV charging stations at select new or newly remodeled restaurants.

The recent embrace of EV chargers by restaurant owners comes amid the Biden administration's push to build out a national network of 500,000 public charging stations by 2030. The bipartisan infrastructure law passed in 2021 is providing an influx of federal money in support of that target. The White House is also eying public-private partnerships to achieve that goal, including collaborations with Starbucks, other restaurants and travel centers.

Chargers give consumers driving EVs another reason to choose restaurants that provide them, and allows businesses to stay ahead of the competition, Bill Bieser, vice president of OEM and automotive partnerships at GenZ EV Solutions, wrote in an email.

"If businesses don't offer EV charging, it can hurt them when everything is at scale because more people will have EVs that need charging and those businesses will be left behind," Bieser said. "It would be like having the only fast food chain that doesn't offer free refills on fountain drinks for dine-in customers. It will become an expected service in the future."

But there are a number of factors that restaurant or franchise owners should consider when deciding whether an EV charging station is right for their particular store.

The charger trend has been growing among fast food restaurants in convenient locations, such as real estate near interstates and main thoroughfares, since those are locations where people need charging, said Bieser.

But restaurants of all types are installing these stations because they are another service franchisees can offer to their customers, Sharmila Ravula, chief revenue officer at ChargeNet Stations, wrote in an email.

Restaurants are great locations for EV chargers because they are convenient, said Ravula. Restaurants provide existing parking lots that are frequented by customers who spend at least 15 minutes there — the amount of time needed for an ultra-fast charge, she said.

ChargeNet focuses on quick-service restaurants, which cater to a customer base that runs the demographic gamut, said Ravula. Tens of millions of Americans consume fast food on a given day and the market is still growing, she said. The company has spoken to a number of EV drivers who have reported eating at QSRs such as Taco Bell because of the availability of chargers, she said.

"We are attracting new customers to the restaurants by converting their parking lots into

destinations for EV charging," Ravula said. "We are seeing EV charging customers turn into restaurant customers."

While chargers could entice some consumers who need a power boost for EVs, said Bieser, they do not necessarily work at all locations.

Hypothetically, restaurants could lose business by installing chargers if it makes their parking lots too crowded, prompting potential customers to choose a different location, Bieser said.

Consumers, for example, could sit inside a Starbucks a little longer while their vehicle is being charged, taking up parking space and giving potential customers driving by the impression that they may not be able to find parking, Bieser said.

The type of EV charger restaurants typically install varies from business to business, said Ravula.

For ChargeNet, stand-alone restaurants are ideal locations for deploying DC Fast Chargers — which have higher voltage and take 20 minutes to an hour to provide a full charge — since they can work within the existing space without disrupting the parking lot or drive-thru operations, said Ravula. Level 2 chargers can take four to 10 hours to provide a full charge, according to the U.S. Department of Transportation.

A Taco Bell restaurant in San Francisco, for instance, offers six DC Fast ChargeNet Station charging units, giving customers a 100-mile charge in roughly 15 minutes for around $10, she said.

Various conditions determine whether a lot is an ideal location for a charger. For example, chargers near the entrance of a lot could come with a higher risk of accidents, since parked cars have a higher chance of getting hit when they are located where more vehicles are coming and going, said Bieser.

There are other hazards that restaurants should consider as well. When a family goes to a restaurant to charge their car, it could entice children to run around the parking lot in the pathway of moving vehicles, he said.

There are ways to improve safety in those situations, he said, citing Subway's Oasis charging parks that are "designed to get families a safe place to charge," Bieser said.

The type of charger — either DC fast chargers or the slower level 2 chargers — is a key in determining whether a charger could benefit a restaurant, said Bieser.

If a restaurant is located in an urban or suburban area, someone may be interested in staying longer while they work or socialize with friends or coworkers, he said. But if the customer is traveling cross-country, they may not be looking to stay beyond 20 to 40 minutes and may want the fastest charge possible.

Such customers are the "ideal consumer, because they will likely purchase something during a 20-40 min stay, but won't take up parking, seating, etc, while just waiting for a L2 to give them a good charge," Bieser said.

Still, Bieser believes restaurants purchase level 2 more often than DC fast chargers because they are less expensive to install and operate, while still giving the benefit of offering charging with little investment, he said. Level 2 chargers also typically do not require site upgrades to draw power to the site, and manufacturers have made them more readily available, he said.

"Long term this is probably not the best path because at the end of the day people will choose ‘speed’ of charging," said Bieser. "Why wait two hours for 50% charge when I can get 80% charge in 20-40 mins?"

The cost of installing a charger varies based on the location, energy demand and the type of business model, said Ravula. Restaurants can expect to spend $150,000 to $200,000 to install a single DC fast charging unit, she said.

Bieser estimated the cost of implementation ranges from below $20,000 to more than $1 million for some businesses — varying on the type and quality of charger that is being installed, the scope of site, and power upgrades needed, and other aesthetic considerations.

There are federal and state incentives available for the installation of most public chargers, Bieser said. In some cases, federal incentives could cover the cost of the entire charger installation. However, there are many standards that determine the amount of the rebate — for example, the site's hours of operation, if it includes a credit card reader, whether the charger's parts come from U.S.-based manufacturers, and which utility it receives power from, he said.

Energy costs also vary depending on the charger, according to Bieser. However, there are ways that restaurant owners can save on that front, such as a battery-buffered solution that stores energy at a lower rate, reducing operating expenses 30% to 40%, he said.

ChargeNet can also save restaurants up to 30% in their energy costs by storing solar energy that the restaurant can use to power their operation, said Ravula.

Funding for EV charging stations at Subway vary per location and partner, Mike Kappitt, chief operating and insights officer of Subway, said in an email. The company, he said, works with GenZ, uses internal research and insight and considers guest demand when determining what restaurants should offer Charging Oasis parks.

"As we roll out EV charging stations, we are looking to partner with innovative, forward-thinking franchisees who operate new or newly remodeled restaurants in select locations that make sense for EV charging stations," said Kappitt.