The ILPA due-diligence questionnaire has no line item for a drive-thru moratorium, and its Process pillar should

ILPA grades fund managers on four pillars: People, Performance, Philosophy, and Process. The first three have hardened into real diligence over two decades, with reference calls that actually get made and track records torn down to attribution. Process, the pillar that asks how a manager actually sources and vets a deal, is where the rigor runs out. In QSR real estate the honest answer to the Process question is usually demographics, traffic counts, and a broker network, and two council votes less than a year apart show why that answer should now fail the questionnaire.

Spokane closed a corridor in one evening

On April 13, 2026, the Spokane City Council voted 5-2 to enact an emergency one-year moratorium on new drive-thrus, gas stations, car washes, and service stations along Division, Hamilton, Monroe, and the East Central/Sprague corridor. Emergency means it took effect the same day. Council President Betsy Wilkerson and Councilman Michael Cathcart cast the two no votes. Councilman Paul Dillon gave the majority's framing to the Spokesman-Review before the vote: "This isn't punishing existing businesses. Your Starbucks, they're grandfathered in."

Read that quote as an operator and the grandfathering is the sharp edge. Protection attaches to issued permits and to nothing else. One Chick-fil-A on the South Hill had its building permit issued days before the vote and walked through the closing door. An identical application one permit-review cycle slower now waits a year, minimum, with the council on record that the pause exists to align land use with the Division Rapid Transit line expected to launch in 2030.

The scope detail matters as much as the vote. The moratorium is corridor-specific rather than citywide, so a parcel one block off Division carries a materially different land-use posture than a parcel on Division itself, and the corridor map, not the headline, is the document an operator has to underwrite from.

None of this was a surprise to anyone reading the record. The Inlander documented the origin story back in 2024, when a contentious Chick-fil-A proposal in the Lincoln Heights neighborhood collided with drive-thru politics and was ultimately relocated. That fight left behind an organized coalition, and the 2026 ordinance was the coalition's second act. Two years of visible runway. The ordinance itself offered none.

Emergency ordinances do not send save-the-dates.

Carlsbad opened a door the same checklist would have missed

Process risk runs both directions, which is the part defensive checklists miss. On April 29, 2025, the Carlsbad City Council voted 3-2 to end a drive-thru ban that had stood citywide since 1997, replacing 27 years of flat prohibition with case-by-case conditional-use review. The Village and Barrio districts stay closed. Councilmember Teresa Acosta cast the named dissent. And the argument that carried the majority was fiscal: the city's own economic analysis found drive-thru restaurants generate roughly $30,000 per site per year in sales tax against roughly $22,000 for restaurants without one.

For an operator, that is a market locked for 27 years reopening with the pro-approval argument already written by city staff. It is also a thin market. A 3-2 margin means every future conditional-use permit lands in front of a council one seat away from re-flipping, so political outreach is not optional, and site-searching inside the Village or Barrio boundaries is wasted diligence spend on a prohibited use. A Process pillar that only screens for hostility would have missed the opening entirely. A Process pillar that reads council records would have had Carlsbad on a pipeline list in May 2025.

What the line item should actually say

The claim of this post is narrow. Jurisdiction-level entitlement risk belongs inside ILPA's Process pillar as a standing line item, because Process is exactly where it fits: a question about how the manager sources and vets deals, not about the manager's character or returns. We made the same argument for institutional data-center capital in the DDQ's moratorium blind spot. QSR just runs the loop faster, because QSR sites are numerous and exposed to exactly the corridor-level rules a council can change in one evening.

Written as diligence language, the line item has four parts. Does the manager track council calendars and pending land-use ordinances in every active market? Does it read transit and corridor plans as land-use documents, on the specific logic Spokane just demonstrated, that a bus-rapid-transit plan is a drive-thru ordinance waiting to be drafted? Does it maintain moratorium history and vote-margin data, so a 5-2 emergency vote or a 3-2 reopening arrives as context rather than news? And does its permit timing account for cutoff risk, given that grandfathering in Spokane came down to days?

A manager who answers all four with named jurisdictions has a Process pillar worth the word.

Most QSR underwriting I have seen prices site risk as if the rulebook were static and the only variables were demographic. Spokane says the rulebook moves overnight. Carlsbad says it also moves in your favor, if anyone is watching. My bet: at least one more city with a planned bus-rapid-transit line (the Spokane case file flags Seattle, Portland, Minneapolis, and Indianapolis as candidates with comparable dynamics) copies the corridor ordinance before the Division line opens in 2030, and the operators who saw it coming will be the ones whose diligence process included a council calendar. Ask your acquisitions team one question this week: who reads the agendas? If the answer is nobody, your Process pillar has a hole the width of a drive-thru lane.