Fotomat was a chain of drive-up film developing kiosks. You would drop off your negatives, and pick up pictures the next day. They were eventually overtaken by one hour photo labs in the 1980s and went out of business. Some of the structures have been repurposed to sell coffee or other products, but most are gone.
Here is an undated photo of one. Maybe late 60s / early-mid 70s, from the cars?



I think it was the 2nd option: just the drop off and pick up point. The negatives were sent to a lab, then photos returned to the kiosk for you to pick up a day later.