Tags: , , , , , , ,

How Technology Is Making Restaurant Franchises Faster, Smarter, And More Efficient


Minyang Jiang

By Joe Tagliente

Evolutions in technology are having as much of an impact on the restaurant business today — particularly in the quick-service space — as drive-thrus did when they were introduced in the ’60s and ’70s.

Back then, drive-thrus were game-changing technology. I remember when we opened our first Burger King that had a drive-thru in 1978, we were amazed at how much sales we could collect through this little window in the side of the building. And now, drive-thrus account for somewhere north of 70% of sales in a typical quick-serve restaurant outlet.

The benefit of that is it enables a franchisee or corporate operator to continue servicing a high number of guests, but the physical footprint of what they need in order to do that becomes smaller[1], as do the fixed costs and capital expenditures associated with labor and restaurant development.

Apps Are the New Drive-Thrus

Now, if we fast forward to 2015, franchise restaurants and the quick-service industry are all about the app. You’re seeing companies like Panera Bread and Starbucks really pushing their apps as a way to serve customers more efficiently. So, if I wanted a Pick Two at Panera with a Fuji Apple Chicken Salad and a Bacon Turkey Bravo Sandwich, but I don’t want to wait in line, I can order it and pay through their app. The app tells you it’s going to be ready in 10 minutes, you go to the store, and there it is sitting on the shelf.

That creates a ton of convenience for the guest, and it creates the ability to effectively double the output of the restaurant’s kitchen at a particular time, because they have the captive audience who’s waiting in line in front of the cash register and the online/mobile audience that’s queued up waiting to purchase as well.

Unfortunately, we’re starting to discover that some of the kitchen facilities aren’t properly equipped or aren’t ergonomically designed to handle that increase in output. I expect that we’ll see a lot more focus on ergonomic studies, improvements to kitchen technologies, and faster ovens that can turn food out quicker in order to accommodate the demand. Because people want it now, they want it fast, they want it fresh and hot — they want it the way that they want it.

We’re also starting to see the use of apps and iPads just for customer engagement. I was in an airport recently, and there was a hamburger concept there with no cashier. They had a sign that said “Please step up and place your order here,” and then they had iPads with a custom-designed app that walked you through the order. You pick your hamburger, the type of bun you want, how you want it cooked, what sort of condiments that you want, and whether or not you wanted french fries or a drink. You could swipe your credit card or feed dollars into a dollar reader to pay, and then they ushered you over to the pick-up part of the line. So, there’s this intervention of technology happening now in quick-service, in initial customer engagement.

Fine-Tuning the Customer Experience

For the casual dining restaurants, this kind of technology accomplishes three things:

1) Speed. Restaurants are able to get the orders quicker and get the food out to the guests quicker, thereby getting them through the line faster or turning the tables faster in a casual sit-down dining franchise.

2) Accuracy. If guests can input exactly what they want on their own, they know that the accuracy of the order is going to be perfect. Miscommunication risks at the point of ordering are greatly mitigated.

3) Data. Smartphone apps and iPads are collecting massive amounts of data from customers, and the marketing minds at these various companies are smart enough to capture that data, analyze it, and utilize it in a way to strategically improve the guest experience and the foods they’re preparing for their guests. Some of the data are things like guest preferences, revenue trends depending on time of day, how effective suggestive selling and product offerings are and so forth. Customer surveys are also being conducted via apps, which reduces the amount of time it takes to cultivate that data and turn it into effective strategic change.

I envision that at some point in time, leading franchises and their various technology partners will be working very hard to create a customized experience for every guest that walks through their door — a “My Burger King” or “My Ruby Tuesday” sort of experience. Perhaps there’s an app on your phone, and when you walk into the restaurant there’s a geofencing mechanism that identifies you and says, “Hey, Joe’s here! And we know that Joe loves having a martini on Friday nights with three olives and he wants some fried calamari as soon as he sits down.” And as soon as I sit down at the table, the server brings over the Martini and the calamari comes out and my experience is already underway.

Technology and Employee Training

In the old days, we would train new hires and new employees by utilizing a manual, and maybe having some DVDs or training tapes where new hires could see how things were done. Then we would give them tests and so forth, and then we would put them in the trainer program where they were shadowing another employee.

If you’re operating a huge chain like a McDonald’s or Wendy’s and you wanted to distribute a new chapter in the Operations Manual, you’d say, “Let’s print this up and call Federal Express because we have to ship these out to 25,000 outlets.” It would take forever for the new training materials to get everywhere, and then to get each of the restaurants up to speed. Now with the Internet, WiFi, and iPads, you can hit a button and boom, it could be in everybody’s inbox and in their systems. And if they have a cloud-based Internet system where new information is always being shared and updated, all the fresh material could be distributed at the push of a button.

Technology also creates the ability to put interactive training programs into place. Right now, the dynamics of the menu are limited by what you can train people to make, and what they can memorize. There are obstacles to putting out a new sandwich every week. But I envision that at some point in time, there could be an iPad over every restaurant board — the counter in the kitchen where they prepare the sandwiches is called the board —  so that somebody can see, “Alright here’s the new sandwich that’s being featured this week and here is a quick video of how to manufacture it.”

The technology that’s coming out right now will reduce the training time down to a fraction of what it used to be. So, if it took 1-3 weeks to get someone very proficient on a particular position in a restaurant, that could be cut in half or less. Technology is doing tremendous things for training and improving efficiencies, and it will have massive impact on the industry going forward.

[1] The last Burger King that I built in 1999 was 4,500 square feet, on a two-acre piece of property in Epping, New Hampshire. It had a NASCAR theme, a playground, and a gorgeous fountain out front. If I were still building and operating Burger Kings today I wouldn’t go that route, because there’s no need for it. Instead, I’d buy a piece of land that was maybe a half-acre, the restaurant outlet would be 2,000-2,200 square feet, and it’d have 20-25 seats. It would have a super high output efficiency kitchen and I would be pushing as much sales as I possibly could through the drive-thru.