AI, AI, AI!

At a time when the AI boosters are selling their wares across every sector at top volume, flooding everyone everywhere with the fear of missing out (FOMO), and when it seems like the loudest voices opposing them are the equally hype-tastic AI Doomers, it can feel impossible to see a way through.
—The AI Con: How To Fight Big Tech’s Hype and Create the Future We Want, by Emily M. Bender and Alex Hanna

AI! AI! AI!

So much, so new, so fast, so hyped, and so much FOMO… what’s a franchisee to do?

In the coming months, we’ll be spotlighting multi-unit restaurant franchisees who are finding practical applications for AI in their business, including a look into ROI. A sampling of some of the many ways restaurant franchisees are deploying AI includes:

• Operational efficiencies, automation, & decision support
• Hyper-personalized customer service, engagement, & loyalty programs 
• Hiring & training
• Labor scheduling
• Inventory & supply chain management
• Predictive analytics (inventory, labor, and trend forecasting)
• Management & decision-making

Some background—how did we get here?

When ChatGPT launched on Nov. 30, 2022, most people couldn’t spell it, much less know how to use it for business. Accompanied by equal doses of promise and marketing hype, AI fairly burst on the scene: in the first 2 months following its release, ChatGPT reported more than 100 million users, making it the fastest-growing consumer software app… ever.

Coming up on 3 years later, ChatGPT and its AI competitors are better understood, but businesses are still trying it on for size. Some franchise brands eagerly leapt ahead while others sat back, watching and waiting. As the saying goes, pioneers/first movers get arrows in the back, while the next movers learn from those earlier experiences how to survive and grow.

Today, investors (also prey to FOMO) are pouring billions of dollars into AI companies, hoping one of their bets will pay off. AI vendors and businesses alike are rushing to catch this wave before it peaks and surf to profitability and success. The result is a rapidly growing number of companies pitching their wares to businesses: the number of AI companies worldwide is estimated at between 70,000 and 90,000, and growing.

[Quick story from the FOMO Department: Some years ago at one of our conferences, an exhibitor displayed a large banner with .ai appended to the company’s name. Surprised, I asked how they were using AI in their product. “We actually don’t,” the rep confided. “It’s just our name.” Let the buyer beware.]

So where to begin? 

“The AI space is currently very noisy, making it difficult to commit to a single tool and invest the time needed to master it effectively,” says Yunus Shahul. He and his brother own the Smartfoods Group, which operates 24 Cousins Maine Lobster units and 1 German Doner Kebab. “I prefer to wait until the AI ecosystem in marketing settles and then implement a solution that’s specifically suited to our food truck business model.” No arrows for these guys!

After the initial flush of enthusiastic predictions about how AI would solve everything from a faltering bottom line to dandruff, recent headlines—such as “Companies Face AI Buyer’s Remorse” (Aug. 29) and “Desperate Companies Now Hiring Humans to Fix What AI Botched” (Sept. 4)—are appearing more and more, and businesses are adjusting their expectations (and spending) accordingly.

The experience of Klarna, a Swedish fintech company, is instructive. In 2022, its CEO sought to reduce costs significantly by replacing 700 customer-service employees (about 10% of its workforce) with an AI chatbot. Arrows quickly ensued from customers complaining about how customer service had degraded. Oops. The company is now looking to bring back some humans, though on a remote/gig basis. Meanwhile, to bridge the gap, Klarna transferred engineers to customer service roles—not the optimal use of talent. “We went too far with AI,” said the 43-year-old CEO this past May.

Last week, Salesforce’s CEO announced the layoff of around 4,000 of the approximately 9,000 employees in its customer support division. Can’t wait to see how that works out. Stay tuned!

Rolling out and pulling back

In the franchising world, AI pioneers are bumping up against its limitations and adjusting their expectations of what AI can—and, perhaps more importantly, cannot—do for their brand and their franchisees.

• In June, McDonald’s announced it was ending its drive-thru automated order-taking pilot with IBM after 2 years and would remove the tech from the 100 or so restaurants that were testing it.
• In August, Taco Bell said it was reconsidering its voice-powered AI ordering system after rolling it out to more than 500 drive-thrus. (The WSJ story led with: “The most transformative technology in over a century may have finally found its limit: ordering tacos.”) Hmm…

Reasons for the pullback and reevaluation include problems with order accuracy; integrating the tech with existing systems; negative customer reactions that went viral (Headline, Aug. 29, 2025: “Taco Bell AI drive-thru rollout stalls after trolls order 18,000 water cups”); an inability to handle accents accurately; the need for human backup; and yes, resistance from franchisees.

So it goes with the introduction of any game-changing technology. When prompted with “AI works great, except for the humans,” here’s part of what Google Gemini delivered:

“It’s a really interesting statement because it gets at a fundamental truth about artificial intelligence. While we often focus on the technology itself—the algorithms, the data, the processing power—AI systems don’t exist in a vacuum. They are created by humans, trained on human-generated data, and ultimately deployed to interact with and serve humans.”

So says the machine. For more, we queried ChatGPT about which other brands have pulled back, canceled, or are otherwise reassessing their AI pilots: McDonald’s, Wing Zone/Capriotti’s, Chipotle, and Jamba. Reasons included the tech not delivering on expectations (accuracy, customer experience, ROI), or waiting for the tech to mature and become cost-effective. Unprompted, ChatGPT also delivered a list of “notable chains still committed to AI (for contrast)”: Taco Bell/Yum Brands, Wendy’s, and Domino’s.

This past June, Dine Brands (Applebee’s, IHOP, Fuzzy’s Taco Shop) announced plans to introduce AI-based tech to its more than 300 franchisees at their 3,500-plus locations. Goals include streamlining operations for franchisees, for both back-of-house and customer-facing functions. Plans include an AI-powered “personalization engine” that can help franchisees offer customized deals to diners, said Dine’s CIO Justin Skelton.

Into the rabbit hole

Diving deeper, we prompted ChatGPT, Perplexity, and Gemini with identical questions and compared the results. All delivered impressive responses at astonishing speed, saving a lot of legwork. Yet with all the “hallucinations” AI has displayed to date, verifying the answers remains a human endeavor. Here are three of the questions. (Try it yourself!)

1. How are multi-unit restaurant franchisees using AI?
2. What restaurant franchisors are helping their franchisees with AI?
3. How will operators of franchised multi-unit restaurants use AI in 2026?

In real life…

“I’ve seen a couple of good use cases for AI,” says Alex Karcher, operating principal at JCK Restaurants, with about 90 restaurants across five brands. “One example is AI agents that sit in virtual meetings and transcribe and summarize them. You can then retroactively look up, “Oh, what did so-and-so say in that meeting?” It’ll have the information ready for you.

“Additionally, I’ve started using ChatGPT’s voice conversations more. You can use it for sales role-playing. For a restaurant example, have Chat pretend to be a guest so that your team can nail their scripting. I also use it to brainstorm while I’m on the road. I recently used it while on a two-hour drive to refine our bonus model and to reflect on potential pitfalls the rollout might have.” (See his profile in the Q3 2025 issue of Multi-Unit Franchisee magazine.)

“We are using it for hiring, and we are testing it with drive-thru ordering at some of our locations. There are opportunities to start integration into our HR tools,” says Michael Kulp, CEO of KBP Brands, with more than 1,000 restaurants across four brands. (Cover story in the Q3 2025 issue of Multi-Unit Franchisee magazine.)

Acknowledging the limits of the technology in its current state makes for a smarter, more focused pilot program more likely to succeed—especially in the realm of predictive analytics, where companies make plans based on the tools’ output.

“While predictions are the heart of AI,” says Bappaditya Ray, Head of Analytics at Technomic, “this technology cannot improvise through uncertainty or admit when it needs help, so unsupervised modeled predictions can be inaccurate. This is why we highly value expert human input when we use AI to enhance our products.”

Yet, while AI most definitely is a game-changer (much as the Internet was in the mid-1990s), it’s still the same game for restaurant franchisees: choose a brand, find a site, hire staff, market to the community, and do their best to create a positive culture within their four walls. After all is said and done around AI, business is still about people. Those who succeed best will find ways to adopt this powerful, still-emerging technology and make it work for the humans it’s meant to serve.

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FRANCHISEE BYTES

What do you need from vendors?

Flexibility and to put their best bid forward first. We have vendor partners that we use exclusively because we have learned they are not going to overcharge us, and they will work with us to come up with the most mutually beneficial solution to any challenge.
—Alex Karcher is Operating Principal of JCK Restaurants, which operates 61 Carl’s Jr., 11 Jersey Mike’s, 8 The Human Bean, 8 Dave’s Hot Chicken, and 1 Hawaiian Bros. He’s been in franchising for 14 years.

Dunkin’ is unique in that the franchisees collectively own the supply chain, so we are lucky that we largely retain control over our primary vendor. We have sole suppliers for POS and technology, which has been a source of frustration. One disadvantage of being part of a large franchise system is that it becomes difficult to pivot to new and better technology as it emerges.
—Bryce Bares, Franchise Owner, QSR Services LLC, which operates 30 Dunkin’ and 1 Baskin-Robbins locations. He’s been in franchising for 13 years.

Consistency. We also want them to view our relationship as a partnership.
—Mike Kulp is CEO of KBP Brands, which operates 828 KFC, 119 Arby’s, 85 Sonic, and 56 Taco Bell locations. In 2016, he served as Chair of the Multi-Unit Franchising Conference. He’s been in franchising for 26 years.

I expect prompt responsiveness from our vendors, and fortunately, all of them have consistently delivered quick support whenever my team encounters issues or challenges. Their reliability has been essential to our smooth operations.
—Yunus Shahul, with his brother, Thameem, is owner of Smartfoods Group, which operates 24 Cousins Maine Lobster units and 1 German Doner Kebab. He’s been in franchising for 7 years.

Consistent delivery, prices, and quality of service.
—Carrie and Josh Ayers are the 2025 Veteran Entrepreneurship MVPs for outstanding performance, leadership, and innovation by military veterans. They operate 6 Playa Bowls and have been in franchising for 5 years.

To treat our teams as their guests. Build relationships of trust and great, speedy communication.
—Chad Given is Brand President of Sizzling Platter, which operates 361 Little Caesars, 107 Little Caesars Mexico, 185 Wingstop, 92 Jamba, 33 Jersey Mike’s Subs, 31 Dunkin’, 7 Sizzler, 5 Red Robin, and 1 Cinnabon. He is the 2025 Mega-Growth Leadership MVP for achieving excellence in growth and expansion. He’s been in franchising for 25 years.

Additional training and support for our staff.
—Chanel Grant, 34, is the 2025 Diversity, Equality, and Inclusion MVP for her demonstrated exceptional commitment to the promotion of diversity, equity, and inclusion in her organization. She is co-owner of Healthy Living Ventures, which operates 6 Tropical Smoothie Cafe, 3 Hand & Stone Massage and Facial Spa, and 1 Vio Med Spa. She has been involved in franchising for 10 years.

Consistency, timeliness in deliveries, and clear communication when something isn’t going the way we want it. We don’t like surprises because we cannot proactively plan for the solution, and it negatively affects the guest experience.
—Nick Crouch is Co-Winner of the 2025 Single-Brand Leadership MVP for achieving leadership with a single brand. He is Co-CEO of Dyne Hospitality Group, which operates 118 Tropical Smoothie Cafes. He’s been in franchising for 13 years.

Their commitment to providing us with high-quality products and timely deliveries via our back door so that our team can turn around and produce quality foods our guests expect.
—Phong Huynh is the 2025 American Dream MVP for achieving remarkable success in his new country. He is Co-Owner of Fuego Investments, which operates 30 El Pollo Loco restaurants. He’s been in franchising for 15 years.

Many of the partnerships are handled by the franchisor, but lowering the costs of goods would certainly help. Prices have continued to go up in recent years.
—Yousuf Nabi is Owner & CEO of Gotham IP Inc., which operates 10 Mrs. Fields, 10 Sbarro, and 4 TCBY locations. He’s been in franchising for 5 years.

Lower prices would be nice, but I’m sure they are also fighting to control costs.
—Jerome Johnson is a Franchisee at John Cove Management and Jbar Inc., which operates 10 Dunkin’, 4 Sonic Drive-In, 4 Baskin-Robbins, and 1 Jersey Mike’s. He’s been in franchising for 21 years.

To deliver our product to the high specification that our customers and brand expect.
—James Brajdic is co-winner of the 2025 Single-Brand Leadership MVP for achieving leadership with a single brand. He is president of Customer Maniacs and Green Bay A Dub, which operates 13 A&W restaurants. He’s been in franchising for 23 years.

Consistency, quality, and reliability. When vendors fall short, whether through missing items or invoicing errors, it pulls resources away from our priorities. I need partners who make our operations easier, not harder.
—Jacob Webb, Franchise Owner, MPUT Holdings LLC, which operates 22 Marco’s Pizza and 4 Tropical Smoothie Cafe locations. He’s been in franchising for 11 years.