Would You Like Tech with That? MUOs embrace new tools to gain an edge

Two decades ago, when Scott Scherer started his career at Jersey Mike’s Subs, franchisees rang up sales on Sharp cash registers and tracked customer loyalty with punch cards. In today’s brave new world, where chatbots take orders at restaurant drive-thrus and robots shuttle food, those methods from 20 years ago seem as ancient as abacuses and papyrus scrolls.

Technology has changed almost every aspect of the franchising world, from business operations and marketing to customer behaviors and expectations. Lately, the advances are coming at franchisees at such a fast and furious pace that it sometimes seems impossible to keep up. To stay competitive, franchise operators are deploying artificial intelligence, sophisticated apps, text automation, predictive analytics, and a host of other technologies aimed at improving efficiency and customer service.

At Jersey Mike’s, which has more than 2,500 locations, the Sharp cash registers and punch cards were tossed long ago. Those relics have been replaced with a proprietary POS system and a mobile app that allows customers to easily keep tabs on loyalty points and to decide how they want to receive the restaurant’s communications.

Tech advances also have made it possible for Jersey Mike’s franchisees to more fully understand who their customers are, what days and times their restaurants will be busiest, and how to better control operational costs. “We collect tremendous amounts of data. We collect it from our own sources, as well as external sources,” says Scherer, the company’s chief information officer. 

The information is used to help franchisees manage food and labor costs. The company also uses it in marketing. “We can anonymously follow a customer, let’s say, through a Facebook ad that they click on, from there all the way through and see that they created an account with us and made a purchase,” says Scherer. “We’re able to use data to effectively market the right stuff to the right people.”

Jersey Mike’s already uses systems to analyze and improve franchisee operations and staffing, but data is only going to get better with artificial intelligence technology, Scherer says.

“We’re looking into using AI to understand how many people are in the store, how many orders are pending, and then to help give customers better pickup times so they don’t get there and their food isn’t ready, but also we don’t make it too early and the food gets cold,” he says. “I think AI is going to be really good with things like that and labor scheduling, he says.

“We do have some pretty intensive labor software that does a good job of looking at historical data and trends, helping franchise operators build an efficient schedule so we’re not overstaffing or, more importantly to us, so we don’t understaff because we don’t want to give up customer service.”

That’s the bottom line for many franchisees. It’s not about just streamlining operations or addressing a labor shortage. It’s about providing a better customer experience. And companies are getting increasingly more innovative as they seek ways to do that.

Robots at work

Last year, Chipotle Mexican Grill began testing “Chippy,” an autonomous kitchen assistant from Miso Robotics that will make tortilla chips. At select Carl’s Jr. and Hardee’s locations, you’ll find “Tori” taking orders. Some Popeyes and Panera Bread restaurants began testing the proprietary voice-ordering platform last year. Developed by OpenCity, Tori is said to take orders with 99.9% accuracy.

In May, Wendy’s announced that it is testing an underground robot delivery system. The vision is this: Customers will drive into the restaurants’ parking lots, pull into designated parking spaces next to instant pickup portals and confirm their digital orders. Then, in a matter of seconds, the food will be swooshed from the restaurant’s kitchen to vehicles by robots using underground tunnels. If all goes well, the system, developed in partnership with Pipedream, a “hyperlogistics” company, should be operational at a Wendy’s location later this year.

That’s not the only tech update on the horizon for Wendy’s. Soon, AI chatbots could be taking orders at Wendy’s drive-thrus all over the country. The company worked with Google to tailor the technology, using Google Cloud’s generative AI and large language models (LLMs) technology. Plans called for a June debut of Wendy’s FreshAI at a location in Columbus, Ohio.

Investments in AI technology, such as automated voice-order systems, are steps in the right direction, says Wyatt Batchelor, managing partner of MBN Brands, which owns 150 QSR restaurants. (See Batchelor’s MVP profile in this issue.)

The technology will be prevalent in the years to come, he says. But far less flashy modernizations have already transformed the food industry and continue to do so. “Technology touches virtually every aspect of the QSR business, whether it’s the technology that’s directing back-of-house staff what to cook, or it’s your front-of-house systems, like your point of sale. It’s all very important,” says Batchelor.

Workforce management

Among today’s franchisees, it’s hard to overstate how embedded technology is in day-to-day operations. Take hiring, for example. The workforce management tool Harri has allowed Jersey Mike’s to revamp how it recruits and onboards employees. Job seekers can now go through much of the application process digitally.

“The days of seeing someone come in and fill out an application are over. The Millennials and the group of people we’re looking to hire really are engaged by the fact that you send a text message to a number and get a link to an application,” Scherer says.

“You fill it out and the system will schedule an interview. You go in and do the interview, and when you’re hired, you just go on to another link for all the paperwork. So all the onboarding paperwork is not done sitting at a desk with somebody with a pen and paper. The process of applying and being hired is all electronic and simple.”

The introduction of so much new tech makes this an exciting time, says Batchelor. The challenge, he says, is to identify what’s worth implementing, and when. “There are so many solutions for franchisees in the current market. The problem exists in selecting the proper resource that works, can be efficiently integrated, and is economical,” he says.

“It takes time, effort, and resources to onboard various types of services. Once you get them onboarded, there’s the process of training and incorporating the system into everyone’s routine.” Restaurant operators have to do their homework before making big decisions about tech, he says.

Customers in control

It’s not just the food industry that’s taking advantage of tech tools, nor is it just big franchises. Big Blue Swim School, which has 25 locations nationwide that teach children 12 and under, has developed proprietary technology that puts scheduling in the hands of its customers.

Through the company’s website or mobile app, parents can see all open time slots, allowing them to book the most convenient times, says Casey Morford, chief technology officer. If parents want to enroll more than one child in the school, it’s easy to plan simultaneous lessons. “That’s kind of a big deal. Anyone with multiple kids knows how challenging it is to get your kids all in at the same time,” he says.

Just as important: If scheduling conflicts arise, as they inevitably do, parents can cancel a lesson on their own and book a makeup session without having to involve a Big Blue employee. “We like to say that we want our customers to be able to cancel and reschedule a lesson in the time it takes you to sit at a stoplight—not that we want to encourage people to use their phones while driving. We just want it to be a quick and easy process where you don’t have to call someone,” Morford says. “We really just want to make things easy for families, especially families with kids who are constantly busy, constantly moving, and constantly on to the next thing.”

Franchise operators also like that parents can access real-time updates on the progress their children are making. The easier it is for parents to use Big Blue Swim School’s technology, the more franchisees benefit, Morford says. Another benefit: franchisees offer feedback on how in-house developed technology can be made better.

“None of us is as smart as all of us,” says Morford. “We get a lot of great feedback from our franchise operators in terms of feature enhancements and additions. We have a way for them to submit new feature requests as well as bugs that they find. Having a community to provide that feedback makes us all better and really just continues to advance us from where we were yesterday.”

Big Blue’s technology allows franchisees to access data that informs business operations, and the quality of that information will continue to get better as the tech advances. “We have an enormous amount of data around the behavior of our customers, the seasonality of the business, how our schedules look at certain points in the year. We’re investing heavily into data analytics and expanding our reporting capabilities, which will really benefit our franchise operators,” says Morford.

“For example, if we know the seasonality is trending upward, we want to make sure that they’re staffed appropriately. And conversely, when we have periods where there’s a downtrend, we don’t want to overstaff. Using this data, we can better inform our franchise operators so they can optimally manage their business.”

People always matter

However, while tech can do much to help franchisees, it’s not the most important factor in achieving success, says Christopher Klebba, president and CEO of Northern Diamond Management, which owns 40 Smoothie King, Buff City Soap, and Altitude Trampoline Park units.

No amount of analytics will overcome not having the right people, he says. No tech tool can make up for a business owner not being present. It’s clear to Klebba that franchise operators must lead by example, that they have to teach, and that they have to hold people, not technology, accountable. According to Klebba and the company’s mantra, “Vision can’t be taught, but it can be caught.”

“If you’re good at giving people life-changing skills, you’re going to win in any industry. That’s why we can go from smoothies to soap to restaurants to whatever, because it has nothing to do with the product,” he says. “It’s all about finding the right people, changing their lives, and then letting them go get the results. Systems and data and analytics can never overcome the leader really willing to get after it, be disciplined, and let that trickle to people relentlessly.”

In the end, franchisees need to know what their customers value, says Scherer, Jersey Mike’s CIO. “For a concept like ours, robotics does not really come into play that much,” he says. “There’s currently nothing that we want to do robotically. We slice all of our meats and cheeses fresh right in front of you. We cook your cheesesteak right in front of you as well. And that’s our brand, that’s our culture. I don’t think we want somebody to walk in and see a robot slicing their meat. They want to have that interaction. That’s why they’re there.”

Franchisees get to know their customers in a way tech tools like robots or AI chatbots never can (at least not yet). So while a customer’s food is being prepared at Jersey Mike’s, says Scherer, “They’re going to ask you how your kids did in the baseball game last week because they remember from the previous week that you were on your way to that baseball game. We like to share our lives with our customers. It’s our brand and our culture that make us better. It’s an experience rather than just a place to go pick up food.”