CHICAGO – Independent restaurants face significant obstacles in competition with major chains, and the tech gap looms particularly large.
Yum Brands, for instance, leverages an in-house data analytics team that can identify global flavor trends. Chipotle boasts an investment fund capitalized with at least $100 million dedicated to identifying and cultivating new restaurant tech solutions. And in late 2023, Wingstop ditched its partnership with Olo for a $50 million in-house proprietary tech stack.
Single restaurants, no matter how profitable, can’t match the scale and investment available to international brands. This is one factor making it more difficult for independent restaurants to adapt and compete with the bespoke tech stacks of major brands, said Kevin Bryla, CMO and head of customer experience at SpotOn.
Bryla estimated that a net of about 10,000 independent restaurants have closed nationwide in the last year, while major chains have continued to grow.
But, at the National Restaurant Association Show, proponents of further tech adoption say independents can leverage new technologies to at least narrow the gap with major players.
Using large language models for brand analysis
Small restaurant chains and independents can use agentic versions of Large Language Models, like ChatGPT, Claude and Google Gemini, to analyze their brand messaging and compare it to customer feedback, David Ciancio said during a panel discussion at the NRA Show. Ciancio is the co-founder and chief marketing officer at Handcraft Burgers and Brews & CMO at Salad House Franchising.
“There are tons and tons and tons and tons of insights in your Yelp reviews and your Google reviews and your TripAdvisor reviews, or where else they live, that can show you guest insights that can surface patterns and that you can use [to fill in] gaps in how to be better at what you do,” Ciancio said.
This approach works best for restaurants that have a sizable dataset of written reviews already because the LLMs can analyze these reviews and identify disparities between what guests say about a restaurant — beyond just complaints — and what a restaurant says about itself.
Operators can use this information to alter their messaging, or other aspects of their strategy, and bring their brand identity closer to consumers’ emotional associations with the restaurant, thereby making it more authentic, Ciancio said.
Kenneth Scharlatt, founder and executive director of food and beverage operations at Savage Orchid Hospitality, said during the same panel that this process can help prevent independent operators from making branding missteps.
“You may think one thing about your brand, and you may have built your brand on [it], but if your guests are coming in and that's not what they're seeing, there's a disconnect,” Scharlatt said. “We need to close that disconnect, or else you're not going to get those people back for multiple visits.”
Scharlatt and Ciancio presented the comparison of brand messaging and brand reception as a key part in a homespun AI strategy that can help independents close the gap with larger chains.
A more integrated approach
Bryla cautioned against assuming AI was a magic bullet capable of solving all of a restaurant’s problems.
“AI is not going to fix everything. People want a hospitality experience, they want and appreciate if technology behind the scenes is making a better guest experience,” Bryla said.
What makes independent restaurants unique is the personal connection between restaurateurs and their communities, Bryla said. Technological solutions should automate as much data analysis and presentation as possible so operators can continue to focus on the hospitality aspects of the restaurant business, Bryla said.
“It's the operator's creativity and mindfulness, understanding his or her local market, that's still, I think, the differentiator,” Bryla said.
Tech providers should be working to provide their restaurant partners with direct, actionable insights, rather than expecting that restaurateurs will turn to external tools to analyze the data manually, Bryla said.
“It's not like we're gonna say, ‘Here's AI, go ask it a question and figure it out’,” Bryla said. “I think a lot of operators take that point of view, or they put a pretty wrapper around a ChatGPT or something.”
The onus, Bryla said, should be on larger tech providers — SpotOn is a cloud-based restaurant management platform — to leverage their scale and technical expertise on behalf of smaller restaurants.
“The bigger companies also have more sophisticated technology, and systems, and tools, and we're trying to bring that to the independent operator,“ Bryla said.
