August Franchise Discovery Newsletter: Read About Embracing AI in the Franchise Industry
- Ruth Terray
- Aug 5, 2024
- 3 min read
Updated: May 2
The Franchise Discovery – Vol. 5
In Vol. 5 of The Franchise Discovery, we spotlight the transformative influence of Artificial Intelligence (AI) in the franchising industry. With the emergence of accessible platforms like OpenAI's ChatGPT and Google’s Bard, AI has transitioned from a high-tech novelty to a fundamental aspect of our daily business and consumer experiences. This edition explores how AI is reshaping operational models, enhancing customer interactions, and setting new benchmarks for success in franchising.
The Onset of AI in Franchising
AI's journey in the world of franchising is marked by its unique ability to transform mundane tasks into opportunities for innovation. It’s not only about replacing manual processes; it's about enhancing human capabilities, understanding customer needs, and making decisions backed by data-driven insights. This transformative power of AI is not confined to large corporations—AI is equally accessible and beneficial to small and medium-sized enterprises.
Embracing AI: How Franchises Are Innovating for Impact
McDonald’s New AI Drive-Thru System: A Cost-Saving Robot?
McDonald's is leading the way in integrating AI into its drive-thru operations. The adoption of AI not only aims to enhance the customer ordering experience but also represents a significant shift in operational strategy. By replacing human order-takers with AI systems, McDonald's and other fast-food chains are eyeing major cost savings. With an average drive-thru wage of $15/hour, AI could yield substantial long-term savings—especially as these systems can operate continuously without breaks or benefits.
Canopy Lawn Care: Advancing Lawn Care with AI-Enabled Solutions
Canopy Lawn Care is a trailblazer in using AI to revolutionize lawn care. Leveraging aerial imagery, Canopy’s platform conducts precise property assessments, generates instant quotes, and automates customer engagement. Under CEO Hunt Davis, this tech-forward franchise marries AI with eco-conscious lawn care, elevating both service quality and customer satisfaction.
The Exercise Coach: Harnessing AI for Efficient Fitness
Since 2020, The Exercise Coach has grown by 125%, expanding in the U.S. and Japan. Their AI-powered fitness model includes:
Personalized Workouts: AI creates efficient, 20-minute workouts tailored to individual strength levels.
Exerbotics Equipment: Smart machines deliver adaptive resistance and real-time feedback.
Human Touch: AI supports—but doesn’t replace—coaches, maintaining a personal training experience.
Multi-Client Coaching: AI allows trainers to guide multiple clients simultaneously, improving time and resource efficiency.
This blend of AI and personalized service positions The Exercise Coach as a standout in the tech-enabled fitness franchise space.
AI in Franchising: A Mixed Reception
AI’s rollout across franchises has seen both praise and pushback. McDonald’s AI drive-thru systems have sparked viral customer moments—some amusing, some frustrating. Yet successes demonstrate the potential of AI, and many companies are working to refine these tools for accuracy and better customer experience.
The AI-Driven Future of Franchising
McDonald’s AI systems in certain Illinois locations have achieved accuracy rates in the low 80% range, falling short of the 95% target. Wendy’s, also testing AI in drive-thrus, reports slightly lower accuracy—highlighting room for growth.
The restaurant industry continues to wrestle with inflation, labor shortages, and high turnover. Many hires are first-time workers, and restaurants must raise wages to compete. For quick-service restaurants, back-of-house staffing remains a pressing challenge.
AI offers a compelling solution—not just for efficiency, but to offset labor gaps by automating hard-to-fill roles like order-taking.
As we reflect on the evolution of franchising, it's clear that AI is a game-changer. It enhances customer engagement through chatbots and personalization, improves operations, and addresses staffing shortages. Franchises like McDonald’s, Canopy, and The Exercise Coach show how AI is more than a trend—it’s a powerful, evolving tool shaping the future of business.
Read more and download the August Franchise Discovery newsletter.
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