Early this year, Restaurant Brands International shifted its chief financial officer, Josh Kobza, into a newly created chief technology and development role and gave him one task: Improve the company’s lagging digital efforts.
In the process, CEO Daniel Schwartz declared that technology is “the most critical area of any consumer business today.”
The company has worked feverishly in the months since to add technology to all three of its concepts—Burger King, Tim Hortons and Popeyes Louisiana Kitchen— ranging from delivery and loyalty programs to remodels with kiosks.
One of the biggest efforts is a redesign of Burger King, which the company calls the “Burger King of Tomorrow,” that seeks to add technology both inside and outside the restaurant. That includes a double drive-thru with digital media boards and kiosks inside.
“The image is focused on building a digitally integrated experience for our guests,” Schwartz said on the company’s earnings call Wednesday.
“This is the next evolution of our image, and we have a pretty significant focus on technology,” he added later.
Operators will renovate their restaurants under the new image as required under the company’s franchise agreement, but some could get royalty breaks if they renovate their restaurants early.
The company is also testing kiosks at Tim Hortons, where the company is in the process of remodeling restaurants in Canada.
Delivery is another area of development at the company. It started testing delivery at both Popeyes and Burger King earlier this year, and the service is now available at 2,000 Burger King restaurants in North America and 5,000 of the chain’s 17,000 worldwide locations.
In addition, the company is testing a loyalty program at Tim Hortons. And the company recently introduced a mobile order and pay app at Burger King that is now usable at two-thirds of the chain’s U.S. locations. The app has been downloaded 2 million times.
“I think Joshua made a lot of progress in his new role,” Schwartz said. “And it really starts by building a really strong team. The folks we’ve been able to recruit have helped us increase the pace at which we’re moving.”
Technology has become a major front in restaurant industry competition and particularly in the fast-food space. That’s especially true in the U.S., a market that gave all three of RBI’s concepts fits over the summer. Same-store sales in the market declined for all three chains last quarter.
Burger King’s largest rival, McDonald’s, is aggressively remodeling the vast majority of its restaurants under its new “Experience of the Future” image that includes self-ordering kiosks. It also has delivery in many of its locations and has been pushing a smartphone app that features geo-locating technology and enables customers to have food brought out to their cars.
Wendy’s, meanwhile, is also working on both kiosks and delivery. Yum Brands, owner of Taco Bell, KFC and Pizza Hut, has an investment in Grubhub.
The companies are using technology to open themselves up to more consumers as they demand delivered food. Smartphone apps give chains more information about their customers. And kiosks are quickly gaining favor with operators who believe customers order more from them while making the restaurants more efficient.
RBI’s concepts had been lagging on many of these efforts. But the company now believes it is catching up.
“In just 10 months under Josh’s leadership, we’ve shown a sense of urgency that we brought to catching up on technology,” Schwartz said. “Hopefully having the right team will enable us to do a lot more in the years to come, because we’re just playing catch-up at this point.”
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