Technology

IT gets a glow-up and 5 more takeaways from the FSTEC conference

Tech is becoming the most crucial department in the modern restaurant C-suite. But with great power comes great responsibility.
FSTEC conference
Dine Brands CIO Justin Skelton, right, is working with a bigger budget these days. | Photo by W. Scott Mitchell Photography

The annual FSTEC conference returned to Dallas last week, drawing thousands of operators and tech vendors to the Hilton Anatole hotel. 

The three-day event was both a demonstration of how far restaurants have come technologically since 2020, and a reminder of how far they have to go compared to other industries. 

“The restaurant business is [now] a technology-driven business,” said Hooters CIO Jeff Caplan during a panel Thursday. At the same time, he believes it’s just getting started: “I think we’re in the first inning of a 162-game season.” 

Here are six themes that arose from the event, which is owned and operated by Restaurant Business parent company Winsight.

IT gets ‘a seat at the table’

The CIO/CTO job is becoming an increasingly important role in the C-suite, largely because tech touches almost everything restaurants do these days.

Several executives noted that IT was once viewed as a cost center whose main job was to keep the lights on. When John Peyton left the hotel industry to become CEO of Dine Brands about 18 months ago, he was surprised to find that the IT department reported to finance. 

“I felt that we couldn’t successfully implement strategy without [CIO Justin Skelton] having a seat at the table,” Peyton said. He brought Skelton into the fold, and then told the CIO he didn’t think Dine was spending enough on tech.

“He kind of had me at hello in that conversation,” Skelton said.

Indeed, IT is far from being siloed these days. Tech leaders said they now interact with fellow department heads almost constantly and are in high demand around the office.

“I spend more time in our COO’s office than his carpet,” said Caplan.

“I don’t go into a board meeting without [CTO Carissa De Santis] next to me,” added Brix Holdings CEO Sherif Mityas, who is himself a former CTO.

Cyberthreats loom large

While the industry’s increasing digitization has broken down barriers in the C-suite, it has also exposed restaurants to a new threat: cyberattacks. 

The need for better cybersecurity was a frequent theme during the conference—one that was underscored by an ongoing cyberattack at MGM Resorts that reportedly shut down slot machines and disabled guests’ hotel key cards.

David Harris, CIO of Shake Shack, said that cybersecurity has not historically been a big area of focus for restaurants. But with the growth in things like online ordering, loyalty and digital payments, “it just opens up all of these ways of attack.”

Investments in cyber now top the list of Shake Shack’s tech priorities. “They have to come first,” he said.

“A cyber-centric approach is super important,” added Phil Crawford, CTO of CKE Restaurants. When the company is implementing new tech, “nothing ever gets through unless it’s blessed by the [cybersecurity] team.” 

‘The biggest loss no one talks about’

While restaurants are building up their digital defenses, they may also need to take a look at their security in the physical world.  

That’s because the growth in pickup and delivery has started to attract thieves to restaurant lobbies.

It’s now common for restaurants to leave food bags on shelves for customers or delivery drivers to pick up at their leisure. Stealing those bags can be as easy as walking in, grabbing one and leaving. 

The restaurant then has to not only remake the order, but also has to explain what happened to the waiting customer. Some have taken to keeping those bags behind the counter, but that creates an extra step for both customers and staff.

Theft is “the biggest loss in QSR that no one talks about,” said a representative from Apex, a maker of secure pickup lockers. Apex, of course, views its lockers as a solution. 

Build, buy or both?

Is it better to buy tech from a vendor or build it yourself? It depends, tech leaders said during the event.

Building certainly has its advantages. Denver-based Birdcall, for instance, built its tech stack from scratch and likes having the control to steer it according to its own needs.

“We’re our own client,” said CEO Marc Lohmann. “We can prioritize things according to operations.”

But that can also be a lot of work, said De Santis of Brix Holdings. In a former life, she said, her department built all of its consumer-facing tech, including its POS and mobile ordering system. “When trying to do all that yourself, you’re not going to be great at any one of them,” she said. Building will always be an option, she added, but not necessarily the right one.

Subway has done a little of both. In general, “we believe in buy over build,” said CTO Dave Blankenship. But it does have its own proprietary POS and menu system, which it can operate at the fraction of the cost of a third-party product.

“It’s fantastic,” he said. “We think of it as a strategic asset.”

Restaurants to vendors: Learn our brands

Operators at the conference said too many suppliers are pressing them to add tech without first understanding the nuances of their particular business or brand.

For instance, an executive from a large casual dining chain told RB that it recently ditched a test of an AI phone-answering system because the product was designed for pizza chains and did not translate well in a different segment.

“What I really love is when someone approaches me and they know my business,” agreed Denise Pedini, CMO of Newk’s Eatery. She expects prospective partners to come in knowing Newk’s tech stack and then explain what their product can do within that system.

Kiosks find their niche, and it’s a big one

Last year, in this very same post-FSTEC roundup, we wrote that “the jury is still out” on self-service ordering kiosks. 

This year, the sense was that any fast-food chain with convenience as a core value would probably be looking at kiosks if they aren’t already. 

Sandwich giant Subway has been testing them in Europe, and will bring them to North America later this year, Blankenship said. In one overseas market, the kiosks lifted check averages by 4%. Chains like Burger King and Shake Shack have also sung their praises recently.

However, kiosks will likely never become as ubiquitous in restaurants as they have in grocery stores. Brands that pride themselves on face-to-face interaction, such as Hooters and Jersey Mike’s, said at FSTEC that they don’t plan to add kiosks at most locations. 

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