Tech Check is a regular column on restaurant technology by Senior Editor Joe Guszkowski. It's also a newsletter.
The restaurant of the future is one of our industry’s pet discussion topics. What will it look like? What will it serve? Will there be robots?
I can’t say I have the answers to those questions. But one thing is becoming clear: The restaurant that defines the next chapter of dining will be part of a platform, not a single chain.
The word “platform” gets thrown around a lot. It’s elegant, self-contained and gives off a whiff of superiority: We’re not just a company, we’re a platform, and we’re looking down on you. But what does it actually mean? RB Executive Editor Lisa Jennings answered that question in her story this week about Focus Brands, the owner of Auntie Anne’s, Jamba and other chains, which has renamed itself GoTo Foods as it transforms into a platform business.
Previously, Focus was simply a catch-all name for a group of restaurant brands that essentially operated as individual companies. They had their own websites and apps, their own SKUs and their own ways of doing things. GoTo will integrate those siloed brands into one system, or platform.
It has become an increasingly popular way for restaurant companies to organize themselves. In addition to well-known conglomerates like Yum Brands and Darden Restaurants, there’s now Inspire Brands, GoTo Foods and the upstart Craveworthy Brands, as well as digital natives like C3 and Wonder.
These companies are all after roughly the same thing: economies of scale. The bigger you are, the more volume you can do, which gives you better leverage in negotiations with food distributors, tech suppliers, insurance companies, third-party delivery apps and landlords.
That said, it’s not just a desire to be big that is behind the proliferation of platform companies. Technology has been a distinct driving force. As online ordering, delivery, digital marketing and loyalty programs become an intrinsic part of running modern restaurants, companies are looking for ways to lower the cost of that technology and to get the most out of it.
Inspire, the owner of Dunkin', Arby's, Jimmy John's and more, was created in 2018 in large part to be able to invest in technology as the industry entered the digital era. And it has done just that, making strategic investments in order-integrator ItsACheckmate and acquiring delivery management company Vromo. Most stand-alone brands would have a harder time justifying those types of investments; Inspire can amortize it across tens of thousands of stores while reaping the benefits of its brands sharing the same technological DNA.
At an even more basic level, organizing brands on a platform allows them to learn from one another. For instance, Inspire's Buffalo Wild Wings added curbside pickup during the pandemic with an assist from sister concept Sonic Drive-In, where curbside is the de facto operating model.
As GoTo Foods CEO Jim Holthouser told Jennings, Focus's fragmented digital strategy wasn't that effective, in part because “all seven brands had to go out and figure out how to be digital experts.” Now they can pool their knowledge behind a single strategy.
To that end, one of GoTo's first orders of business will be a $60 million tech investment. That includes a new POS system that will be used by all of its brands, meaning GoTo will have a holistic view of its business and its customers.
That sort of hand-in-glove integration is huge. For GoTo, it will clear the path for a loyalty program that will eventually encompass the company’s entire portfolio—something the restaurant industry has yet to see at scale. “There is great power in that, and when that day comes, it will unlock incredible value,” Holthouser said.
He would know. Before joining Focus in 2020, he spent two decades at Hilton, which pioneered the sort of multibrand loyalty program that is now common in the hotel industry. Programs like Hilton HHonors and Marriott Bonvoy allow members to earn rewards at any brand in the companies’ portfolios, incentivizing them to stick with one group and providing the hotels with rich data on their preferences, down to what kind of pillow they like.
In a restaurant context, a multibrand loyalty program gives a customer reason to stay within the portfolio across multiple dining occasions. A GoTo Foods loyalist could hypothetically earn points at Cinnabon in the morning and redeem them at Schlotzky’s in the afternoon. Not only does that help GoTo grow sales, but it also yields all sorts of valuable data that can be used to fuel marketing, unit development and menu innovation. It's what smart people who use words like "platform" might call a flywheel effect.
For that scenario to work, companies like Inspire and GoTo will need to become as recognizable to consumers as Hilton and Marriott. That will be a challenge in an industry that is so defined by individual brands. Who's going to download the GoTo app when you just want a pretzel from Auntie Anne's? If a platform can solve that puzzle, it will set a new agenda for the future of restaurants.