Earlier this year, the eight-unit juice chain Keva gave all of its software providers an ultimatum: Lower our monthly rate, or we’re going to use AI to replace you.
About half of the chain’s vendors agreed. The rest “told us to screw off,” said CEO Gary Thomas.
So Keva cut ties with the apps that wouldn’t negotiate — about five in all — and began building its own with the help of an AI coding tool from Anthropic’s Claude. It developed a program called UseFroot, which stands for Framework of Routine Operations and Operating Tasks. It includes onboarding and training tools, daily checklists, an inventory management and forecasting system, and communications tools for staff.
Thomas expects UseFroot to save the company $30,000 annually on software subscription fees alone. He also plans to make it available to other restaurants.
“The past year has absolutely been incredible and fascinating,” he said of his education in vibe coding, or the process of developing software by chatting with an AI bot rather than manually writing code.
Keva is one of a number of restaurants using AI to build software that they say is more affordable and as good as or better than what they could buy off the shelf. Adoptees range from mom-and-pops to small regional chains to global brands like Starbucks.
Last month, Bloomberg reported that the coffee giant plans to bring some of its software development in-house, using AI to replace products from mainstream vendors like IBM and Microsoft. According to the report, which cited a leaked internal presentation, Starbucks expects the moves to save it $40 million on technology this year.
The news caused IBM and Microsoft stocks to dip the following day, though they have since bounced back. Starbucks did not respond to a request for comment.
Decisions like these have stoked fears of a “SaaSpocalypse” — the idea that AI coding tools and agents will disrupt traditional software-as-a-service (SaaS) companies. SaaSpocalypse anxiety spiked on Wall Street early this year after Anthropic released new coding tools in Claude. But tech stocks have rallied in recent months, prompting a number of industry players and pundits to declare the SaaSpocalypse dead. Software companies, they argue, can benefit from AI too.
Restaurant vibe coders like Thomas might beg to differ.
“If a lowly restaurant operator like myself can build his own apps, you’ve got ... millions of people doing the same thing,” he said. “In my opinion, in the next five years, it's going to send shockwaves through the software industry.”
“If you can offer a service for $20 to $50 a month that does what five to 10 other apps do, that’s a game-changer.” —Gary Thomas, Keva
Vibe coding is a fairly recent phenomenon. According to Google Search trends, the phrase did not exist until early last year, right around the time Anthropic launched Claude Code. But it has taken off quickly thanks to the accessibility of AI coding tools. Y Combinator, the big Silicon Valley startup incubator, said last year that a quarter of the startups in its winter class relied heavily on vibe coding.
By mid-last year, Thomas was playing around with a number of AI coding apps such as Replit and Manus, having talked with fellow operators about the potential of using them to create homemade apps. He began to get serious about the idea when Claude launched an interface that could link to Keva’s POS system.
“That was when we said, ‘OK, we’re gonna go for this,’” he said.
Thomas has limited coding experience but said that has not been a barrier while developing UseFroot. If he gets confused, he just asks Claude Code to explain what it’s doing as if he’s a 5th grader.
“It’ll educate you on what the next step should be,” he said.
The same goes for when the apps inevitably break, as apps do. Thomas said when that happens, he can simply ask Claude to find the problem within the code and fix it.
Thomas spends $100 a month on Claude, which he says gives him more than enough credits to accomplish what he needs to do. In addition to building apps, Keva also uses the chatbot as a sort of virtual consultant to help with things like marketing, human resources management, and website analysis.
UseFroot does not currently cost the company anything to run because the database it uses exists on a single, free platform. If Keva ends up selling the program to other restaurants, though, it would have to invest in server space. So far, it has given UseFroot to two other restaurants for free and is using their feedback to improve the product.
Though he is CEO, Thomas said he leaves most of the day-to-day operations of Keva to his son and daughter-in-law, which gives him time to pursue larger projects like UseFroot.
“The thing I’m most passionate about is how incredibly inexpensive it is to offer it to other restaurants,” Thomas said. “If you can offer a service for $20 to $50 a month that does what five to 10 other apps do, that’s a game-changer.”
“Some things that were really close to being done on your own are probably easier to do on your own now. But it's not gonna be everything.” —Sterling Douglass, Chowly
Restaurant tech companies, for their part, acknowledge the value that vibe coding can have for operators, but they aren’t convinced it is going to totally upend the software business.
“I think it represents a fairly fundamental change to how restaurants are and should think about tech,” said Sterling Douglass, co-founder and CEO of restaurant tech supplier Chowly. “I don't think that it's inherently good or bad.”
He compared AI to the rise of computers in the ’90s and the internet in the 2000s. Each of those revolutions have had significant impacts on restaurants. Some were quick to embrace them, while others were slower on the uptake. Some went on to build their own technology, though many still rely on vendors to supply and support their tech stacks.
He believes AI will follow a similar pattern, while changing the calculus slightly for operators. In the long-running debate over whether restaurants should buy their tech or build it themselves, AI does tip the scales toward build, Douglass said. But tech companies still offer a level of expertise and efficiency that it will be difficult for restaurants to replicate.
“I think it's the same pros and cons you always had,” he said. “Some things that were really close to being done on your own are probably easier to do on your own now. … But it's not gonna be everything.”
He said Chowly has not had any clients cancel in favor of a vibe-coded alternative.
Stephen Sheldon, research analyst with William Blair, said that tech providers that are deeply ingrained in a restaurant’s end-to-end workflow are probably safe from AI disruption, while those that handle individual tasks could be more exposed.
“The depth and breadth of [the product] matters,” he said. “If you're a one-off point solution handling onboarding, you're probably at risk. If you're a one-off solution handling loyalty, it might be a tough environment.”
He also pointed out that, while companies like Starbucks look to insource some of their tech development, others are going in the opposite direction. Marriott, which has historically built a lot of its own tech, recently signed a long-term contract with Agilysis to provide its property management software, for instance.
“Marriott could be trying to continue their own ‘build’ decision, and instead, they're shifting to best of breed, third-party software,” Sheldon said. “They’ve been very clear that they view it as integral to their innovation over the next 10 years.”
Of course, building and buying have never been mutually exclusive. And with the addition of AI into the mix, some end-to-end restaurant tech vendors are even encouraging restaurants to build their own apps on top of their platforms. Kelly Esten, CMO of Toast, said most of the company’s enterprise customers are using large language models like ChatGPT or Claude to interact with their data in Toast.
“That's great. We think they should,” she said in an interview at the National Restaurant Association Show in May. At the same time, she said, working with a large, established tech company still has a lot of value for restaurants.
“What we bring above and beyond the homegrown stuff is the ability to invest hundreds of millions of dollars a year in R&D,” she said. “We've got teams of engineers focused on things like uptime, security, performance, integration with the hardware. There's a lot that goes into that payment processing and that full security chain.”
Toast, a large POS provider for independent restaurants, has remained strong in the face of SaaSpocalypse chatter. Its annualized recurring run rate increased 25%, to $2.4 billion, last quarter, and it added a record 9,500 net new locations. Its AI-powered marketing agent, Toast IQ Grow, also became the fastest-growing new product the company has ever launched.
Indeed, as some SaaSpocalypse deniers have noted, AI could be a tailwind for software companies if they play their cards right.
Chowly, for instance, has evolved in recent years from an order aggregation system to an AI-powered platform that is designed to help restaurants optimize their online business. It now offers a set of AI agents that can do things like automatically update a restaurant’s website to make it show up higher in Google search results.
The pivot has paid off for the company. The platform product reached $1 million in annual recurring revenue in just six weeks, a benchmark it took Chowly three years to reach with its original business model.
“There's no way in hell we would have been able to do that without having AI built into the product,” Douglass said.
Thomas’ reaction to new AI tools like these? Restaurants can use AI to build them in-house, and for a lot less than vendors will charge.
“If you’re a software developer and you’re charging a premium, it would be a really scary time if they’re not listening to their clients,” he said.