Restaurants are experiencing changes in how they plan, prep, operate, and engage with their customers. But what does that mean for your restaurant business?
Is artificial intelligence (AI) just for large QSRs, or will it level the playing field and help smaller, passion-driven food entrepreneurs survive?
Have we arrived in a future where robots flip burgers and automate back-of-house (BOH) food prep, or does it suggest your front-of-house (FOH) staff will consist of self-service kiosks and AI-driven phone systems?
Whether you’re an operator at a fast-food giant or a local mom-and-pop diner, AI tools are helping food businesses like yours optimize and innovate. From designing your restaurant’s logo, choosing the best table layouts, or managing inventory, AI offers solutions to streamline tasks and cut down on manual labor. With rising food costs and wages, investing in AI could be the key to balancing your expenses while boosting profitability in 2025.
“AI is transforming the technology landscape across industries, and the restaurant sector will be no different.
Christian Berthelsen, Fourth’s Chief Technology Officer.
In this article, we’re distilling all the headline talk to show you how technology can tackle fundamental challenges in your restaurant and how practical AI tools can help your business succeed.
A survey of over 5,500 restaurant professionals by R365 found that the biggest challenge for restaurateurs is keeping employees happy and staying on staff. Over 38% ranked it as their top concern, followed by sales volume (24%) and labor costs (18%).
These problems don’t require machines to replace your workforce—they require intentional software to improve your staff’s work/life balance while boosting their efficiency and productivity. But how can AI help you retain employees, sell more food, and lower costs?
Let’s explore the first set of tools to help restaurant owners, managers, and multi-chain operators solve the industry’s biggest problem.
Turnover rates reached an all-time high of 75%, making restaurant employee retention the biggest challenge for nearly every business size.
Operating on razor-thin margins means increasing hourly wages isn’t a viable retention strategy for most restaurant owners. However, there are alternative ways to make working at your restaurant a better lifestyle fit for the talent you hope to retain.
Let’s examine how restaurant scheduling software can facilitate staff shift management. Then, we’ll see how adding AI-powered tools can make this process even more efficient.
One often overlooked factor for improving retention is employee scheduling. Effective scheduling can seriously impact worker satisfaction and employee engagement.
Here’s an example from Heidi V., an event coordinator in the hospitality industry, who shared her experience with scheduling challenges on Capterra:
Before, we would have to wait for a photo of our schedules, and sometimes we would miss our shifts or get our shifts covered, which was so difficult. When HotSchedules came out, you never wondered when your shift was. You are reminded when you have a shift, and if you need a shift covered, you simply post it.
Heidi V, Source: Capterra
Heidi’s experience highlights the importance of transparent and accessible scheduling. The anxiety of missing a shift or the frustration of not being able to adjust her schedule made balancing her work-life calendar more difficult. As employees feel more in control of their time and less stressed about their work commitments, they are happier and deliver a better guest experience.
According to Lineup.ai, scheduling challenges are among the top five reasons restaurant employees leave their positions. That should be no surprise, given that nearly four in five restaurants are understaffed. Being short-staffed increases the workloads for front-of-house (FOH) employees, resulting in stress and potential burnout.
According to Sylvain Charlebois, Senior Director at the Agri-Food Analytics Lab at Dalhousie University.
“Employee burnout within the food service industry has become a big problem employers must figure out.”
You’ve probably seen it before: it’s Friday night, and only half the usual team is on. Servers scramble to cover tables, wait times drag, and drink refills fall behind. Customers leave frustrated, and the staff feels overwhelmed—everyone feels the strain of too few hands on deck.
The bottom line is that staff shortages—whether due to a lack of employees or poor scheduling practices—are a major factor in employee turnover. Proactive preparation is key with 77% of operators reporting insufficient staffing to meet customer demand. Implementing technology to forecast and schedule accurately shows your team that you’re committed to meeting demand without overburdening them.
Create a Connected Work EnvironmentHotSchedules provides a built-in messaging system that allows managers and employees to communicate directly within the platform. This enables quick information sharing, easy requests for shift coverage, and efficient team coordination, all without the need to exchange personal phone numbers. |
“When we transitioned to HotSchedules, it changed everything. HotSchedules’ messaging system is a quick and easy way to get the word out and get your shift covered fast.”— Brittney Hicks, Manager, Conway, AR |
Overstaffing can be as detrimental as understaffing, driving up labor costs, reducing efficiency, and discouraging FOH staff who rely on tips. When too many employees share the same customer base, individual tips decrease, making it harder for staff to earn a sustainable income.
This imbalance often leads to disengagement and lowered employee morale, contributing to higher turnover. A report by TouchBistro highlights that 34% of restaurant staff cite wages as a primary reason for leaving or considering leaving their jobs.
So, how do we balance labor effectively?
AI scheduling tools like HotSchedules can help by predicting exactly how many staff members you’ll need so you’re neither short-handed nor overstaffed. These tools make scheduling smarter by matching staffing levels to actual customer demand, saving on costs, and making things run more smoothly. For instance, Bone Daddies, a London-based restaurant group, achieved a 10% sales uplift by utilizing AI-powered scheduling solutions.
Accurate forecasting of customer demand, considering factors like historical sales data and upcoming events, helps managers schedule an appropriate number of staff for each shift.
Chili’s Grill & Bar, for example, improved its staffing efficiency by implementing Fourth IQ as its AI-driven forecasting tool. By using machine learning and analyzing historical sales data using algorithms to understand external factors, Chili’s achieved a 20% improvement in scheduling accuracy.
The advantage of implementing forecasting with employee scheduling tools like HotSchedules is that once you understand how many team members need to be staffed, you can easily help them communicate and swap shifts to accommodate their personal commitments, such as schooling or second jobs.
You’re creating a work environment that helps manage labor costs effectively and aligns staff work/life balance.
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22% Reduction in over-scheduling |
Thai Leisure’s Transition from Manual to Automated OperationsImplementing Fourth’s AI-driven scheduling solutions has led to a 22% reduction in over-scheduling, equating to over 56,000 hours saved in the 12 months following implementation. |
We’ve talked about reducing labor costs and the advantages of balancing staffing for retention, but scheduling also helps drive more sales. When you have the right people on staff, you need to know where and when to use them best.
We believe that by using AI to optimize both in-store and above-store decisions, restaurants can unlock a ‘profit engine’ that can power their future growth and success.
You can be fully prepared for high-demand situations with a reliable AI system to predict peak hours and tools to recommend optimal staffing levels. Imagine having just the right number of bar staff on game day, extra servers for a packed Sunday brunch, or a team ready on the busiest night of the year—Thanksgiving Eve—primed to surpass last year’s sales records.
But how do you make clear, actionable decisions to meet demand when unexpected factors come into play? Whether it’s a rained-out game or an early snowfall that disrupts plans, AI-driven forecasting empowers you to adjust staffing in real time so your restaurant is ready to handle whatever comes its way.
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25% More accurate forecasts |
“Since implementing Fourth’s AI Forecasting, we have seen a 25% accuracy improvement on the previous system forecast.”— Graham Fenwick (Productivity & Change Director, PizzaExpress) |
AI-powered self-ordering kiosks and chatbots are streamlining the ordering process while reducing human error. These systems can now handle more complex customer inquiries, take orders, and process payments at scale.
Leaders like ChowNow and Toast TakeOut provide branded mobile apps for restaurants, allowing customers to place orders ahead, customize meals, and make payments seamlessly.
Companies like Ziosk offer tabletop tablets that enable guests to browse menus, place orders, and make payments without server assistance. While attentive servers can upsell items like drinks and desserts, providing the instant gratification of this self-service option enhances the dining experience by giving customers control over ordering and reducing wait times.
Modern restaurants are also embracing AI-powered solutions to improve voice ordering.
“When calls go unanswered or are mishandled, customers feel ignored, undervalued, and frustrated. This dissatisfaction can result in lost sales, negative word-of-mouth, and a tarnished reputation.”
– Richard Titus
Kea.ai stands out as a leading solution in the market for phone order automation. Its voice AI system leverages Automated Speech Recognition and Natural Language Understanding to process orders seamlessly while integrating with existing Point-of-Sale (POS) systems.
With ChatGPT’s Whisper API available for companies to build on, more and more POS systems are integrating this voice assistant technology to enhance their offerings. One of the significant advantages of this new technology is the ability to transcribe customer experiences and build out customer data using more than just online orders. Each customer interaction can be used to grow your database and understand customer behavior, helping you discover what customers are asking about for marketing campaigns, social media, or simply to improve their ordering experience.
Drive-thru systems powered by AI can now understand different accents and dialects, accurately process orders, and suggest personalized upsell items. McDonald’s and other chains have implemented AI voice technology that has reduced wait times and improved order accuracy.
McDonald’s isn’t the only fast-food chain exploring AI technology for voice-assisted ordering:
In partnership with Google Cloud, Wendy’s is testing an AI chatbot for drive-thru orders to improve speed and accuracy.
Collaborating with SoundHound, White Castle is implementing AI-powered voice bots in 100 drive-thru lanes by the end of 2024 to streamline ordering processes.
Carl’s Jr. and Hardee’s have employed an AI drive-thru chatbot that relies on remote human workers in the Philippines for most interactions, aiming to enhance customer service.
Managing labor costs in the hospitality industry goes beyond simply reducing staff; it’s about aligning labor expenses with sales to maximize both profitability and customer satisfaction. Fourth’s predictive analytics for demand empowers managers to forecast staffing needs accurately and ensure the right team is in place to meet demand efficiently. Fourth’s platform enables informed staffing decisions that balance labor costs with service quality by analyzing historical sales data and incorporating external factors like weather.
“At one of our beachfront locations, we’ve cut labor costs by $9,000-10,000 a month because we built schedule templates based on forecasted demand.”
— David Culhane, Operations Director, Sun Pubs
Labor costs should be viewed in relation to sales, as they have a direct impact on revenue generation. For example, if a restaurant is understaffed, employees may struggle to deliver timely service, missing opportunities to upsell items like drinks, desserts, or coffee. This not only reduces immediate sales but can also harm customer satisfaction and future business.
“Labour is a big cost in our business. Probably the biggest cost. It is essential we show a return on the business. I have been using the solution to show our owners that these are the tools we are using to improve awareness; to improve flexibility; to be more productive and drive productivity.”
— Mathias Cocuron, Regional Director of Finance, The Four Seasons Hotel
Labor expenses represent a substantial portion of a restaurant’s operating costs, typically accounting for 25% to 35% of total sales. Effectively managing these costs is essential for sustaining profitability and operational efficiency.
To determine the labor cost percentage, use the formula:
Labor Cost Percentage = (Total Labor Costs / Total Sales) x 100
Where:
Example Calculation:
If a restaurant’s total labor costs amount to $300,000 and total sales reach $1,000,000, the labor cost percentage would be:
Labor Cost Percentage = (300,000 / 1,000,000) x 100 = 30%
This means 30% of the restaurant’s revenue covers labor costs.
“We have markets that have upwards of 2 whole percentage points in labor savings because operators understood completely and bought into the HotSchedules system”
— Candice Barnett, Senior Director of Off-Premises Dining Operations, P.F. Chang’s.
Hiring and onboarding new staff is critical to keeping a restaurant running smoothly. PeopleMatter, powered by Fourth, uses AI to streamline operations by automatically screening and matching candidates, whether you’re a small restaurant owner or a large chain hiring hundreds.
One restaurant operations manager explained: “We have 80,000 active employees, and our turnover is over 100%. Those are big numbers and a lot of volume, especially on the applicant side, on the applicant tracking side we need to be able to move through that really quickly.” — Manager, Texas Roadhouse.
With mobile-friendly features like “text to apply,” PeopleMatter makes it easy for managers to hire quickly, so they can focus on the business.
Integration with Restaurant Payroll Systems
PeopleMatter also connects with the restaurant technology you’re already using—including:
By linking these systems together, PeopleMatter reduces manual work and minimizes mistakes, helping your restaurant operate more efficiently.
According to restaurantkitchen.org, approximately 38% of food available for consumption in the United States goes unsold or uneaten, leading to significant financial losses for restaurants and food-based businesses. Globally, food waste results in an estimated annual loss of $2.6 trillion.
| Cause of Food Waste | AI-Driven Solution | Software Solutions |
| Overproduction | AI analyzes historical sales data and external factors to forecast demand accurately and align production with actual needs accurately. | – Macromatix: Uses AI-powered forecasting to optimize procurement and reduce waste. |
| Spoilage | AI monitors inventory in real-time, alerting staff to items nearing expiration and suggesting optimal reorder times, reducing spoilage. | – BlueCart: Offers inventory management with spoilage tracking. |
| Inaccurate Demand Forecasting | AI predicts customer demand by analyzing historical data and external factors, allowing for better staff scheduling and inventory management. | – Fourth iQ’s Advanced Analytics: Delivers AI-driven demand forecasting for precise planning. |
| Portion Sizes | AI analyzes consumption patterns to recommend appropriate portions, balancing customer satisfaction with waste reduction. | – Fourth’s Recipe & Menu Engineering: Assists in recipe costing and portion control. |
A survey by Lightspeed revealed that 42% of restaurants utilize inventory technology to minimize waste, with 51% of these eateries focusing on improving food costs. Considering that food waste can account for 4% to 10% of purchased food, this significantly impacts profitability. Investments in waste reduction can yield a 7:1 benefit-cost ratio, meaning every dollar spent can return up to six dollars.
MacromatiX by Fourth
MacromatiX, developed by Fourth, is an AI-powered inventory management solution tailored for quick-service restaurants (QSRs). Key features include:
Other AI-Powered Inventory Management Solutions
While MacromatiX offers a QSR solution, several other AI-driven tools are available.
WISK.ai, for example, specializes in bar inventory management. It offers real-time tracking, automated ordering, and recipe costing to optimize stock levels and reduce waste.
Managing table turnover is crucial for restaurant success, particularly in smaller spaces. Here are some AI-powered reservation and table management tools that help restaurants optimize reservations, maximize seating capacity, and streamline waitlists:
Integrating generative AI into your restaurant’s operations is fun and can save you money otherwise spent on expensive branding agencies. Here are some AI tools designed to assist with marketing content, design ideas, and menu suggestions:
These AI tools can streamline your creative processes, allowing you to focus more on delivering exceptional dining experiences.
Creating a distinctive logo is essential for establishing your restaurant’s brand identity. Here are some AI-powered tools that can help you design a professional logo:
There are many types of AI software available for restaurants in 2025. AI solutions are transforming the industry from scheduling and labor optimization to sales forecasting, table management, and food waste reduction. Fourth iQ offers a complete start for restaurants looking to embrace AI-driven efficiency. Designed to simplify operations and maximize profitability, Fourth iQ provides the essential tools for restaurant chains to optimize labor costs, enhance customer experiences, and increase revenue—all in one accessible platform.
“In creating Fourth iQ, we are providing every restaurant chain the simplest and most effective way to get started on their AI journey,”
— Christian Berthelsen, Fourth’s Chief Technology Officer.
Already trusted by 30,000 restaurants worldwide and used by 14 of the top 20 restaurant chains, Fourth drives profitability and sets the standard for smart restaurant operations.
Save time, reduce costs, and increase profitability with Fourth’s intelligent solutions.
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