Introducing Fourth iQ, an AI-driven profit engine for Restaurants
By Today marks the release of Fourth iQ, our Artificial Intelligence for Restaurants. It harnesses the power of AI to maximize profits at every location in a restaurant chain. This is achieved in two overarching ways that work together – by providing AI-driven insights and actions for managers in-store, and by optimizing above-store processes and rules. Ultimately it drives better decision making, that in turn drives higher profits.
The development of Fourth iQ has been informed by countless conversations with our customers and learnings from 100s of deployments of our existing AI solutions, including AI forecasting for scheduling. We are acutely aware of the challenges operators contend with each day, while also being incredibly excited by the role AI will play in alleviating them.
In short – 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.
Empowering overburdened managers
Managers are critical to a well-run and profitable restaurant. Their hiring, scheduling, inventory, and compliance decisions significantly influence success. However, rising labor and food costs, coupled with a myriad competing demands on their time, put managers under increasing pressure to make the right decisions to maintain profit margins – and its overwhelming many of them. Half don’t expect to stay in their current role long-term.
This poses a problem for operators. An experienced manager, particularly one who has spent years at a venue, thoroughly understands the factors that impact local demand. They know which events or seasonal trends might drive footfall and can make informed decisions to ensure the restaurant is properly staffed and stocked. This institutional knowledge is invaluable for maintaining efficiency while maximizing customer experience. When that manager leaves, their knowledge typically leaves with them – creating a gap that might not be filled for years.
Estimates suggest it costs $15,000 to hire and train a new manager. It will take a year or more for them to gain enough insight into seasonal trends to make decisions with the same level of understanding as their predecessor. On top of gaining that institutional knowledge, new hires face the same challenges as every manager in the restaurant sector, namely maintaining profitability and compliance, while carving out enough time to develop their team and engage customers.
An AI companion that lightens the load
As common as the story of the overburdened manager might be in restaurants across the country, help is on hand. For 25 years, Fourth has delivered a suite of solutions fundamental to how restaurants run their operations, creating efficiencies for restaurant operators across the US. Now we can do more.
By utilizing AI to generate the ‘next best actions’ based on multiple data sources, Fourth iQ provides managers with real-time recommendations to profitably deploy labor, grow sales, and reduce waste. Mangers access Fourth iQ directly through Fourth’s suite of market-leading solutions, including HotSchedules, PeopleMatter, and MacromatiX. It helps them to make consistently good decisions and shortens the onboarding period for new hires, enabling them to operate at the same level as an experienced manager.
Fourth iQ acts as a constant companion that helps managers see what’s happening and take proactive steps. This is critical – as a manager who doesn’t realize they’ve overspent on labor until mid-week has little recourse to correct it. Similarly, Fourth iQ can predict that a local football match on Friday night will boost revenue by 20% – an impact the restaurant manager may be unaware of. It will then identify that the restaurant is understaffed for that night, inform the manager, and recommend adding staff to the schedule. If the manager agrees, Fourth iQ will automatically update the schedule to ensure staffing levels meet anticipated demand.
Ultimately, Fourth iQ help mangers make decisions that drive profit, while removing the burden of the manual tasks currently keeping them chained to their desks and away from the team and customers. The support and empowerment of the restaurant manager is a key aim of Fourth iQ.
An above-store AI profit engine
While managers have a significant impact on decisions made day-to-day in each location, there are of course many decisions made ‘above-store’ at the regional and corporate level that have a critical bearing on profitability, before trickling down to drive in-store actions. This includes defining labor rules, purchasing policies, and deployment of resources, to name but a few. Fourth iQ also plays a central role in shaping these above-store decisions.
Fourth iQ aims to create an AI-driven ‘profit engine’ at the heart of restaurant operations, providing intelligence across all locations in a restaurant chain. Firstly, by analyzing all available data, it gives corporate leaders a real-time view how each restaurant is performing and provides insights into where corrective action is needed. Secondly, Fourth iQ optimizes processes and generate recommendations to maximize profits across all locations. For example, instead of relying on a sub-optimal set of standard labor rules applied to all locations, irrespective of their characteristics (e.g. city v suburbs, drive-thru vs sit-down only), Fourth iQ can continually modify the rules applied to each restaurant to ensure they drive the highest sales at the least cost for that location.
AI that delivers tangible results, today.
It goes without saying that we are hugely excited about the potential of AI, particularly in the form of Fourth iQ, to transform the operations of restaurants to drive profits. A final key point to emphasize – AI is not some technology of the future that you can put off for another day. AI is the technology of today and Fourth’s customers are already on reaping the benefits – it’s fast becoming their competitive advantage. Noodles & Company achieved a $4 million reduction in labor costs, while Chili’s saved 600 labor hours per week nationwide, by using Fourth iQ’s AI-driven forecasting and scheduling.
These results demonstrate the transformative power of Fourth iQ, turning data into recommendations that drive operational efficiency, grow sales and deliver cost savings. The promise of AI is real, and in developing Fourth iQ we have made it possible for every restaurant to embrace AI today to create their own ‘profit engine’.