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RESTAURANT STRATEGY
The Future of AI and Restaurant Robotics
00:49:09
#557 - The Future of AI and Restaurant Robotics ***** The Restaurant Opening Bootcamp will save you tens of thousands of dollars in costly mistakes. Run by restaurant coach, Chris Hughes, this 12-week program will teach you everything you need to know about opening a restaurant. LEARN MORE: https://www.restaurantstrategypodcast.com/restaurant-opening-bootcamp-inqury-form ***** This week's episode is brought to you by: MARGIN EDGEVISIT: https://www.marginedge.com/lp/chip ***** Anyone who attended the NRA Show a few weeks back knows that AI and Robotics are all anyone can talk about. Today's guest, Rich Hull, certainly knows a thing or two about the subject. MISO ROBOTICS: https://www.misorobotics.com/RICH HULL LINKEDIN: https://www.linkedin.com/in/richardhull/ ***** If you want to snag a copy of Chip's book, The Restaurant Marketing Mindset... CLICK HERE: https://www.therestaurantmarketingmindset.com/ If you're ready to learn more about the P3 Mastermind... CLICK HERE: https://w...
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- [00:01]
A
So certainly the name of the game
- [00:02]
B
over the last five or six years has been talking about technology, about all the new software that's come out, about how people are condensing all under one roof, that that all in one solution you're looking for. If you've been to a trade show anytime in the last 12 months, we're talking a lot more about AI. But what I'm hearing a lot about now, and certainly if you were at the National Restaurant association show just a couple of weeks back, you know, the talk was all about robotics. How can we leverage AI and robotics to make kitchen more efficient and really safer? That's what we're going to talk about on today's show. Can't wait to bring you this conversation.
- [00:39]
A
Don't go anywhere. There's an old saying that goes something like this. You'll only find three kinds of people in the world. Those who see, those who will never see, and those who can see when shown. This is Restaurant Strategy, a podcast with answers for anyone who's looking.
- [01:12]
B
Hey everyone, thanks for tuning in. My name is Chip Close. I am your host here of the Restaurant Strategy podcast. In addition to putting out two new episodes every week, I run the P3 Mastermind. I write books, I give talks. There's so much that we do to help this industry. But guess what? We've put together and we are getting ready to launch a 12 week restaurant opening boot camp. It's entirely virtual. We are capping this at 20 people. So if you are getting ready to open a restaurant anytime in the next 24 months, whether this is your first restaurant or your 10th restaurant, this is something that I want to chat with you about. It's 12 two hour sessions every Thursday starting on July 9th. So 12 Thursdays in a row, two hours. This will save you tens of thousands of dollars or hundreds of thousands of dollars in mistakes that we, many owners and operators make. The best way to get started to see if you're a good fit is to go to restaurantstrategypodcast.com opening boot camp. There you can review all of the details about this boot camp. You can inquire there. So your name, email, phone number, tell us a little bit about the property you're getting ready to open. We only have 20 slots and we want to make sure these are going to the people who are really going to get the most out of this program. If it goes well, it's not going to be the last time we run it, but this is the first and we are capping it at 20restaurantstrategypodcast.com Opening Bootcamp. As always, you can also find that link in the show notes. Now, do you know what the cost is on your third best selling entree? With Margin Edge, you could know that food cost percentage instantly. See, Margin Edge is a complete restaurant management software that I recommend to all of the P3 members, anyone looking to improve their profitability. With Margin Edge, you just snap pictures of your invoices as they come in and you get real time data for every area of your business. You can see plate costs in real time. You get a daily P and L, your inventory count sheets are automatically updated. I'm telling you, it saves you a ton of time and it lets you make really informed decisions. I have a client, Gather Brewing. They're down outside of San Antonio. They just opened a second location in Boise. They started using Margin Edge at their first location and within 30 days their food costs went from 38% to 28%. I don't have to tell you what that means for the profitability of the restaurant. There's a reason I recommend this software. Margin Edge is perfect for so many of you out there. I recommend it because I know it works. If you're interested in learning more or if you want to see how Gather brewing went from 38% to 28% food costs, head over to margin edge.com chip. You watch a really cool video that they shot down at the brewery. Again, Marginedge.com chip and yes, that link is in the show notes.
- [04:01]
A
So my guest on today's show is a gentleman named Rich Hull. Rich is the CEO of MISO Robotics. Robotics AI Obviously it's all over the news. I think it is the frontier for most businesses, certainly the world at large. And I do think it's going to be a big part of our future over the next decade in restaurants. So I'm excited to have this conversation. Rich, welcome to the show.
- [04:23]
C
Thanks, Chip. Great to be here.
- [04:24]
A
Rich, let's start off by talking about who you are, your background, and talk a little bit about what Miso is, what they do, what you're trying to accomplish. Because I think your background is really interesting and I think the people listening will enjoy sort of the winding road that you took to get to where you're at now.
- [04:43]
C
Definitely had a weird path to get into the restaurant innovation space, that's for sure. So I Miso has been around for about 10 years. It was started by some guys right out of Caltech who didn't really want to get a real job and had worked in restaurants and thought, this is going to modernize, and we want to be at the leading edge of that. In some respects, they may have even been a step too early, but they were largely visionary for what was going to happen in restaurants. They started creating robots and what we now know as AI and trying to fumble their way around the early experimental days of restaurant innovation. And then I was brought in about two and a half years ago by my partners at Ecolab. So Ecolab owns a small piece of miso, and they made it an investment in early 2023. And they brought me in because founding a company is such a different skill set than really growing a company, and you almost need to have done it before. And so they asked me to come in. I thought it was a really fascinating opportunity because I knew that my next thing, whatever it would be, would be in AI. And I love, you know, my career has been defined by anything. It's sort of been always at the leading edge of something, kind of trying to read a market and build businesses that, like, sit at that leading edge and. And drive success because of market timing, hopefully because of good operation, but also market timing as well. And so this felt very familiar for me. And so I, you know, I don't come from the restaurant industry. I. I sit on the James Beard Awards committee. And so I understand a perspective of the restaurant space from one angle, but this is something a little bit broader than that. As restaurants struggle with things like labor shortages and rising labor costs and even labor happiness and, you know, a lot of modernization, I felt like I could come in and have an impact. And, I mean, look, I started in Hollywood, which is a kind of a weird place for a restaurant guy to, you know, start, who ultimately wound up in restaurant technology. I was a film producer and financier for the kind of first part of my career, and did about probably 30 movies and did it with most of the major studios. And I. And then I got into technology because I was teaching a film finance class at ucla, and I wanted to talk about how movies make money in theaters, and nobody cared. They were like, this Netflix thing, it feels like it's going to be big. And so at least I was smart enough to pay attention to that. And so. And I was getting a little bored with the movie business. One of the first movies I made was the high school movie, she's all that. And it did well enough that everybody was like, this is what you're going to do for the rest of your life. You're going to make teenage. And so it's cool. It pays the bills and, you know, but there's only so many versions of it you can make before you want to pull your hair out. And, and then I got into kind of, kind of leaned into that, got into the streaming space for kind of streaming technology and was one of the founders of a company called vix. Vix, A streaming service called vix. So it's think of it as like a Netflix for Spanish speakers. And we built that up, sold it to Televisa Univision, which is the largest Spanish language media company in the world. I worked there for a couple of years and then I came here and that was about two and a half years ago.
- [08:05]
A
So all throughout everything, you just as you're listing out your resume and this is why I wanted you to go through that. Because the movie industry has gone through this huge overhaul with streaming and all of that and understanding the finances of how to make money in movie theaters, that's. You could, you know, run a master's program on that because really smart people are still trying to figure that out. When you talk about, you know, Spanish speaking, you know, entertainment really becoming more mainstream, specifically in this country, that's sort of at the forefront. So you talk about, you know, being on that, that leading edge. And now restaurants and restaurants are, have it better than they've ever had it before because food culture's at an all time high. You could draw a direct line to when food network launches mid-90s to where we're at now with the advent of, you know, celebrity chefs and, you know, restaurants mattering and, you know, cooking shows being on not just, not just cable, but, you know, main primetime TV and all that comes from that. People taking pictures of their food and all of that. It is, it is at the forefront, certainly culturally here in the United States. And yet it's never been harder than it is right now to make a consistent, predictable profit, which is where I know a lot of AI comes in, which is where I know a lot of robotics come in.
- [09:21]
B
So talk to me about how you
- [09:22]
A
guys view those problems and why robotics is the solution.
- [09:26]
C
Yeah, it's interesting what you point out, right? So there's this culture of celebrity chef is really never been more pervasive and I love that. I think it's awesome. And because chefs used to be people that kind of sat back in the kitchen and you were never aware of them beyond their work, today, they are personalities in their own right. As you point out, there's Food Network and a whole bunch of other media platforms that really Service that audience quite well. But on the flip side, you know, there's been more restaurant bankruptcies in the last 12 months than there were in the last four or five years combined. So like, that's a weird collision of two things if you think about it, right? Yeah. And in the restaurant business, if you're killing it, if you're running your restaurant just great, whether you're a quick serve restaurant all the way to fine dining and kind of high end culinary, maybe you're a high single digit margin business, maybe low double digits on a good day. And so when you start adding in some of the things that are impacting the market today, whether those be labor shortages, rising labor costs, tariffs, immigration, inflation, there's a whole host of them. We can talk about what those are. It starts to compress those already thin margins. When think of technology, we really think of it as modernization that starts to increase those profit margins back up to where they once were. Everything that we do is driven by to create net new profits for restaurant operators so they can start to get those margins back and get away from the dangerously close place to, you know, restaurant bankruptcies. Because it's a fight for survival. It's a very existential fight. And I think one of the things that's so interesting to me is that, you know, the restaurant industry is not really a technology business. And so, you know, the front of the house modernized maybe 20 years ago with the advent of OpenTable, online reservations, point of sale systems. Even the former President and CTO of OpenTable sits on our board. He talks about that moment, a lot of what was happening back then. And then I think there's been some modernization in kind of the customer aspect of restaurants. Things like last mile delivery, doordash even. I ordered Postmates last night and my meal was delivered by a robot to my front door, which was kind of cool. So like there's been some innovation there, but what's been the innovation in the operations in the kitchen? And there hadn't really been much like, if you think about it, microwave oven, you know, it's been kind of operating the same time, the same way for a long time. And so I think a lot of restaurants are just not comfortable yet with technology, but they know that they need to get there. And especially as they're fighting for their life against some of these, you know, market headwinds, they're finally ready to do that. And so when I say maybe the founders of Miso were a little bit early, that's kind of what I'm talking about. Right. Because now, like, as restaurants fight for survival, like we can come in with modernization and we can really drive those profit margins back up. Right? And so I think that that's really the very special moment that we're in today, which is, which is unique if you, you know, if you think about it, the restaurants really just look, they want one stop shopping when it comes to technology, right? They want to try a product and if it works, they're going to go back to whoever that vendor is and say, I trust you now, what else you got? Because they don't really want to sit there and look at, you know, a spreadsheet full of 20 different software products or even robotics products and say, like, which of these do I choose? How do I make that decision? That's just not really what they want. They're hardcore restaurant operators. They know how their business runs. They don't necessarily want to take that leap unless they are really fighting for their life. And that's great. We're happy to partner with people and be that one stop solution when they need it.
- [13:32]
A
You've mentioned the word monetization a couple times, and I feel like ours is an industry that gets dragged into it. There are a couple of people at the, at the, you know, the tip of the spear who always want to be at the forefront, who always want to, you know, adopt new technology early and all of that. And I think the rest of the 98% are dragged kicking and screaming. I think the pandemic was certainly an obvious illustration of that. I think there were people that saw takeout and delivery as a really viable opportunity, a really important revenue stream. And I think the rest of the people learned it the hard way when the restaurants all closed and they said, well, nobody can come in. Well, I have to do takeout delivery because it's the only way I can get my product and generate sales. You know, it's the only way I can get my product to my customers. And so they did it begrudgingly. And then all of that, you know, advancement that happened with getting on DoorDash and Postmates and UberEats and then all of the, you know, the aggregation software that happened and all of the, you know, the integrations with POS and all of that.
- [14:33]
B
But we, we were, we were dragged
- [14:35]
A
kicking and screaming as an industry into that. And so I want to talk about robotics because robotics feels like, I think to a lot of the people who are going to listen to this, I'm sure a lot of people who are tuning in now are going well, that's not me. Right, because we'll let the big guys do it, make the investment, see if it works and all of that. And then when it's proven right, there's the old joke in advertising. Everybody's first in line to go second. I've got friends who work in, you know, advertising for Broadway and they just, they love to quote this all the time. I said, you know, you come up with some really great, innovative idea and they said, well, where else has it worked? Well, no, no, no, this is an idea we brought to you guys first. Like, well, I don't know, like, bring it to the, you know, show me, you know, show me somebody else. When Wicked does it, then I'll, then I'll do it. It's like everybody's first in line to go second. And so I think it's a dangerous spot to be right now. To your point, more restaurants have closed in the last 12 months than the, the previous five years. I've read that same statistic as well.
- [15:30]
B
So talk to me about that.
- [15:32]
A
Because modernization, I don't think is something that people want. It's something that they know they have to do. How do we get them on the other side of the fence there where they say, yes, I want to modernize in very specific ways. We always talk about, you know, low effort, high impact, what's the low hanging fruit, what's the thing you can do that can have an outsize ROI there? So talk to me how you think, how you guys think about that as a company, because you're thinking about where to place your products. And I want to get into the products as well, because I think what you guys have built is, is really cool.
- [16:06]
B
Start there.
- [16:07]
A
However, you whatever the most productive way to continue this.
- [16:10]
C
Well, I want to just flag that you're using the word modernization and not automation because I do the same thing. And I think that for me, I do that because modernization really sort of indicates something that's inevitable. And you know, restaurant technology is inevitable. And so whereas automation feels like something you do in an auto factory or a warehouse, and that's been around for decades, in many respects, automation is the wrong word as well, because we're not trying to get rid of humans in restaurants. Why would you want to? What we are trying to do is to modernize some of the things that humans aren't particularly good at. If you do that, you start to increase the retention of the humans that you can hire. Because you're right, the pandemic was a game changer for the restaurant industry. If you remember, there was so much publicity around restaurants not being able to hire enough people. And everybody thought that was temporary, but it just accelerated something that was already happening. Now it's a permanent problem. Birth rate way down in the US and globally. So a lot of these jobs that used to be staffed by, you know, teenagers, there's fewer teenagers in the world. So, like, they're obviously going to be harder to find. And they also don't want a lot of these traditional kitchen jobs that are dangerous, like the fry station. Almost everybody burns themselves. And if you've ever worked there, you've got the burns on your arm to prove it. It's really crazy. But what did happen during the pandemic is that things like what you're talking about around doordash or postmates, that delivery that restaurants were doing in order to survive when people couldn't come in, it taught them new workflows. And suddenly they were like, oh my gosh, I can't live without this. But they would have never known it had they not taken, excuse me, that leap. And I think that somehow has made restaurant operators far more willing and open for the first time probably in our entire professional lives to start to build relationships with companies like ours, right? They typically would have a long term relationship with, for instance, a kitchen equipment manufacturer. But now those kitchen equipment manufacturers have not modernized. Many of them are kind of the blockbuster video of our spaces. They're not going to last. And they're still selling a bunch of disconnected point solutions like they have for the last 50 years. And that's not what people need. So they want these new workflows. They're open to building new relationships with companies like ours. And then the upside is massive because the world of, you know, AI robots, technology modernization, whatever label you want to put on it is moved beyond novelty. And it was a novelty a few years ago. And so people are like, oh, robots. Cool. Makes for a cool video. I want to try one today. That's all out the window. As people are fighting for survival as restaurant operators. They need roi. I gave a keynote speech a couple months ago at a conference and, you know, the theme was it just has to work. And someone pulled me aside afterwards and like, you need that tattooed on your forehead because that's where the industry is. And so for us, you know, we built, as an example, we built, you know, kind of our signature product, which is called Flippy Fry Station. It's a AI robot and it just entirely automates and modernizes the fry station process and in turn reduces up to about 90% of the labor that's needed. So, you know, if you're trying to reduce costs, that's one way to reduce the cost. Right. You're reducing the injuries. You can even potentially reduce your labor costs. You can, you're reducing your food waste. Huge, huge food waste costs in restaurant industry. And a lot of it's because stuff gets pre cooked at the fry station and nobody ever shows up to buy it. And they toss it after 10 minutes. And so, you know, Flippy just cooks everything fresh, hot, on demand. He doesn't know how to undercook, he doesn't know how to overcook. Quality goes way up. Customer experience goes way up. Throughput goes way up. Because he works at twice the speed of a human. But you know, a human can maybe cook 40 or 50 baskets an hour at the high end of fried food and, but you know, but then they got to stop, take a smoke break, call the girlfriend, they might sue you. Like, Flippy just keeps going. He's 2x that. So like there's a lot of benefits to it. You can also take those humans and redeploy them into doing very human things. And when you do that, what you find is your retention of those employees goes way up. You know, we all know the stats around, you know, annual turnover rates for labor in restaurants. The price station is the vendor. Like you're lucky to find a teenager that'll do it for 90 days before he just stops showing up. Yeah. This does is this actually allows them to work on the things that are far more enjoyable and that keeps them there for a long time. And so, so your entries go down, people are not burning themselves. Your cost to replace that person goes way down. If they're staying longer, they're gonna, you know, you're, you're delaying those costs, spreading out those costs. The average is about 6,000 bucks in across the industry to, you know, source onboard train a new employee. And it's hard.
- [21:21]
A
Yeah. At least.
- [21:22]
C
Yeah. So if you're keeping employees longer, you're reducing those costs as well. So for us, the net net of that is that for every dollar somebody pays us, they're easily making two to three times that in returns on just the net new profits. Because everything that we do drops to the bottom line. And that's really impactful if you're a single restaurant operator or if you're a multi unit restaurant operator. And that's what we're here to do. Right. So that's really the name of the game on this. And it's like roi, roi, roi. That's really what people care about. They want to make sure it works. They want to make sure that it returns their investment. We built a pricing structure that does that on Flippy and we've built a support network that does that on Flippy. One of the things I was brought here to do was to create enterprise grade support because you don't want to make that mistake that too many other people have made. When you're rolling out new technology where you get it out there and you, you know, it's going really great and then you start expanding and then the whole thing implodes on itself because you can't support at scale, right? So we just got to work, right? It's got to work. And so we spent an extraordinary amount of time and effort and money last year building all of that support, right? Everything from manufacturing capacity, you know, pricing, structures, equipment, financing, support, if anybody needs it. And we don't even require any money up front, like, and there's a misconception in the market, I think, that you need millions of dollars to, you know, modernize your, your kitchen and your restaurant. And we've done away with that, like zero money up front. You pay us a few bucks a month and, you know, you're up and running. And our robot installs in a few hours overnight. And so it's like it's become really, really simple. Not to mention the support. Right, Check.
- [23:13]
A
Yeah, yeah.
- [23:14]
C
It's the 247 tech support in English and Spanish, it's the field maintenance. So there's always somebody that can be there in a couple of hours if it actually breaks. Like there's so much that goes with it that restaurants really need in order to operate at scale.
- [23:26]
A
Great. There's so many things you said there. I'm going to pause you here because I want to go back in and pull it, pull out a bunch of these threads. Number one, I think you use the term redeployment, and I think that's a really good way of looking at this. I've certainly shared case studies. The natural one. I mean, there's a million that we can bring to mind. The one that I always talk about a lot is the McDonald's case study, which isn't as helpful now because when you think way back when, when they rolled out the kiosks, right, that they were doing it to cut labor and they ended up not cutting labor at all, they just redeployed that labor by putting one of the cashiers up by the kiosks. To be helpful and friendly and walk people through how to work it. And they redeployed people in the dining room. They were cleaning the dining room more than they had ever done in the. In the past. And they realized that there's two main reasons why people didn't come into McDonald's were when they walked in and they saw the line was too long. So the kiosks helped solve that. And the second one is they walked in if the line was okay, they looked over to the dining room to make sure there was somewhere they could eat, and if there was, like, dirt and trash and crumbs and all that. So they got rid of the lines. They had somebody positioned to really welcome you when you walked in, and they had somebody else cleaning the dining room over and over and over to keep it neat and tidy. It was just a redeployment of people. The other piece to it is that you talked about, right? Long hours, late nights, dangerous jobs, repetitive, which leads to other, you know, other injuries. Also boredom. We talk about that, you know, why people leave jobs. It's like, it's just no longer fulfilling. It's not challenging dropping fry baskets over and over and over. So if we could, you know, reposition those people and do a job that's not as hard, not as dirty, not as dangerous, not as repetitive, then I think we give people a fighting chance for being with us because they're doing more interesting jobs. One of the things that's been a common thread over, I'll say, the last three years of running this podcast, and I've run this podcast for the last seven years, but the last three years is let's let the computers do the things that the computers can do well, so we can free up the people to do the things that only the people. Only the people can do. Talk to me about the. Just the logistics of this. Somebody says, this sounds great. How do I know if it's gonna work for me? Because maybe they say, well, I don't know if they can deal with the volume. I don't know if the, you know, the flippy robot's gonna work. Like, what's the first step? They call and have a phone call. They have somebody come by. They're like, how do you know if it's gonna work in their little space in their unique kitchen and all of this? So talk to me about how, like, that conversation begins.
- [25:48]
C
Well, just like you said, I'm gonna pull on a couple threads of things that you said, too, and then I'll answer that question. Because I think it's really sort of the fundamental one, which is like, how. How do you start? It's a really hard one for some people. Yeah, but I think what you were talking about with the workforce is really critical so, you know, in workforce boredom, which then leads to people, you know, quitting and going. Doing something else. Right. So we had this experience last summer where the landlord across the street had an empty restaurant space, and he said, if I give you the space for free for the summer, can you do something with it? Just keep my building alive. And I thought, yeah, man, that's cool. So we've stacked it with robots. We put a flippy in there, we put some other people's robots. We made it really cool. We did burgers and fries. And right before we opened, we went and put out a job rep to try to get people to work in the kitchen. And we got zero applications. I mean, literally nobody. So after a few days, we pulled it back, we rewrote it and said, you get to work with a Robot, and in 24 hours, we got 200 applications. And I think what that says is that people don't want to be bored in the workplace. Right. They want to do something that's fulfilling, that might give them a career. It's more than just a paycheck today. And so because there's other ways you can get a paycheck. You can drive doordash, do it on your own time. And so, like, especially with a generation that grew up with a phone in their hand, they're Instagram friendly, they're not scared of technology. They actually want that. So now those, those people. What we found is those people were coming to us working in the kitchen, doing a job that some people consider not fun. But in their mind, they were upskilling themselves. Now they put digital and robots and technology on their resume, and that's sort of a stepping stone to their next job. And I think that's. That's really important to think about. The lines is another one. Long lines is a killer for restaurants, especially in the quick serve space. And so we just installed a flippy at our first NBA stadium. And think about what the lines are like there, because everybody wants to eat at halftime. Nobody wants to eat in the second quarter or the third quarter, but at halftime everybody wants to eat. And so lines are an absolute revenue killer. So we put a flippy robot in there and we're testing it. And so far it's keeping up and it's doing great, and it's cooking, you know, an average of £50 an hour. And that's, you know, allowing them to operate with, you know, fewer humans. They have massive labor shortages in stadiums. It's really, really hard to get people sort of sporadic schedules. And so, you know, when you're. You've got an NFL game for the day or an NBA game and then nothing for a couple days and then a K pop concert. And so, like, you know, that's really tough. And if you can automate some of that stuff and modernize some of that stuff so the humans do human things like, that's really the holy grail in terms of how somebody starts. First of all, you need to be doing a certain amount of volume. So whatever, that's anywhere from half a million dollars to maybe $750,000 of, you know, annual sales. And a decent amount of that for us needs to be at the fry station, since we're, you know, kind of really pushing our flippy robot. But then it's really simple. It's literally just an email or a phone call to us. And we've really built a simple onboarding process that allows a potential customer to decide whether we're right, the right fit in one or two phone calls. It's really, really simple. And so anybody could go to misorobotics.com and there's a contact us form or, I mean, send me an email. Right? Rhauso robotics.com youm can send me an email. I'll get you to the right place. But we've made it really, really simple. And so, so. And then the installation of that is really easy too. So, you know, you just close at night. We install overnight. You're up and running in the morning. It's all really, really simple. It's not for everybody. You know, you've got to have enough sales, you've got to have enough space in your kitchen to install one of these robots. It doesn't take a lot of extra space, maybe, you know, six inches on either side of your existing fry station footprint. You know, you need three or four fryers, so you've got to be doing a decent volume of fried food. And so there's a few considerations, but, you know, beyond that, it's a pretty simple yes or no thing. And we'll tell you up front whether, you know, you're a good customer for us, because that's part of what we bring to the table, is like, we have an ideal customer profile. We don't want go and, you know, put a square peg in a round hole because that doesn't benefit Us, and it doesn't benefit the customer. We invest a lot of money in our customers. And so we. I don't want to invest that money if somebody's gonna have a bad experience or if they're gonna get to the goal line and, you know, not get over it, or if they're gonna want to give the robot back in a month because they hate it. So, like, that's not the business we're in. We're in the business of finding the right fit for people. And we're very quick to. We tell people no all the time, but we tell people yes all the time as well. And so far, those people have had just a really amazing experience. And so what we really are building is what happens typically is people come to us for the Flippy robot because they just are really struggling to solve the fry station. And then, you know, we've started announcing other products. So, for instance, we just acquired a product called Signal. And Signal is a restaurant operations software product. It's like an app, and it also has an employee incentive component to it. And so we. Ironically, we were building something that was almost identical, and we called our Zippy, and these guys had Signal, they called their Ziggy. So if you ever needed a sign from the universe that, like, two products should be combined. And so we loved what they were doing. So, you know, we acquired them, brought in their whole team, combined it with our team that's building Zippy, and we've been rolling that out pretty substantially. Like, we're in a lot of stores at this point. Hundreds and growing as fast as we possibly can. There's a lot of demand for that product across more than a dozen restaurant brands. So typically, we go to the franchisees. Those are the people that really are our best customer. And we keep corporate, you know, the corporate guys in the loop and make sure that nothing happens without their approval. And then sometimes they sort of fall in love, too. We've had that experience, especially on the, you know, Zippy slash Zignal product, where we'll start with a franchisee. The corporate guys will kind of look over their shoulder and go, that's pretty good. I need to put that in my corporate store. So what. What Signal does is. And Signal slash Zippy. So we'll. We'll keep the Signal name through the end of the year on that product, but then they're being combined. So that's a restaurant operation system. So it was. It ingests point of sale data, labor scheduling, payroll, like all of your key operational data, layers it through AI provides real time dashboards, allows you to see everything in one place. And that's for the restaurant operator and the gm. But then on the flip side, there's a separate view for the employees that says, here's your sales goal for the day. If you hit that sales goal, everybody on the shift gets an extra dollar an hour. If you hit 2x, the sales goal, everybody gets $2 an hour. So it's driving a ton of net new profits and revenues literally in month one. And it's good for the restaurant operator, it's good for the employees, keeps the employees making more money. Restaurant operators are making more money, the employees stay longer. And so all of that is kind of powered by our platform. We sort of have this platform that we call the Miso Club. It's sort of the brains of, you know, a digital infrastructure that powers modern restaurants. So the Miso Hub can power Flippy, it can power Zippy Signal, it can power a whole bunch of other things. But that seems to be the cadence of what happens. Some people happens the opposite. They start with, you know, the Zippy Signal product and they're like, oh, that's a couple hundred bucks a month. That's a pretty easy one. And I don't have any hardware installation. You know, the hardware installation is go to the Apple Store and buy an iPad. Yeah, that's it. Right. And then download the app and you're in business. Right. So it's almost instantaneous onboarding that gives them a chance to get, you know, comfortable with technology. And, and the best part about it is like, that product has been built for us by a restaurant operator, you know, so I love the origin story of the Signal team that we acquired because it was a guy that owned a bunch of Auntie Anne's pretzel restaurants at a bunch of malls. And he spent his whole day driving from store to store talking to GMs. And he was like, I gotta be able to run this from my phone, man. There's gotta be an easier way. And a couple years ago, it didn't exist, which is, you know, gives you an indicator of how much headroom there is in the restaurant space for technology to come and drive massive, massive leaps forward in profitability. And so he just decided he would build it. And so he built it the way a restaurant operator wants it. So the restaurant operators love it, the GMs love it, the employees love it. It's a really, really great product. And so all of our products talk to each other. I think the ability to communicate seamlessly is Amazing. And when I talk about one stop shopping for your technology partner, that's what I'm talking about. You want everything to talk to each other seamlessly. You don't want to be choosing what's a good product, what's a bad product. You just want somebody you trust to do it. And that's really the business that we've built here.
- [35:22]
A
Rich, talk to me about the roi. Cause you've mentioned it a couple different times. It's obviously something I talk about all the time. We don't spend money, we invest money. And we have to be able to measure the return of what we're investing. Obviously. Flippy chews up labor hours. Flippy helps with the cost of retraining. Wasted food serves more people. So we cut down lines so nobody's walking in and saying, oh man, there's a long line. Talk to me about how else you guys think about the roi.
- [35:51]
C
Well, it's all of those things plus, you know, food waste we talked about a minute ago, which I think is critical. Like half the French fries in America get thrown out after 10 or 12 minutes. French fries just start to taste stale and gross. And so you dump them. And most people, when you're working in a kitchen, you've got a million things to do. You don't want to, you know, wait on the fry station. And so you pre cook a lot of stuff and then if no customer walks in to buy that food, you just dump it. French fries are the worst offender. And we've actually been working on this. We just launched with our partners at White Castle, a new feature for Flippy called Predictive Automation, where he starts to ingest your forecast data and then he starts to refine it and make it better and better. And he can start to pre cook stuff only when there's demand for it. And so, you know what I mean? And so by the time the order gets into the POS system, it's almost too late because you're going to find yourself waiting, especially during peak rush, you're going to find yourself waiting on the fry station. So now Flippy's starting to take action before that order even comes in. And it's accelerating your speed of service. And so, you know, in the quick serve space, every six seconds translates roughly into 1% increase of profitability if you think about it, right? And so if you can compress yourself even 30 seconds, that's a lot of net new profits because people are no longer turning away because of lines, because the speed of service is getting the orders out faster. And so Flippy is really, you know, bringing a lot of value on that front right now. So on Flippy, you know what we find is the ROI is you know, upwards of like 3x. So every dollar you spend on us you're going to make $3 in return. That drops to the bottom line. On Zippy Signal it's about 10x. So every dollar you spend on us, you're going to make 10 in return. And all these happen in month one because you don't have upfront costs. Right, that's. We did that on purpose because restaurant operators don't tend to have a lot of cash on their balance sheet. You know, if you're Chipotle and last time I looked they had like $3 billion of cash. So maybe they're the exception. I'm sure there's one or two others, but for the most part like they, they don't. And so we've built a pricing system on all of our products that require no money up front. And it's always going to be something, you know that your monthly payment is going to be far less than you're making by making that monthly payment, you know, making it in terms of profit. Right. So even for Flippy, it's cheaper than a human, like you'd be paying the human anyway. So we always want it to be cheaper than a human just in your out of pocket costs and then you add your 3x ROI on top of that in the first or second month. It's a pretty compelling opportunity. So really it just becomes almost like you were talking about earlier, like the make people making that leap, like picking up the phone and just calling us or sending us an email. It's really super simple. And starting the conversation, I think that's kind of 90% of the battle. I grew up playing year round baseball and you know, my coach used to say over and over and over, 90% of the battle is just stepping into the batter's box. And so, you know, and if you swing enough times, you're going to hit a certain percentage of them. And that's kind of the way I feel about this. You just take the leap, you make the call, you send the email, you have a dialogue. At worst it's 20 minutes of your time and you realize this is not for me. But at best you might find something that like massively changes your business.
- [39:21]
A
Yeah. So we do, we make the show actionable. Every single week there is some course of action that we send people to do at the end of the episode. So that is the the action I'm going to ask everyone to take. If this sounds like you, right, you got to be doing enough revenue, you've got to be doing enough volume out of your fry station. But already, I mean, I work with 132 clients right now and five of them just popped to the top of my head. One of them in particular has got three restaurants and they do, I don't know, he probably does three and a half million dollars of fried food a year out of his $7 million operation. So like immediately there are people that I think of, I'm sure there are people listening. You are listening to this and this sounds like you. If it sounds like you, I would say reach out and have a conversation. There's no pressure to do anything but have a conversation and see if it makes sense. So you said miso robotics.com. is that what we're sending people?
- [40:11]
C
That's where we're sending people. Miso robotics.com or send me an email. R Halliso robotics. R H U L L at Mesa Robotics. You know, I'll get you to the right place. And, and I love that you mentioned even the, because we spent a lot of time on this discussion talking about, you know, multi unit operators. But even the, you know, customer you mentioned, that is your client that's got three locations. You know, even that guy gets value if he's the right fit for us. We just installed at a two location restaurant in Washington state called Insert Coin. It's like a Dave and Buster's type adult arcade concept. And so they've been driving tons of profitability from this because they're struggling with labor. They're also driving a lot of net new revenue because they knocked a hole in the wall of the kitchen and put a window there. And so like showing up going, oh, I want to see my robot cooking my fries. And they're ordering more fried food only so they can put their phone up and shoot Instagram videos and post it and all that kind of stuff. So there's all kinds of benefits that, you know, drive that, that kind of high ROI on this product.
- [41:21]
A
I love it. So we're going to put the website in the show notes. We're going to put Rich's email. I love when guests share their personal email. I've had guys share their cell phone. I'm not going to ask you to do that. We'll have them email you or go to the website. Rich, I appreciate you taking time to be, to have this conversation. I think it's going to be the first of many that we're going to have over the next little while. Any other final words of wisdom that you want to leave with the listeners?
- [41:46]
C
I think it's that this seems to be a theme. And so it wasn't intended to be this way, but I think it's have that conversation, right? Reach out to us. Have a conversation. It's 20 minutes of your time. If it's not a fit, we'll shake hands and part as friends. But if it is, it's worth it. And it's worth it for your survivability. Like we're all trying to save a lot of jobs. When restaurants go out of business, it's bad for everybody. It's bad for the community, the neighborhoods, the workers, the customers. It's just not a good outcome. And you know, I live in California where the minimum wage in restaurants is $20 an hour. The LA City Council is trying to push that to $30 an hour in advance of the Olympics. Denver just went to $20 an hour. 25 states just boosted their minimum wage. Like the labor cost challenge, it's not going away, it's only going in one direction. So if you're struggling with that, you want to get ahead of that. It's worth it to have a conversation. You can always say no, but it's really educational. And this is, look, this is the way modern restaurants are operating. Like, we know that's the case. I described some of the old school restaurant equipment vendors as the Blockbuster Video of our space. But I really mean that. You don't want to be that guy, you want to modernize. And then what happens every single time is technology comes in, creates new workflows and then you're like, how did I live without this? Right? That's really the light bulb moment that most people have with us. And so I would encourage people to give it a shot.
- [43:23]
A
It's funny, Rich. I was invited to give a talk at Bar and Restaurant Expo four and a half years ago, just coming out of the pandemic. And it was all about technology and the adoption curve. And I spent very little time, a 45 minute talk. I spent the first 20 minutes talking about the massive disruption that befell every other industry. It was like what E Commerce did to shopping malls, what streaming did to Blockbuster, what Kindle did to the publishing industry. I mean, on and on and on. I mean, just look at every Expedia, what they did to travel agencies and how we now book flights and vacations. And every single one. I was like, you know where I'm getting to guys, right. I'm going to talk about how something destroyed the restaurants, and you're either going to be riding that wave or crushed by that wave. And I really think it's a, you know, it's a sink or swim kind of thing.
- [44:13]
C
But you're having a lot of change in that. Like, I imagine the room that you would be talking to today, giving that same speech, is probably different than the room that you were talking to not too long ago. Right. Because you're seeing a lot of turnover happening in leadership.
- [44:28]
A
Yes.
- [44:29]
C
And so what we're finding now, and
- [44:31]
B
those are our people.
- [44:32]
C
Right. If you've been running your restaurant for 50 years and you've been doing it the same way, you're pretty entrenched. Whereas when you start to bring in either the second generation of your family or the, you know, the. If you're a publicly traded QSR brand, you're bringing in new leadership. Those guys are in their, you know, 30s and 40s. They're super comfortable with technology. They were brought here to modernize existing brands, maybe some that are just barely hanging on. They understand what technology is today. And so I think that, you know, sort of aging down of leadership is really been one of those watershed moments that is causing restaurants to suddenly start to, you know, massively adopt technology. Like the wave is broken. Like, we're no longer in the race as you describe it. I want to be first, to be second. Like, that's already happened. Right. I can, you know, we. In a different conversation. I can point to all the different, you know, pieces of technology that people are rolling out at scale, whether it be voice AI for the drive through that's now in tens of thousands of locations or, or in the, you know, credit card readers that get brought to your table that are in, you know, tens of thousands of locations. Like, like we're past that watershed moment. Now it's just about how quickly can you adopt it? Adopt it because it's been proven. Because, remember, it just has.
- [45:52]
A
I agree. It just has to work. I think the most important question that I wanted to get answered, which I did and you did earlier, is it feels Herculean. It feels expensive. It feels like an investment of time, resources, money, all of that. That seems like too much. And so it's the how do I get started? How does it actually get installed? How does it actually start working? How does it prove the roi? That's why I focused most of my questions in those areas, because I think that's the thing that is or will keep someone from taking that step. So I want to be absolutely crystal clear. It begins with a phone call. It begins with having a conversation. And if it makes sense, they'll tell you. If it doesn't make sense, they'll tell you. And I think. And that's true for, I think Miso and the products they've got here. And that's true for anything else. For the listeners. Anything else you're going to see over the last little while. It is, it is about just taking that first step and getting started. Rich, I appreciate you taking the time. Thank you very much for sharing your insights, your expertise over the last little while.
- [46:54]
C
Thanks, Chip. It's been a great conversation. I love your podcast. You do a great job on it and I'm really grateful that you had me on.
- [47:02]
B
Once again, I want to thank Rich for taking time out of his day to sit and chat with me. All of those links are in the show notes. So if you want to connect with Rich, go to their website, connect with him directly on LinkedIn or email him. All of that is in the show notes.
- [47:16]
A
Please do it.
- [47:16]
B
I've seen this thing in action. The flippy is the real deal, especially if you're doing a meaningful amount of fried food in your kitchen. This makes it safer. This makes it easier to execute and more efficient. One final reminder, we are now filling spots for the restaurant opening boot camp. It kicks off in on July 9th. It's two hours every single week, 12 two hour sessions meant to save you tens of thousands of dollars in mistakes that we've seen happen over and over and over. We've never done anything like. You are going to find that link in the show notes as well. Go click there. Put in some information. We're taking inquiries now. We are filling the only, only 20 spots. That's it.
- [47:58]
A
Again, I know you got a lot
- [48:00]
B
of great podcasts listen to. I appreciate you making this part of your week. Hope you get some sort of value out of it. Thank you very much, guys and I will see you on the next one.