Applebee's and IHOP Plan to Introduce AI in Restaurants

The company behind Applebee's and IHOP plans to use artificial intelligence in its restaurants and behind the scenes to streamline operations and encourage repeat customers.
Dine Brands is adding AI-infused tech support for all of its franchisees, as well as an AI-powered 'personalization engine' that helps restaurants offer customized deals to diners, said Chief Information Officer Justin Skelton.
The Pasadena, Calif.-based company, which also owns Fuzzy's Taco Shop and has over 3,500 restaurants across its brands, is taking a 'practical' approach to AI by focusing on areas that can drive sales, Skelton said.
Streamlining tech support for Dine Brands' more than 300 franchisees is important because issues like a broken printer take valuable time away from actually managing restaurants, Skelton said.
Dine Brands' AI tool, which was built with Amazon's Q generative AI assistant, allows the company's field technology services staff to query its knowledge base for tech help using plain English, rather than needing to manually search for answers.
The company's personalization engine, which also uses generative AI, automatically recommends new or additional items to customers based on their prior purchases and the purchases of diners similar to them, Skelton said. IHOP was one of the first family-dining restaurants to install a loyalty program for diners, he said, which gives the restaurant chain insight into its customers' purchasing behaviors.
Dine Brands is exploring adding that technology to other channels, like servers' tablets and tablets that customers order from, in the next six months, Skelton said.
Increasing customer loyalty is a goal of the AI-based personalization engine, Skelton said, which can also be used as a tool for upselling. As diners become increasingly price-sensitive, Dine Brands has responded by adding promotions.
Other tech initiatives Dine Brands is testing include AI-powered cameras that can detect when a table needs to be cleared, as well as an AI app for restaurant managers that helps them oversee day-to-day operations like staffing, Skelton said. Those projects are in the experimentation phase, the company said.
It is technologies like these, which aren't as flashy, that could deliver the most for a restaurant chain's bottom line, said Brad Jashinsky, a director analyst at Gartner focused on retail, travel and hospitality.
Dine Brands declined to say how much it is spending on technology. Skelton said most of Dine Brands' AI and tech initiatives are carried out with the help of third-party vendors.
With these updates, Dine Brands joins McDonald's and Yum Brands' Pizza Hut and Taco Bell, which are similarly tapping AI in their restaurants and behind-the-scenes.
One promise of AI is that it can make fast-food and casual-dining restaurants more automated, lessening the need for human labor and speeding up the work of existing staff. The ability to offset labor costs—whether by reducing or more accurately forecasting it—is a major cost savings for restaurants, Jashinsky said.
AI can also make the dining experience more efficient and satisfying for customers at drive-throughs and in restaurants.
But there is reason to proceed with caution: AI-based order taking isn't always accurate, and Wendy's faced backlash last year for testing menus that used AI to adjust pricing.
It isn't yet clear to what extent robots and AI will replace humans, but many restaurant chains agree that there will be some disruption to their human labor force. Most are trying to strike the right balance between humans and automation inside of restaurants, Jashinsky said.
'AI is moving quickly, and I believe it's going to be embedded in everything we do,' Dine Brands' Skelton said.
Write to Belle Lin at belle.lin@wsj.com

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