Rise of the Machines: Practical uses of AI in franchising

Rise of the Machines: Practical uses of AI in franchising

The third instalment of the Terminator franchise, Rise of the Machines was launched way back in 2003. Back then, Artificial intelligence (AI) or machine learning was the talk of the town! It’s back on the agenda more recently, not least with debate about the AI chatbot: ChatGPT which can create human text and language.

How franchisees will be able to harness such developments within their day-to-day business remains to be seen. However, there is no doubt that AI has moved on in practical terms in recent years, with some other applications now really beginning to bear fruit. These particularly relate to how AI or machine learning can process large quantities of data.

One example is within the field of loss prevention within the retail and quick service restaurant (QSR) franchised industries. Any video management or surveillance system will generate large quantities of footage. However, these days, AI in combination with video surveillance, has been developed to enable suspicious transactions to be identified. The video allows transactions flagged by the AI, to be verified.

These could be related to new staff who may be unaware of cash handling procedures or even potential stealing. Any discount or coupon abuse, sweethearting or excessively expensive manager’s meals can be tracked too, as can returns, discounts or voids on the EPOS. If issues are found in one location, the AI can then learn what retail/QSR franchise clients perceive to be suspicious behaviour.

At DTiQ, our AI/Machine learning has learned (and will continue to learn) what constitutes a suspicious transaction. We use exception based reporting to help identify and train the AI. Trends can then be tracked across multiple stores as well as individual transactions which can easily be identified, monitored and presented.

For multi-unit franchisees, analysis of data in this way, means all stores can be compared and consistency and quality applied across the estate. Also, video recording facilities of examples of best practice can easily be shared with each location to help with staff training. They can see what should be being done.

One of the main benefits of combining AI and data analysis of video surveillance is that when issues are identified, it’s easy to view any specific date or time to confirm a theft or suspicious transaction rather than trawling through many hours of CCTV footage. A remote incident storage archive (RISA) can record footage from a multitude of cameras, and these can be combined into one feed to be sent to the senior member of the team responsible for loss prevention or other authorities, without the need to actually drive to the store to pick up a USB too. 

One particular example of AI in action relates to exception based reporting for drive-thru restaurants. Many managers are either incentivised or targeted to reduce their drive-thru speed of service (SOS). Near closing time, they may encourage their friends or colleagues to drive round repeatedly to collect small (99p) orders, so their numbers look better. The AI flags this scenario as an exception so franchisees can intervene and address the issue.

On its own video surveillance should be able to help managers identify such issues, but because they are busy, only 1% of footage is ever viewed. However, advanced server technology can now record video surveillance of stores and software maps this to EPOS data. Integrated AI automatically picks out and alerts operators to any anomalies which need highlighting. The option to search for precise time slots or incidents, and the fact that footage can be stored for the duration of the contract, means that operators can check past events easily if needed.

Remote video surveillance linked to EPOS and AI can now practically address a raft of common challenges faced by retail and QSR franchisees. Machine learning is now coming into its own to flag data issues automatically, and in combination with video footage and analytics it can now furnish franchisees with the evidence needed to mitigate loss prevention in all its forms.

We are seeing a real-life rise of the machines. However, working with the right team means their capability can be harnessed for the benefit of franchisees’ businesses.

Gareth Bakewell
Gareth Bakewell