Safeguarding Slim Margins for QSRs: How Automation Drives Efficiency and Profits

Though Fortune Business Insights projects the quick service restaurant (QSR) industry will grow from $862.05 billion to $1,467.04 billion by 2028, the reality is that owners are making the most of every dollar to maximize profit. With margins ranging from six to nine percent, even the smallest gain in efficiency and reduction of loss can make a significant impact on the bottom line. These razor-thin profit margins are driving QSRs to find innovative ways to keep up with the rapid pace of business while enhancing efficiency and delivering a best-in-class customer experience. 

Not surprisingly, QSRs are outpacing full-service restaurants with technology adoption. A recent Incisiv study found that QSRs expect 51 percent of tasks will be automated by 2025 while full-service restaurants expect only 27 percent of tasks to be automated by this time. To meet their automation goals, QSRs are deploying wireless network-enabled devices throughout their operations and are beginning to experience a transformative impact, including a boost to their bottom line. 

In this digital transformation journey, however, QSRs are finding that not all sensors and wireless networks are created equal. This is where LoRaWAN, a relative newcomer to the wireless network landscape, truly stands out.

The Advantages of LoRaWaN

In their slim margin businesses, QSRs are finding that LoRaWAN technology offers several advantages over other wireless and wired options.

LoRaWAN is a low power long range wireless protocol used to connect battery powered devices that send small amounts of data periodically throughout the day. These battery powered, sensor-enabled devices report the location, state, or condition of the environment, supplies, or other assets. LoRaWAN devices are extremely power-efficient and, in some use cases, can last for over ten years on one set of standard AA batteries. 

The network needed to connect these devices is very economical to deploy, operate, and manage. A single low-cost indoor LoRaWAN gateway can typically provide the required coverage throughout a QSR footprint and can support hundreds of connected devices operating simultaneously. 

The standards-based nature of LoRaWAN technology also attracts a large ecosystem of device manufacturers which generally drives per device costs down compared to cellular or proprietary data logger alternatives. This ecosystem produces devices for a wide variety of use cases which means the same LoRaWAN network can be used for several automation and operational advancements throughout a single store or a chain of restaurants.

Automation and Cost Saving Opportunities

Let’s look at some of the most common uses of LoRaWAN technology that can contribute to cost savings and protect margins in the QSR environment.

Temperature Monitoring: Ensuring food safety is paramount in the restaurant industry, and this is the leading driver of network-connected device adoption in QSRs. Sensors can monitor and help maintain optimal temperature levels in refrigerators, walk-ins, and other storage areas, reducing the risk of spoilage and ensuring compliance with food safety regulations. This helps restaurant owners avoid fines and potential legal issues, protecting their reputation and financial well-being. In fact, a leading restaurant solutions provider found that automating temperature monitoring with LoRaWAN technology reduced daily temperature checks up to 60 minutes each day and translated to tens of thousands of dollars of inventory savings by identifying and addressing malfunctioning food storage equipment.

Inventory Management: The food waste from both QSR and full-service restaurants in the U.S. is estimated to amount to approximately 22 billion to 33 billion pounds annually. Consequently, the entire U.S. restaurant industry is losing out on a potential $2 billion in revenue each year. There is a tremendous cost savings opportunity for QSRs by having insight into inventory levels and being able to predict demand accurately. With connected devices tracking stock levels, businesses can order only what's needed, reducing waste, improving overall inventory management efficiency, and saving money.

Energy Management: Energy costs can significantly impact a restaurant owner’s operational expenses. Energy Star found that QSRs use up to 10 times more energy per square foot than other commercial buildings. With connected devices monitoring energy consumption, businesses can identify areas of inefficiency and optimize energy usage, resulting in substantial cost savings over time. 

Equipment Monitoring and Maintenance: Downtime caused by malfunctioning equipment can disrupt QSR operations and lead to revenue loss. Even new machinery has a 33 percent chance of breaking down annually. While breakdowns happen, they can be avoided with predictive maintenance. LoRaWAN-enabled sensors can track the performance of machinery, allowing for proactive maintenance which can reduce the risk of unexpected breakdowns and costly food waste, and ensure worker safety.

Infrastructure Monitoring: Water and gas leaks can cause significant damage to a restaurant’s infrastructure, such as floors, walls, and equipment. By detecting leaks and alerting staff early, prompt action can be taken to minimize or prevent damage which can save restaurants from costly repairs and potential business disruption. 

Safety and Maintenance: Monitoring doors and windows to detect unauthorized access, open or unsecured states can be used to alert security personnel of potential dangers, preventing potential theft or vandalism. LoRaWAN devices can also be used to monitor cleanliness and stock levels of bathrooms and help keep facility maintenance protocols on track. 

The power of LoRaWAN connected devices has opened new possibilities for QSRs to optimize their operations and safeguard their slim profit margins. From enhancing safety and compliance to optimizing inventory management and energy usage, the benefits are far-reaching. With this move toward technology-enabled automation, QSRs not only improve productivity, reduce food waste, and elevate the customer experience, but they can also proactively address pressure points on their bottom line.