Fast-Food Chains Order Up AI Despite Early Missteps

The fast food industry is stepping up its adoption of artificial intelligence (AI) and automation, with market stalwarts including McDonald’s, Yum! Brands and Wendy’s expanding their deployment of the technology to streamline operations, improve profitability and enhance the customer experience.

Last week, McDonald’s Chairman and CEO Chris Kempczinski cited AI adoption among his top three trends in 2025 for the quick service restaurant industry. (The other two were protein and sauces.)

“Everybody’s talking about AI and AI certainly has a lot of applications in our business,” he said on Instagram. “We’ve got a number of teams looking at how we can use AI to deliver an even better experience for our customers and even better experience for our crew members.”

According to a December survey of restaurant operators and financiers by TD Bank, 42% said AI and automation will have the greatest impact on the restaurant industry in 2025. That’s second only to lower interest rates, at 46%.

At McDonald’s, the chain is revamping the technology footprint at its 43,000 restaurants, including enabling kitchen equipment to connect to the internet, deploying AI-powered drive-throughs and providing AI tools for its managers, CIO Brian Rice told The Wall Street Journal, per a Wednesday (March 5) report.

Kitchen equipment will have sensors that feed data into its edge computing system — where data is processed and analyzed in the store — to give franchisees a real-time view of their restaurants’ operations.

McDonald’s is also considering using computer vision with its in-store cameras to make sure orders are correct before they’re handed to customers. It is also thinking about creating a “generative AI virtual manager” that can handle administrative tasks like shift scheduling.

Read more: McDonald’s Sees Boost in Loyalty Amid Challenges in Q4 Earnings

Learning From Early Missteps

McDonald’s will try its hand again at deploying an AI voice-ordering system at its drive-throughs. This time, it is partnering with Google Cloud. A similar experiment with IBM led to wrong diner orders — such as bacon ice cream — thus killing the deal.

Last fall, Domino’s was sued over allegedly using recorded phone orders to train its AI voice assistant, according to Bloomberg Law. The lawsuit was dropped in January.

Wendy’s AI also had a rough start, with diners complaining about its early days.

“It. Is. Horrible,” opined one diner on Reddit. “I can speak loud and clear and it would still take 3x to understand what I’m saying. The AI would keep cutting me off mid-sentence.”

But the AI is improving. “One thing I love about it, it continues to get better,” Wendy’s CEO Kirk Tanner told analysts during the company’s latest earnings call. “I put it to the test almost three or four times a week. It understands what to ask for, and the accuracy definitely is improving.”

See also: Wendy’s Purchasing Co-op to Deploy Palantir’s AI-Powered Supply Chain Solutions

Yum!, Wendy’s Latest AI Updates

Yum! Brands, the parent of KFC, Taco Bell and Pizza Hut, on Feb. 6 announced an integrated AI-driven platform called ‘Byte by Yum!’ to be rolled out throughout its global locations. The platform aims to optimize restaurant operations, improve order accuracy and increase diner satisfaction.

Byte uses AI to enhance online and mobile ordering, point-of-sale systems, kitchen and delivery optimization, labor management and team member training. It can forecast inventory more accurately and help speed up promotional rollouts, while its efficiencies aids in employee retention.

U.S. locations of Taco Bell uses Byte for integrated ordering and back-of-house efficiencies, while Pizza Hut locations in the U.S. saw improved delivery times and order tracking through the AI-powered kitchen system. The platform is already in use at 25,000 international locations.

Meanwhile, Wendy’s is expanding FreshAI, its AI-powered drive-thru ordering system pilot program, from 100 to 500-600 locations in 2025. Tanner said the technology increased the average amount spent by customers, since AI suggests additional items to order. Higher labor efficiency also added 80 basis points to restaurant margins at company-operated locations globally compared to a year ago.

The plan is part of a broader digital transformation of Wendy’s, including digital menu boards, AI-driven kiosks and backend automation tools.

More like this: Yum Brands: AI-Powered Marketing Campaigns Boost Customer Engagement

A Transformational Time for Fast Food

It’s not a surprise that quick service restaurants (QSRs) are expanding their adoption of AI.

“Restaurants are leveraging AI and automation to enhance operations and elevate guest and employee experiences,” said Anup Prasad, senior vice president and head of the Consumer Business unit at Cognizant, a global IT services company that recently expanded its partnership with McDonald’s.

“These technologies are pivotal for improving forecasting, addressing labor challenges, optimizing supply chain tracking, enhancing food safety and reducing waste through better demand forecasting,” Prasad told PYMNTS.

Sam Jones, a partner at Torch Capital whose deals include an IPO for Sweetgreen restaurants, added that he’s seeing “significant” opportunities for fast food chains to streamline operations, reduce overhead costs and enhance customer experiences through the intelligent adoption of AI.

“The potential use cases are endless in an industry where profitability is so tightly aligned to streamlining operating expenses,” Jones told PYMNTS. “There are also major opportunities to leverage AI to drive top-line growth and enhance customer experiences.”

Jones envisions a future where fast food apps and kiosks will feel more like “personal assistants, suggesting exactly what you want before you even ask, derived from previous orders, dietary restrictions and real-time factors like time of day” and other data.

“We’re still very much in the early stages of this adoption, with most companies still determining where in the value chain they see the greatest opportunity for AI to improve their operations,” Jones said.