How Yum! Brands Uses AI Agents to Transform Restaurants | Karthik on AI, Data & ROI | Live at AI4

**Sanjay Puri** (0:00)
Chatbots are going to be used in drive-thrus also. They said, next time you are going through a drive-thrus, it might be a chatbot that you're dealing with. Is that true?

**Karthik** (0:08)
Why is there assistance? People have, the whole industry has been playing around with that for quite a while.
A very good example was McDonald's did a pilot with Watson a couple of years ago for drive-thrus, because labor is expensive, and someone is taking your order, which is a live human being, and that leads to error rates are high, and they are multitasking in the restaurant. So a lot of QSRs have pivoted to start using YCAI agents to take your orders.

**Sanjay Puri** (0:42)
Karthik, we have a global audience of Chief AI Officers, CIOs, CTOs, and aspiring leaders who are in our audience.
Just very briefly, for people who don't know Yum! but they actually know the brands that Yum! carries, just give them a very brief perspective in what you do for Yum!

**Karthik** (1:04)
So I'm the Director of Data Strategy, MDM and Data Governance for Yum! For folks who don't know Yum! Yum! is a global restaurant company having about 65,000 stores, restaurants across the board. Some of the most popular brands that we own is Pizza Hut, Taco Bell, KFC, and the Habit Burger Grill.
Globally, we operate in about 120-plus countries. 98% of our operations is franchisee operations. So we support a franchisee model.
And before someone asks, my favorite brand is Taco Bell.

**Sanjay Puri** (1:43)
Taco Bell, Cantina.

**Karthik** (1:45)
Cantina.

**Sanjay Puri** (1:45)
Yes.
So Karthik, when people think of consumer brand, whether it's Yum! or some others, they don't naturally associate AI, gen AI, agentic AI with that. Tell us a little bit, how is it being applied? And is AI now an integral part of the organization?

**Karthik** (2:11)
So AI wears a multifaceted lens when it comes to restaurant operations.
And for anyone who is an outsider, who has not worked in a QSR environment, who has not worked in a restaurant industry, from outside it looks very simple. How difficult can it be to sell tacos and pizzas? But when you come inside and you realize that it's a very heavy operationally involved running the business. And that means that there is a marketing arm of it, there's operations, there is legal, because we are franchisee owned and operated restaurants, we are located to our franchisee needs as well.
And restaurant margins in general are very thin. So we are operating on thin margins, but we have economies of scale. So not only AI and machine learning is used to optimize wherever we can. It could be from inventory management, it could be to get more customers, it could be to how do we open our stores, and how are stores being operational, all the way to how do we make our operational efficiencies better as we go day by day. So AI is being used at every part of a customer journey and also an employee journey. So it's just a matter of time where we start unlocking more AI use cases as we go.

**Sanjay Puri** (3:29)
So we will get to a lot of things that you said, but I have maybe different kind of question. I heard that chatbots are going to be used in drive-throughs also. They said, next time you are going through a drive-through, it might be a chatbot that you're dealing with. Is that true?
If I go through Taco Bell and ask for my container, is that a chatbot I'm dealing with?

**Karthik** (3:53)
So why is AI assistance have, people have, the whole industry has been playing around with that for quite a while. A very good example was McDonald's did a pilot with Watson a couple of years ago for drive-thrus. So they piloted it in about 1,000 stores, but they had to roll it back for certain reasons.
But because labor is expensive and someone is taking your order, which is a live human being, and that leads to error rates are high and they're multitasking in the restaurant. So a lot of QSRs have pivoted to start using wise AI agents to take your orders.
And it has done wonderful jobs for them. Like Dunkin Donuts is a good example. They use wise AI too for your order taking. And it's opposite about 99 percent accuracy.

**Sanjay Puri** (4:43)
Wow, 99 percent accuracy. That's pretty impressive.
Karthik, let's talk a little bit about Yum!s. Majority of the operations are franchise operated. So how much can you have an impact? You want to implement certain things.
And then also, the second question is, you also want certain governance standards to be set within the organization and implementation, but you're dealing with third party companies. What are the implications of both kinds of things here?