In don’t believe a failed Pizza Hut AI rollout cost a franchisee $100 million in losses. But I can see how it would have had a major impact on business – given the circumstances. Especially when you own and operate more than 100 Pizza Huts across 4 States and DC…
Chaac Pizza Northeast is a major regional restaurant company operating under the Chaac Foods / Four Leaf Ventures corporate banner, in Maryland, Pennsylvania, New York, New Jersey and Wash-ington, D.C.
That’s a lot of pizza. And the company claims it lost $100 million when Pizza Hut insisted on imple-menting its Dragontail AI ordering system. And forced Chaac to keep using it after the franchise operator begged PH to get rid of the system.
What happened?
Simply put, the Dragontail turned out to be an albatross. Which hung a soaring number of ‘late’ de-liveries around the franchise’s neck. According to the lawsuit, “claims that before Dragontail was brought in, over 90 percent of deliveries arrived within 30 minutes, but the AI system led to, ‘slower delivery times, colder product (caused by delays), and reduced customer satisfaction’.”
Even worse…
… Was the fact that many Door Dash delivery drivers could see, via the system, when pies were com-ing out of the oven. And – human nature being the nasty, brutish thing that it is – waited for multiple orders to be ready before grabbing them and heading out the door.
Chaac claims that the number of late- and cold-order complaints soared.
‘Therein lies the rub’
… As Hamlet might have said. It wasn’t the Dragontail system that caused the problem. It was a failure by Door Dash to manage its employees effectively. And that’s what I think Pizza Hut’s lawyers will argue in court.
My take
If I’d been on the board at Chaac when this issue came to its inevitable head, I would have stomped Door Dash and its deliverers, not Pizza Hut. The delivery service is where the problem really lies.
General George Patton was confronted, during the WW II campaign in Italy, with reports of massive looting by American troops. His solution? “Shoot the first three you catch, and there won’t be any more…” Door Dash, of course, can’t do that. But it can and should make an example of those who fudge the system for their own convenience. It would serve DD right if it lost Chaac’s business over this debacle…
~ Maggie J.