Dive Brief:

• Papa John's franchisees will be adopting an artificial intelligence phone system launched by voice AI company kea. The new platform, Indecisive AI, integrates into restaurants' pre-installed ordering systems to manage phone orders, the company announced Thursday in a press release emailed to Restaurant Dive. 
• The platform combines artificial intelligence with human operators to ensure restaurants don't miss orders. Kea is in place at more than 250 restaurants and chains, including Papa John's, Primanti Brothers and Donatos Pizza. The company plans to expand the system to 1,000 restaurants across 37 states by 2021.
• According to kea, the AI also learns menu items and inventory to upsell items that pair well with new orders. This upselling ability yields tickets that are 20% to 40% higher on average, kea claims. Ability to upsell is one of the reasons McDonald’s was attracted to Dynamic Yield when it purchased the AI company last year for $300 million.

Dive Insight:

Driving orders directly to restaurants' native channels circumvents third-party commission fees, which can be as high as 20% to 30% per order. 

Papa John's offers both direct delivery and delivery through major third-party platforms. During the company's Q3 2020 earnings call, CEO Rob Lynch said that an increase in drivers will help manage labor and throughput for orders, and sales through third-party channels have risen from 2% to 6% of sales in the last six months. Using kea's technology will also help franchisees ease labor and throughput burdens by freeing employees up from answering phone orders, allowing more time for pizza production and other tasks. 

Kea's human phone operators can also take over calls in case the AI system can't accommodate a customer's needs, or if the customer simply prefers to speak with a person instead of an AI system.This happens 20% to 30% of the time, according to the company. It takes the system only about two weeks to learn all of a company's menu items and inventory, and Kea allows diners to customize their orders. 

Streamlining operations has been a key focus for Papa John's of late. The chain recently invested in restaurant technology that flattens pizza dough and reduces 40 seconds of the production time of each pizza, for example. It also added a call center in March to manage orders that come to stores via phone, a move meant to free up employees to make pizzas or fulfill deliveries.

This new AI system could also deepen customer loyalty for operators, since Papa John's rewards members can earn points by placing phone orders when they provide the phone number associated with their account. During its Q3 earnings call, Lynch said the chain's loyalty program and "one-to-one marketing platform is also a growth driver and strategic technology priority for us," adding that those loyalty members “drive outsized revenue" compared to non-loyalty members. Not only do they drive higher ticket averages, but also higher frequency.

Correction: In a previous version of this article, Kea's relationship to Papa John's was misstated. Kea has partnerships with Papa John's franchisees, not Papa John's corporate.