How Quick-Service Restaurants Can Cut Energy Costs

    In an industry with tight margins, any reduction could dramatically boost returns. 

    Restaurant dining room.
    Adobe Stock
    Quick-service restaurants are the most energy-intensive buildings in the U.S.

    According to Research and Markets’ Fast Food Industry Analysis and Forecast, the global fast-food market is expected to reach $931.7 billion by 2027, rising at a CAGR of 4.6%. Additionally, the report states that in 2019 the largest global fast-food market share (42.6%) was held by quick-service restaurants.

    With nearly half of the fast-food market share, it’s easy to see how quick-service restaurants are the main drivers of growth. But with all this growth comes exceptionally high operating costs. DTE Energy asserts that quick-service restaurants are “the most energy-intensive buildings in the U.S. They use an average of 81 kilowatt-hours (kWh) of electricity and 174,000 Btu of natural gas per square foot each year. In a typical quick-service restaurant, refrigeration, lighting, and cooling make up about 55% of total energy use.”

    Clearly, cost-saving measures that reduce quick-service restaurants massive energy consumption must be implemented to curtail expenses for franchise owners. In an industry that traditionally operates on narrow profit margins, any reduction in energy costs will dramatically boost returns. The good news is such energy-reduction options are available today—at zero out of pocket cost.

    Plugging Into Quick-Service Restaurant Energy Use

    Quick-service restaurant operators already use a plethora of digital tools to run their business, from integrated Point-Of-Sale (POS) systems to intuitive software for scheduling, payroll, and inventory management. There always seems to be an app for that when it comes to gathering data and streamlining work. Similarly, Energy-as-a-Service (EaaS) programs lower operating costs for quick-service restaurant owners at each location while potentially giving them detailed daily and monthly data about all of their franchises grouped by state, city, brands or looking at an entire empire.

    Outsourcing entirely is no different than having a distant firm handle your payroll. You wouldn’t think of cutting payroll checks or worrying about weekly tax filings. The latest advance in EaaS is firms that will allow a quick-service restaurant owner to outsource his or her entire energy and electrical operations to the provider, who then pays for any audits, engineering, and equipment installations and takes on the risks and responsibility of saving energy and keeping everything running for the contract period - usually 10 or even 20  years. The EaaS provider guarantees the quick-service restaurant owner a set amount of savings on their energy usage for every month and eliminates all worries about all electrical components in the shop.

    A good EaaS provider breaks down a quick-service restaurant’s total energy use into individual components to determine the ideal devices and systems for optimizing efficiency. HVAC units are often old and poorly maintained, making them far less efficient than modern models, resulting in bloated energy bills and inconsistent temperatures—which can be an indicator of a pending breakdown. The same can be said for inefficient fluorescent lighting, which buzzes and flickers annoyingly before inevitably failing. When these items fail, there’s often a frantic search for repairs and parts that come with an expensive price tag. In addition to these spur-of-the-moment fixes, the poor atmosphere these issues cause come at the expense of customer comfort and brand reputation.

    In addition to HVAC and lighting, aging kitchen appliances such as refrigerators, freezers, ice machines, steam cookers, fryers, and ovens all consume huge amounts of energy. When added together across an entire franchise, these represent an enormous utility expense. EaaS providers monitor power use and automate operations to peak efficiency through the use of IoT sensors whose data is collected to alert users (via SMS text messages) when established power thresholds are breached, such as occurs when a freezer door is open or a fryer is left on.  

    The best EaaS vendors go beyond basic power monitoring by providing a cloud-based portal that lets quick-service restaurant owners visualize power consumption or control their energy settings all from a single digital device.

    The single view into all energy consumption is often the first time franchise owners see their total power consumption; because manually calculating energy use from individual devices (fryers, HVAC, lighting, refrigerators, etc.) across an entire franchise, would be extremely time-consuming if not impossible. Now, along with one POS and payroll system, quick-service restaurant owners can have one energy monitoring system giving them a singular power consumption view into all locations—regardless of where the individual restaurants are located or what power utility is doing the initial billing. 

    There is one EaaS vendor that gathers data from IoT-connected restaurant devices and securely sends the information to their cloud platform (e.g., Amazon Web Services) to offer a holistic portal view into a quick-service restaurant’s energy consumption. But this goes much deeper than mere views. Data gathered from HVAC and refrigeration operations such as fans, condensers, or runtimes are all calculated to form a baseline. If a baseline measurement is exceeded for an extended period of time, an alarm is triggered to notify customers of a potential issue. In some cases, a qualified  technician can remotely adjust components to bring them in line with specifications. If not, they can notify restaurant managers to visit the location for manual adjustments. This same threshold monitoring can also be applied to other areas such as lighting, grills, and fryers.

    For a quick-service restaurant franchise, DIY is not an effective energy management solution: complex, time consuming and ultimately likely to go very badly. There are so many power-consuming components that must be dealt with. Why would any franchise owner choose to waste valuable time and resources to research and select the best IoT sensors, establish partnerships with AWS and national HVAC/LED vendors when it can be integrated into a single service? You have certainly already outsourced your POS system, and probably your Drive-Thru POI systems. Why not outsource another of your largest expenses—power?

    Perhaps the most compelling reason to explore EaaS solutions is that the top providers currently offer a true, zero out-of-pocket-cost experience.

    Stop trying to manage it all on your own and let an expert EaaS provider reduce costs for your organization while preserving your brand’s reputation by taking care of the power-related aesthetics and food preparation devices.

    As founder and CEO of Budderfly, Al Subbloie is focused on disrupting the Energy Management space through a unique and highly compelling Energy as a Service technology solution. His 35 years of experience include founding 3 companies and serving as Board Member on several successful software and managed services companies. Al is passionate about creating highly successful, disruptive go to market growth models.