The fear of technology killing jobs in the restaurant industry maybe widespread, but Fatburger CEO Andrew Weiderhorn said automation is boosting the burger business without shrinking the labor force.
“Certainly automation is something that moves business forward. We’ve seen it increase our sales. It really hasn’t decreased our labor at all,” he said.
However, Weiderhorn said automation has resulted in the reallocation of labor.
“We have more orders--maybe less people taking orders but more people cooking the food--so it really hasn’t cut our labor at all,” he said.
On the other hand, Weiderhorn said there is a “real issue” when it comes to labor costs.
“Everyone must have known what they were getting into when they voted in favor of their politicians wanting minimum wage increase. And everyone wants their employees to make more money,” he said. “But if in the restaurant industry, your labor costs are 30% and you’re going to increase it from $10 to $15—a 15% increase, now you’re going up to 45% and so consumers are going to have a price increase because a restaurant operator can’t afford that bottom line.”
Despite this, Weirderhorn said the company, which currently has 200 stores globally, saw sales rise significantly last quarter. He plans to take the company public within a few weeks and will trade under the symbol FAT.