Ziosk’s E-Waiter Device Brings Technology to Restaurant Dining Rooms

6/24/14Follow @angelashah

Bringing technology into a restaurant’s dining area is a matter of child’s play.

Or, at least the child in all of us. Turns out that $1 tries at games like “7 Little Words,” “Field Runners” or “Operation Math” can add up to enough dough for a restaurant to pay for the installation of “pay-at-the-table” tablets from Dallas-based Ziosk, which makes and sells the eponymous devices. “It more than covers the subscription costs,” says Austen Mulinder, Ziosk’s CEO.

That realization didn’t come to company executives until about four years after Ziosk was founded. Sharing gaming revenues with restaurants—and thereby helping their customers find a funding stream that would pay for the devices—proved to be a strategy that helped propel the installation of 55,000 ziosks into 1,000 restaurants nationwide. The company recently installed more than 45,000 tablets in 823 Chili’s Grill & Bar restaurants owned by parent company Brinker International.

“They have fairly tough margins and a lot of rising costs. It was proving too hard for restaurants to find cash to buy the devices,” Mulinder says. “Customers paying for the games went to fund the deployment of the network.”

Essentially, it works like this: The restaurant uses revenues from the games to pay for the subscription. The remainder of the revenue is split between the restaurant and Ziosk. Mulinder says there is always more than enough revenue from the games to both pay for the subscription and have money left over. “It doesn’t cost them anything,” he says. “Also they have a new revenue stream.”

Ziosk’s devices are 7-inch Android flatscreen tablets that sit on tables at casual dining restaurants, enabling customers to place food and drink orders— and to pay for it all when they’re finished—without the need for a waiter to come by, introduce himself, and mumble through the day’s specials. Orders are relayed back to the kitchen through a Wi-Fi connection.

Mulinder stresses that the devices are not there to replace workers. After all, restaurants still need staff to bring food to the table and to accommodate requests like extra ketchup for your fries. “Because the guest is now managing some part of the process, servers have more time to pay attention to serving that guest,” he added.

From a manager’s point of view, Ziosk’s killer app, so to speak, is that automating the ordering process actually results in customers spending more money on menu items, Mulinder says. For example, when left to their own devices customers order 30 percent more desserts. (At Chili’s restaurants, Ziosk flashes high-definition photos of cinnamon molten cake or brownie sundae during the meal, which seems to be far more persuasive than a human waiter.)

Customers also are more willing to provide feedback when they have fewer interactions with other humans, Mulinder says. Whereas less than 1 percent of diners will respond to a paper or prompt for an online survey, he says about two-thirds of them will give feedback via a Ziosk.

With more than 200,000 casual dining restaurants in the United States, other tech companies also see restaurants as an attractive customer base. Chili’s competitor Applebee’s plans to install by year’s end 100,000 tablets made by E la Carte. The Palo Alto, CA company was founded in 2009 and last year raised a Series B round of $13.5 million from investors such as Romulus Capital in Cambridge, MA, and Intel Capital.

Mulinder would not disclose how much funding Ziosk has raised. He says investors in the company include founders like Jack Baum, himself, and angels.

Ziosk began as an assignment for company Baum’s MBA class at Dallas’ Southern Methodist University seven years ago. In fact, Baum liked the idea so much he joined the three students who had pitched it to found the company, then called Tabletop Media, to sell devices to restaurants that automated the ordering process. But when sales weren’t growing as they had expected, Baum brought in Mulinder, a Ziosk board member and a Microsoft veteran, to become CEO. It was Mulinder’s idea to use games as a revenue stream that helps restaurants pay for the device.

The Ziosk device “is a transformational opportunity for restaurant managers,” he says. “They’re on a learning journey right now. We see the potential to do something special and are now engaging with their service systems and the way they train staff.”

Angela Shah is the editor of Xconomy Texas. She can be reached at ashah@xconomy.com or (214) 793-5763. Follow @angelashah

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