80% of restaurants fail before their turn 5. Why and How AI can help?

Unlocking Restaurant Survival: How AI Solves Supply Chain Chaos and Financing Gaps

The speaker, Mr. Yassir El Ismaili El Idrissi, Co-founder & Chief Product and Growth Officer at Yassir, highlighted a critical issue in the restaurant industry: 80% of establishments fail within their first five years globally. This high failure rate is often linked to significant supply chain challenges, particularly in regions like Vienna, where customers frequently encounter unavailable menu items due to unreliable sourcing.

Chefs, whose passion lies in cooking, are burdened with managing numerous suppliers, sometimes over twenty different entities. This administrative load detracts from their core culinary focus. Furthermore, suppliers often prove unreliable, especially for small and medium-sized restaurants, which are not prioritized over larger customers during supply chain disruptions, leading to ingredient shortages.

A fundamental problem is the communication gap between chefs and manufacturers. Chefs maintain their own lists and methods for ordering, while manufacturers use different catalogs and systems. This disparity means that only large restaurant chains with dedicated teams can effectively bridge this language barrier, leaving smaller businesses at a disadvantage in procurement.

The proposed solution involves technology that can standardize and scale this conversation. By creating a common language, the system can precisely match ingredients required by chefs with available products from manufacturers. This also facilitates better forecasting, moving beyond manual phone calls for routine orders like chicken deliveries, ensuring timely and accurate supply.

Beyond supply chain inefficiencies, many restaurants, particularly in regions like California, struggle with access to finance. Traditional banks are reluctant to lend due to the industry’s high failure rate and slow payment cycles, often extending to 60 or 90 days. This financial constraint further exacerbates operational difficulties for these businesses.

Yassir addresses this by leveraging data. With access to sales and equipment data, the company can assess risk more accurately than traditional lenders. This data-driven approach enables them to provide financing, allowing restaurants to overcome cash flow challenges and secure necessary supplies, ultimately supporting their survival and growth in a highly competitive market.