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In this episode of Food for Thought Leadership, Food Institute Chief Content Officer Kelly Beaton steps in as guest host to interview Fransmart CEO Dan Rowe on the evolving restaurant labor market. Rowe challenges operators to view labor not as a cost to minimize but as a strategic investment, noting that the most successful brands are those that “staff for the sales they want” and prioritize retention, engagement, and culture amid ongoing workforce constraints.
The discussion also touches on how to attract and retain Gen Z workers through flexibility, transparency, and clear growth paths, alongside practical insights on AI adoption in restaurants. Rowe emphasizes that operational uses of AI—like improving efficiency and accuracy—offer the greatest value, while expressing optimism that strong, well-run brands will continue to thrive despite broader industry challenges.
Transcript (Edited for Brevity/Clarity)
Labor as a Strategic Advantage
Kelly Beaton: What labor market signals are you watching right now that operators may be overlooking?
Dan Rowe: “Labor is brutally tight and it’s tough no matter how you slice it, but there are plenty of chains that are still thriving right now dealing with the same issues. So the ones that actually look at labor as a strategic advantage, not a cost, those are the ones that are thriving.”
Dan Rowe: “Most operators are trying to think about a low labor cost… they try to figure out how to improve my labor costs, and then you basically pay as little as you have to possibly pay for your staff. And then you wonder why you have turnover.”
Dan Rowe: “The people that are actually investing in a sound strong base are the ones that are growing… you can’t have high sales if you don’t have the labor to execute it.”
Lessons From Past Labor Cycles
Kelly Beaton: How does today’s labor environment compare to previous cycles?
Dan Rowe: “I feel like there’s always something challenging about labor… back in the dot-com era, it was tough to get people… then Amazon was hiring and paying all this money. There’s just always something.”
Dan Rowe: “To me it’s no different, and it’s just a puzzle that you have to solve… plenty of people have already solved this puzzle and are doing just fine right now.”
Fixing the Right Metrics
Kelly Beaton: If you were advising a struggling operator, what’s the first labor-related metric to fix?
Dan Rowe: “They have to staff for the sales that they want in the company that they’re trying to build. If they’re trying to save every penny that they can, don’t do it in labor.”
Dan Rowe: “The most profitable customer is a repeat customer… they’re not going to come back if the staff doesn’t make them feel good.”
Dan Rowe: “So many people hire a manager and don’t let them manage… you have a bunch of disconnected employees who either aren’t functioning or aren’t staying.”
Attracting Gen Z Workers
Kelly Beaton: What resonates with Gen Z workers today?
Dan Rowe: “You’ve got to be transparent and flexible… we publish schedules two, three, four weeks out… we have shift swap apps that make it easy.”
Dan Rowe: “They want to know about real growth paths… every 90 days they should have another certification or a small raise.”
Dan Rowe: “A big thing is authenticity and purpose… they feel connected to that mission.”
Retention Over Recruitment
Kelly Beaton: What are some underrated retention strategies?
Dan Rowe: “Same week or same day pay… let them have the money… a visible career ladder… show them milestones and pay increases.”
Dan Rowe: “Retention is 10 times cheaper than recruitment, so once you have really good employees, you’ve got to make them feel like they want to be there.”
Dan Rowe: “People quit bosses. They don’t quit jobs… if you have a terrible manager… they’re not staying.”
AI and Operational Efficiency
Kelly Beaton: Where are the best practical uses of AI in restaurants today?
Dan Rowe: “Most technology doesn’t work as advertised… but operations is where the real money is. Optimize operations with technology.”
Dan Rowe: “I would use it for AI demand forecasting, smart scheduling, voice ordering… inventory and prep recommendations.”
Evaluating Tech Investments
Kelly Beaton: How should operators decide if labor-saving tech is worth it?
Dan Rowe: “Who’s using it… where did they get the ROI… does it pay back in 12 months?”
Dan Rowe: “Does it make the guest experience better… can my managers explain it in one minute?”
Outlook for the Industry
Kelly Beaton: What gives you optimism for 2026?
Dan Rowe: “I’m as optimistic now as I’ve ever been. I think the pain is forcing real innovation.”
Dan Rowe: “High sales means customers like brands. High profit means the model works… the restaurant industry is not dying. Everybody wakes up hungry.”
