Freshii is a popular Canadian fast-food chain that serves burritos, wraps, soups, salads, and frozen yogurt.
In a move to reduce labor costs, the Toronto Star reported last week, Freshii has just introduced a new in-store ordering system that will connect its customers to cashiers outside the country, most of whom are located in Nicaragua, where workers are paid about $3.75 per hour.
Anyone who’s ever been connected to a foreign call center knows how aggravating the experience can be at times. Imagine trying to order fast food this way.
Thankfully it looks like, for now, only Canadians will have to deal with the frustration this could bring. So far, the system has been rolled out in a small number of stores, all located in Ontario, where the company is headquartered, the Star reported.
As of Dec. 31, Freshii had 343 stores in North America (49 in the U.S.). It also operates locations in South America, Europe and even Saudi Arabia, but according to its year-end report, these locations contribute only a small amount to the company’s total revenue.
According to the Star, the video-calling device, dubbed “Percy,” is attached to cash registers and lights up when a customer is detected. “A cashier wearing a headset,” located 2,500 miles away appears on the screen to take the order, the Star reported.
Freshii’s “virtual cashiers are part of a wave of outsourcing and automated technology that is slowly changing Canada’s retail industry,” the Star reported.
Company representatives declined to “provide details” to the Star about the new ordering system, but Freshii’s chief business development officer Paul Hughes said in a statement:
“Just like with Uber Eats, Skip the Dishes, self-checkout options and other emerging ordering/cashier technologies, Freshii is always looking to be an early tester and adopter of new tech solutions that might make it easier for our customers to order healthy meals and our franchise partners to run more successful restaurants.”
He also told the Star that “Percy is operated by a third-party company.”
The Nicaraguan call center pays about $4.80 an hour in Canadian dollars. (A Canadian dollar is about 77 cents in U.S. currency.)
The Star listed the average hourly rates of call center workers (in Canadian dollars) in other countries for comparison. A worker in India earns $0.35 per hour, in the Philippines, $1.65 per hour, and in Bangladesh, $0.11 per hour. Clearly, the opportunity to save big on labor costs is hard to resist for some companies.
So, by outsourcing the ordering function, Freshii will save more than $10 (Canadian) per hour, which is a significant reduction, but at what cost?
Will customers be put off by the experience? Possibly.
Business News Daily points out that problems can arise due to “language and cultural barriers, technology differences [and] customer experience.”
I suppose it depends on the individual operator’s command of the English language. If communication is difficult, customers may become alienated.
If Freshii insists on lowering labor costs, might an automated system make more sense? It could be more efficient and result in less customer dissatisfaction than using foreign operators.
But companies still have to make business decisions that make sense:
Companies need to make a profit, that money get’s reinvested. This is the way private companies work, if minimum wage goes up, companies have to find a way to cope, either prices go up or costs get cut. Get over it. https://t.co/gdh6kPZga4
— Jim Murphy (@JimMurp77852985) April 26, 2022
Naturally, the company has come under fire from labor organizers, according to the Star, who view outsourcing as a way to “circumvent Ontario’s minimum wage laws.”
President of the Canadian Labour Congress Bea Bruske told the newspaper, “Shipping jobs to an offshore location to pay less than a third of our minimum wage here is just extremely disappointing, and, quite frankly, I’m disgusted a company like Freshii would take this approach.”
“We need jobs that pay taxes in Canada and that help boost our economic activity,” she added.
The Star spoke to Ontario Minister of Labour, Training and Skills Development, Monte McNaughton, who sees Freshii’s virtual cashier program as “outrageous.”
In a statement, McNaughton said: “This … moves entirely in the wrong direction. I expect better from a Toronto-based company and know customers will vote with their feet.”
Whether it’s outsourcing jobs to foreign countries, or using automated systems that don’t require paying human employees, companies even in customer-intensive businesses like fast-food operations will always have other options.
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