Keeping AI Honest: Safeguards Every Restaurant Needs
Earlier this month, Stefanina’s Pizzeria in Wentzville, Missouri, was thrown into turmoil. As dinner rush was in full swing, customers flooded the phone lines, demanding deals like buy one, get one for $4 or pay for a small, get a large. For a family-owned restaurant, those kinds of offers sounded too good to be true. And they were.
The specials didn’t exist. An AI system had simply “hallucinated” the offers, publishing false promotions with the same confidence as if they were real. What should have been a busy but ordinary night turned into chaos, as staff scrambled to explain to frustrated customers that the deals they were demanding were pure fiction. “We’re like, ‘What are you talking about?’” recalled manager Eva Gannon.
For a neighborhood restaurant that’s spent 25 years building customer loyalty, the incident was more than just an annoyance. It was enough to shake trust, disrupt service, and throw off the rhythm of normal operations. And Stefanina’s isn’t alone. From local stores to national chains, restaurants are learning the same hard truth: when AI gets it wrong, the fallout doesn’t stay online. It shows up in the kitchen, at the counter, and on the bottom line.
Hallucinations Are Harmful
A “hallucination” in AI occurs when the system generates false information and presents it as fact. To engineers, it’s a technical quirk. To diners, it feels like deception.
Restaurants operate in a world where accuracy matters: prices, menu items, and allergy details must be correct every single time. When restaurants rely on AI tool that invents a special, a gluten-free option, or a loyalty discount, it’s not a harmless mistake; it triggers tension at the counter, angry phone calls, and potential safety risks.
Stefanina’s case shows how quickly a single AI mistake can erode customer trust and throw operations into chaos.
Building Guardrails with GRACE
While restaurants can’t control every digital listing, they can control the AI agents they put in front of guests. That’s where systems like GRACE come in.
GRACE (Guardrails, Red Teaming, Application Security, Compliance, Escalation) is Palona’s safety framework for AI ordering agents, designed to keep interactions accurate, reliable, and secure.
With GRACE, AI agents don’t make up answers. Every response is grounded in verified menu data, monitored in real-time for anomalies, and escalated to a human when needed, so misinformation never reaches a guest.
An ordering agent built on GRACE would have kept Stefanina’s phone lines calm, sharing only the promotions the restaurant had approved and protecting staff from needless frustration.
Securing Trust Before Scaling AI
AI isn’t going away. Guests will keep turning to it for menu searches, promotions, and orders. The real challenge for restaurants is to make sure the technology strengthens relationships with customers instead of straining them.
The story of Stefanina’s highlights a universal risk: whether you’re running a neighborhood pizza shop or a growing chain, deploying AI without safeguards exposes operations and puts brand trust at risk. The businesses that thrive will be the ones who match innovation with systems designed for safety, reliability, and trust.
At Palona, we believe the future of restaurant AI depends on getting those fundamentals right. If you’re ready to protect trust while scaling innovation, we’re here to help.
Maria Zhang
CEO, Palona.ai
