10 Reasons Why Restaurants Fail

There is a general idea out there that restaurants fail more than other businesses. This is actually not true. Statistics show that restaurants fail at about the same rate as do small retail shops. However, there is still a very high percentage of restaurant failures. According to the National Restaurant Association, 59-61% of restaurants close their doors in the first three years. That is an alarmingly high number. And there are many reasons why this is the case. I have pared it down to ten:

1) Poor location

2) No clearly defined market or a clearly defined concept

3) Ineffective marketing

4) Inconsistent or poor product

5) Inconsistent or poor service

6) Not controlling costs

7) Not collecting revenue

8) Fraud

9) Strain on family

10) Inadequate capital


I know these come across as just buzz words, but these are the real reasons why restaurants often don’t make it. I want to go into more detail on each of these, but I also don’t want to put you to sleep, so I will break them down one at a time in future posts.


2 Comments Add yours

  1. Lucie says:

    Thanks for every other excellent article. The place else could anyone get that type of
    information in such a perfect approach of writing?
    I’ve a presentation next week, and I’m at the
    search for such info.

  2. Diane Miller says:

    Confusing concepts! Like Sweet Tomatoes, I never did find the protein. I`m hungry!

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