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-   -   Why do restaurants close? (https://www.discusscooking.com/forums/f17/why-do-restaurants-close-43965.html)

auntdot 03-06-2008 09:37 PM

Why do restaurants close?
 
Everyone on DC has seen restaurants come and go.

Went on the web and it does not seem to be too much of an overestimate that 50 percent or so of all new restaurants close in the first three to tive years. And from the stuff on the web that may be a conservative estimate.

I am just curious as to why some restaurants seem to make it and others do not.:wacko:

GB 03-06-2008 09:44 PM

There are too many reasons to list, but here are just a few...

Bad location
Bad food
Bad service
Wrong type of food for the location
Bad parking
Word of mouth after a bad experience

and many many more.

Uncle Bob 03-06-2008 09:53 PM

There really are dozens of reasons. IMO the number one reason why any business fails is because the entrepreneur does not really know what they are doing. They think they do.

CanadianMeg 03-06-2008 10:11 PM

I think burnout and unrealistic expectations by the owner starting the business can be a factor. I definitely agree about poor location and poor food. Of course, there's always the health factor; there was a place here that kept giving everyone food poisoning and, as you can imagine, I think they were ordered to close.

Andy M. 03-06-2008 10:33 PM

I have heard the failure rate for new restaurants is in the the range of 90%.

Sometimes a great chef is a bad businessman.

Maverick2272 03-06-2008 10:38 PM

That is what I have heard as well, Andy.

Poor pre-planning (IE doing your homework first to understand your customers and their needs) seems to be another major factor in restaurant closing.

Michael in FtW 03-06-2008 10:42 PM

GB, UB and CM covered most of the basics. Something else is management and having sufficient financial capital to see you through the first 2-3 years to get established.

And, then, you have stupid stuff like a great little BBQ joint over in Dallas is suffering thorugh, a showstring operation that has good food and location, but copper theives had hit them about 4 times in the past year .... and that has shut them down for a month or two each time.

PastaKing 03-06-2008 10:49 PM

Quote:

Originally Posted by Andy M. (Post 562675)
I have heard the failure rate for new restaurants is in the the range of 90%.

Sometimes a great chef is a bad businessman.

You are so right. A very good friend of mine was the personal chef to Donald Trump. He was making $250,000 a year!

When the time came to re-new his contract, he said no and went in business for himself. In his restaurant he had pictures of all the great people he cooked for. Presidents, celebrities, sports players, and yes, Donald Trump.

He was in business for about 10 years. Everyone thought he was doing fine. Then one night he burned the place down. Now he lives in Italy because he knows that if he comes back, he is going to jail. turns out that business was only good for the first 3 years or so. He started going on long vactions and letting his business fail. He tried to rebound and borrow some money but by then the business already had a bad name. He could not recover.

My point is that no matter how good you are, business can always go south for whatever stupid reason, but you have to stay on top of it. This I think is the main reason so many restaurants go out.

Michael in FtW 03-06-2008 11:10 PM

PastaKing - that brings up another problem ... which goes back to poor kitchen management - when the chef becomes a "celebrity" and spends more time out in the front of the house smoozing with the ladies than managing what is going on in the kitchen!

The first two names that come to mind are Gordon Ramsey (he admits it) and Rocco DiSpirito (he denies it).

Another problem is "theme" restaurants that go out of style. There was a fantastic Polynesian restaurant in Dallas back in the late 1960's called "Ports O' Call" (maybe it was Ports Of Call) that was riding on the popularity of Polynesian drinks - Mai Tai, Piņa Colada, etc.

sattie 03-06-2008 11:15 PM

Quote:

Originally Posted by Michael in FtW (Post 562679)
GB, UB and CM covered most of the basics. Something else is management and having sufficient financial capital to see you through the first 2-3 years to get established.

Exactly!! I think that is the main reason. Then the rest play a factor as well, but all are correctable if you are really trying. I see it happen all the time around here. I have seen one location become 5 different resturaunts, I always wonder exactly how long they will last and who will be the next in line to try. It's a tough business to break into and be successful in.

ChefJune 03-06-2008 11:16 PM

One of the biggest reasons for failure of new restaurants is inadequate financing. It takes time to build a clientele, but the rent still has to be paid, and all the other bills as well. so any new restaurant needs cash behind it to ride out the lean time until it catches on (if it's going to). too many restaurants open on a shoestring. A few make it like that, but it's the exception, not the rule.

AMSeccia 03-06-2008 11:25 PM

There is also an awful lot of internal theft. Huge theft, from food to booze to cash.

Dave Hutchins 03-07-2008 12:00 AM

I owned a thriving restaurant in a small Northern Iowa town was making good money and paying all of my bills.. Then the Iowa department of transportation( idiot)built a bypass around the town and in three years I went broke to the tune of mega dollars.
so it is not all ways bad food, management, bad vibes. Something completly out of your control does happen to give you the green weenie.

Fisher's Mom 03-07-2008 12:10 AM

Quote:

Originally Posted by Dave Hutchins (Post 562714)
Something completly out of your control does happen to give you the green weenie.

:rofl::rofl::rofl::rofl: I have never heard this phrase before but I think it's gonna be my favorite now, Dave! But I am sorry about your restaurant.

Michael in FtW 03-07-2008 01:06 AM

I know what you're talking about Dave. Down here I guess we would call that "Route 66 Syndrome"?

Jeff G. 03-07-2008 08:26 AM

From an ex-restaurant owning family(closed due to my mom retiring). I can say this. If you server GOOD food and have GOOD service for reasonable prices you can make a go of it. You can never serve bad food or bad service. One bad experience will haunt you for a long time. multiple bad service will kill you..

Don't expect to make a lot. Cook cheap, but cook well! do a lot of work yourself. EXPECT to be there all the time for the first few years.

The ones that don't make it usually one of the following.. poor ideas on how its run. Serve food that isn't good, have poor service, too specialized of food(i.e. pannini sandwiches only... etc).

We have a restaurant that is struggling. They only served pressed grill sandwiches with very little on them for big dollars.. Gee, wonder why they aren't making it...

GB 03-07-2008 08:49 AM

Quote:

Originally Posted by Jeff G. (Post 562823)
You can never serve bad food or bad service. One bad experience will haunt you for a long time. multiple bad service will kill you..

I have to disagree with the word never in the above quote. There are exceptions to the rule, specifically when it comes to bad service. I have been to a number of thriving restaurants who have had atrocious service and it was known that these places have atrocious service, but because the food is so good people put up with it.

If you have bad food then no one has a reason to visit your restaurant, but bad service can be overcome if your food is good enough.

*amy* 03-07-2008 12:34 PM

Quote:

Originally Posted by auntdot (Post 562656)
Everyone on DC has seen restaurants come and go.

Went on the web and it does not seem to be too much of an overestimate that 50 percent or so of all new restaurants close in the first three to tive years. And from the stuff on the web that may be a conservative estimate.

I am just curious as to why some restaurants seem to make it and others do not.:wacko:

Competition could be one reason restaurants come & go. In my neck of the woods there are so many restaurants competing w one another, it's hard to choose. Unless you have something new/different that sets you apart from your competition, you may fail (possibly w/i the first year). Not enough publicity or a bad review (for those that follow reviews), may also have something to do w being successful. I like trying new restaurants, but find some of the newer/trendier restaurants are pricey & the portions are small. If the restaurant does not take reservations, & there's an hour wait at the bar, chances are I won't return, unless the food is exceptional. Parking is another factor. Some of my faves are the ones that I've gone back to over & over again, because I enjoy the food/atmosphere & the price is right, & know that I won't be disappointed.

goboenomo 03-07-2008 12:45 PM

Quote:

Originally Posted by auntdot (Post 562656)
Everyone on DC has seen restaurants come and go.

Went on the web and it does not seem to be too much of an overestimate that 50 percent or so of all new restaurants close in the first three to tive years. And from the stuff on the web that may be a conservative estimate.

I am just curious as to why some restaurants seem to make it and others do not.:wacko:

I had a friend whose father opened a restaurant. His closed because of location. His restaurant was tucked behind a subway. Most people I told about the place, said they couldn't find it.

Jeff G. 03-07-2008 03:18 PM

Quote:

Originally Posted by GB (Post 562828)
I have to disagree with the word never in the above quote. There are exceptions to the rule, specifically when it comes to bad service. I have been to a number of thriving restaurants who have had atrocious service and it was known that these places have atrocious service, but because the food is so good people put up with it.

If you have bad food then no one has a reason to visit your restaurant, but bad service can be overcome if your food is good enough.

OK, never might be a little harsh, but it better be almost never for me.

I will say this if I eat at a restaurant and get bad service twice in a row, I let the management know and I don't eat there again until I hear they have improved the situation. I also let people know if they ask my opinion. Word of mouth can be very powerful.

In my opinion people should not continually patronize restaurants that have poor service. Poor service shows a disrespect for the patron.

Oh, should have added Location, Location, Location--key to success..

GB 03-07-2008 03:19 PM

You and me both Jeff :lol:

DramaQueen 03-08-2008 11:34 AM

Quote:

Originally Posted by Jeff G. (Post 563032)
OK, never might be a little harsh, but it better be almost never for me.

I will say this if I eat at a restaurant and get bad service twice in a row, I let the management know and I don't eat there again until I hear they have improved the situation. I also let people know if they ask my opinion. Word of mouth can be very powerful.

In my opinion people should not continually patronize restaurants that have poor service. Poor service shows a disrespect for the patron.

Oh, should have added Location, Location, Location--key to success..

I couldn't agree more about not patronizing a restaurant with bad service. If you do, you deserve what you get. Bad service. I'll bet the people who go to these restuarants and get treated like vermin can't wait to get their tip money out. Shame on them. Why would anyone bend over to give good service, when not only do people continue to go there, but they tip the wait staff to treat them like dirt? Not tipping the full amount? Oh okay, I'll reward you just a little bit for bad service. Not this lady.

buckytom 03-08-2008 11:40 AM

has no one heard of the three l's of business? location, location, location.

ok, 'spanding upon that, you have to, (stealing a line from the kinks) "give the people what they want".

to answer auntdot's question, chefjune was dead on. it's about early financing. but to add the basic variable in the equation, it's about demand and location as well.

*amy* 03-08-2008 12:05 PM

Here's another possible reason why restaurants close:

Babu Bhatt aka Brian George Biography and Filmography on Seinfeld


:lol:


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