Wednesday 08 March 2023

4 Disturbing Reasons Why Many New Restaurants Fail

Even if you have amazing food and excellent service, your restaurant could still go under in the blink of an eye. One recent study revealed that nearly 80 percent of all restaurants fail within the first five years, and many of those establishments produce world-class meals. Here is a quick look at four unusual reasons why many restaurants fail and some steps that you can take to avoid those problems.

No Online Presence

Building a strong online presence is going to be absolutely vital to your restaurant’s success. At the very least, you need to set up an account with all of the major social media platforms and create your own website. Many potential customers will never even think about heading to your business if they can’t find basic information on your website or social media accounts.

Untrained Employees

Turnover rates are very high in the service industry, and replacing a single employee could end up costing you huge sums of money. Spending a little extra time on training new employees is going to reduce your turnover rate and help you avoid major staffing issues down the road. Reducing your turnover rate will also improve company morale and create a sense of camaraderie among your staff members.

Failing Health Inspections

Many new restaurant owners don’t realize just how complicated health regulations can be, and that can often leads to infractions, fines, and other expensive problems. If you have never managed or owned a restaurant, then you should spend quite a bit of time researching local and federal health laws. You should also look into commercial pest control to keep your restaurant up to date with policies and health codes. You can also hire an outside company to preemptively inspect your restaurant so that you catch infractions before the official inspection.


It is an unfortunate fact that practically every business owner is going to face at least a few legal issues over the years. While you won’t ever be able to completely protect yourself from legal battles, you can do quite a bit to prevent unnecessary lawsuits. The most effective way to reduce your risk of a lawsuit is to document absolutely everything. You must also set up a world-class training program for your employees so that they understand all pertinent laws and regulations.

Having a solid business plan will drastically reduce your risk of going under, but new business owners need to realize that success rarely happens overnight. Building momentum is going to take time, and you need to be prepared for any roadblocks or pitfalls that you run into.