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9 Common Reasons Why Restaurants Fails - Fooditter

9 Common Reasons Why Restaurants Fails


Why restaurant business is so tough? It has been observed that more than 60% of the restaurants fails within the one year of opening and more than 85% fails within the five years of shorter shelf life. To survive in this industry everyone knows that restaurants need much more than Mom’s classic recipes touch.Here are the reasons where each restaurant has to focus to be successful and if it is avoided it will increase the failure rate. 


Location of your restaurant decides your destiny at the very first place. If you choose the wrong place your restaurant is doomed to fail from the very start. There are many reasons why location should be taken into consideration such as Poor visibility, insufficient parking space, strong competitive environment and limited foot traffic. These all parameters should be keep into eye before opening the restaurant otherwise everything starts to fall from the building of business.


Implementing the customization restaurant ordering system reduces your manual efforts and increases quality of operation. If you choose the wrong system, which increases your workload, staff members are unaware functionality and not able to use them optimally then it creates over expenses to your business to maintain that system without any profit generation out of it. So after studying entire market systems one should opt for most suitable system.


Keep your enemies closer than your friends. This is where every restaurant lags behind. They open a  restaurant without doing competitive market research. Three out of every five new opening are without observing market trends. What cuisines their competitors are providing, how they are performing their operations, what restaurant pos system they are using, what is their specialties all these areas should be focused before forming any market strategy for the business.


What retains customers is the better service rather than food. If restaurant staff is disengaged, restaurant is unclean or not organized, poor food quality etc. then customers will never come back. Rather than spending more time on food research, interior and also the price of the menu, restaurant owner should spend more time on thinking from customers’ perspective.


Profitability analysis and inventory control is an important task of every manager or owner of restaurant and bar, which must be carried out regularly in order to prevent theft and reduce unnecessary costs.

It has been shown that the average monthly bar lost is about 20% of its sales. This means that you lose a $4000-$10000 per month, without even know about it.

Pay special attention when creating an ingredients list of inventory items. It is important that you specify correctly, amounts that are required to prepare dishes before cleaning, shaping, freezing, etc. in order to have an accurate insight into the requirements of goods and to have proper stock control.


It’s not just a popular song from the 90’s! Trying to be everything to everyone leads to disaster. The most successful restaurant concepts, know their niche…and nail it.If you can’t, or won’t, hone in on your specialty, you’ll encounter these issues:

Over complicated menu – too many food items, changes too often, staff unable to keep up with the new, ever-changing menu, Lack of uniqueness, Jack of all, but master of none.


Identify who is your customers, what is their taste preference, how tech-savy they are, what services attracts customers, prioritize their needs and channelize your effort in that direction. Gather customer reviews about food, service and management so that you can explore yourself where you are lagging. 


One of the major issues why customers prefer to go to another restaurant is the inconsistent quality of food. Restaurants are not able to provide the same quality of their food item that causes their customers to move on to new restaurants. The Customer will not recommend restaurant to any of their friends because of inconsistent quality of food. So restaurants should focus more on the recipes and the quality of food.


If restaurants do not run any promotional campaigning, there is no way customers will come to know about them. In today’s digital era restaurants have to get connected with their customers through digital media. Some restaurant pos systems like Fooditter provides free promotional activities through their product. So we have to be updated with such software to reach our customers easily.

Apart from this these issues there are many more reasons which contribute to the failure of restaurants such as lower capital, overspending, lack of new innovative ideas, bad partnership relation etc. one or two among these issues are enough to fail restaurants in their opening stage itself.

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