Faculty & Research
Why Restaurants Fail
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Vol 46 No 3
By: H.G. Parsa, John T. Self, Tiffany King and David Njite
Executive Summary: Past research on restaurant failures has focused mostly on quantitative factors and bankruptcy rates. This study explored restaurant ownership turnover rates using qualitative data, longitudinal data (1996- 1999), and data from Dun and Bradstreet reports. In contrast to frequently repeated statistics, a relatively modest 26.16 percent of independent restaurants failed during the first year of operation. Results from this study indicated marginal differences in restaurant failures between franchise chains (57.2 percent) and independent operators (61.4 percent). Restaurant density and ownership turnover were strongly correlated (.9919). A qualitative analysis indicated that effective management of family life cycle and qualityof- life issues is more important than previously believed in the growth and development of a restaurant.
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- Why Restaurants Fail By: H.G. Parsa, John T. Self, Tiffany King and David Njite
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