Failing Restaurant Red Flags and How to Avoid Them

Why do restaurants fail and what are the warning signs of a failing restaurant? Find out what NOT to do, so that your restaurant investment is a success.

Common Reasons Restaurants Fail

Opening a restaurant can be a dream come true for many entrepreneurs and a solid investment for those looking to boost their financial prospects. But success takes proper planning and knowing what common pitfalls to avoid.

Multiple factors contribute to a failing restaurant and many of those factors are foreseeable and preventable. Let’s consider a few:

  • Lack of restaurant industry experience: There’s more to creating a successful restaurant than being or having a great cook. Personal experience or partnering with a proven brand in the restaurant industry is a must if one hopes to navigate issues like finances, management, and marketing.
  • Fuzzy concept: Make sure your restaurant’s mission is clear so employees know how to deliver on your vision and customers know what to expect from your food, ambiance, and service.
  • Deficient operational capital: Big dreams can lead to unrealistic financial expectations. Be sure to have the funding to not only open your business but keep it running until you turn a profit.
  • Poor location: To keep your restaurant from floundering, find a location with affordable rent, good visibility, access, and parking in a neighborhood that needs and wants what you’re offering.
  • Menu mistakes: Proper menu planning and pricing will ensure your restaurant isn’t wasting food or losing money on labor and other expenditures.
  • Employee issues: Lack of training and clear communication can lead to poor customer service and a high staff turnover rate. Prepare your staff to represent your business, pay them well, and offer opportunities to move up the ladder.
  • Lack of repeat business: Incentivize customers to come back with special offers, events, loyalty programs, and above all, great service and food.
  • Marketing mistakes: Know your target audience and how to reach them through local ads, direct marketing, community events, your website, and social media.
  • Business partner conflicts: When going into business with a partner, make sure you have a plan for the good times, but also a clear exit strategy should the partnership need to dissolve.

How Buying a Restaurant Franchise Can Lead to Success

One way to avoid some of the red flags associated with a failing restaurant is to buy a restaurant franchise. Franchised restaurants come with several advantages:

  • A proven business model: The franchisor has already worked out the kinks of owning and operating their restaurants. As a franchisee, you benefit from their trial and error and can hit the ground running.
  • A recognizable brand: Guests are already familiar with your restaurant concept. They already know you offer what they want.
  • Clear financial expectations: Not only is it easier to get funding for a restaurant franchise, you also have defined financial obligations and goals outlined by the franchisor. You won’t be guessing about how much it costs to own and operate your restaurant.
  • Location development: Many franchisors will help your find the best location for your new business. They’ve done the research into where demand and opportunity are highest, giving you a leg up.
  • Training: Franchisors offer training for you and your staff so your restaurant will deliver service and food consistent with the brand and keep you up to date on the newest menu and technology developments.
  • Marketing support: A huge advantage of buying a restaurant franchise is in the marketing support a brand offers. A franchisor will research and utilize various effective avenues for reaching consumers like local and national TV, radio, and print advertising, website design, and social media visibility.

The Wayback Way to Success

At Wayback Burgers, we’re cultivating happiness and success for aspiring restauranters. Our brand offers an opportunity to own a thriving hamburger business while avoiding some of the common mistakes that cause some restaurants to fail.

How do we do that? By giving our franchisees the tools needed to succeed through the support and experience of an established system. In 170+ locations in 35 states and 40+ countries, by following our operational blueprint and recipe for success, our franchisees have shown the Wayback Burgers way of doing business works. We’ll answer your financial questions, help you find a location, and offer training, marketing, and purchasing support.

Learn how to get started on your Wayback Burgers journey to successful restaurant ownership.