The Restaurant Industry suffers from a failure rate as high as 80%. Here's how 3 strategic concepts can help operators mitigate risk and avoid becoming a statistic.
By Ashley Robinson, CEO of The Seaker Group
Running a restaurant is tough. Growing a chain? Even tougher. Our strategic consulting firm has seen too many concepts fail—if we don’t laugh, we’ll cry. So we started turning failure into memes. Along the way, we coined (and borrowed) a few terms that sum up why concepts collapse.
“The Persuasion of a Free Look.”
This happens when execs use local brokers to scout new markets before doing the hard homework. Brokers seem “free” and get misused as an easy peek into viability. But remember: a broker advises on ~8% of your P&L (rent/occupancy). The other 92%? That’s on you—and we’re here to help measure that.
“The Field of Dreams Approach.” If you build it, they will come… right? Wrong. Too many believe real estate alone will do the heavy lifting. They flip the open sign and wait. But as the reasons for failure grow, so does the risk.
Here are three frameworks that help operators play to win—not play whack-a-mole with problems.
1. Make Curiosity Your Currency
You can’t benefit from data if you’re not thinking like a scientist. Assumptions are necessary—but treat them as hypotheses, not gospel. This leads to faster course-corrections, fewer silos, and more collaboration.
Physicist Enrico Fermi nailed it:
“If the result confirms the hypothesis, you’ve made a measurement. If the result is contrary to the hypothesis, then you’ve made a discovery.”
But if you make decisions based on a black-box model you don’t understand—or a gut feeling that bombs—you haven’t discovered anything. You’ve just made a mistake.
But what about the art?! This is still the restaurant business, a people business. Absolutely—and that’s where the next principle comes in.
2. A Mix of Art + Science Is a Must
Everyone says it, but few execute it. At Seaker, we prescribe a Brand-Driven, Data-Backed approach.
Why not “data-driven”? Because data needs direction. The brand sets the vision—data helps you get there.
Think of it like GPS. You don’t type “Where should I go?” and expect the car to pick the destination. The executive team is the driver. Data is the navigator.
Supporting brand-driven decisions with data is just as vital as making purely financial ones.
Another major failure point? The Blame Game.
When stores underperform, real estate blames ops, ops blames marketing, and everyone’s defensive about their contributions. Now you're not solving problems—you’re in CYA mode.
3. Execute Management That’s Holistic & Cyclical
Sounds complicated—but here’s the idea: every department matters, but most don’t speak the same language. Silos kill strategy.
The process of launching a store is linear (site selection → build → open), but your strategy shouldn’t be. Too often, valuable insights from real estate never make it to marketing or operations, and rarely is there a post-mortem analysis unless something has gone wrong.
Instead, treat strategy as cyclical—especially after opening. Keep asking questions. Test assumptions. Look for discoveries, not just mistakes. That’s where #1 (curiosity) and #2 (art + science) kick in.
A holistic model unites departments under a shared process and mindset. It stops internal competition and fosters shared wins.
In Summary:
You can still wear a lab coat and a chef’s hat. A brand that leads with curiosity, balances creativity with analytics, and brings departments together has a much better shot at avoiding that 80% statistic.
“Whatever Nature has in store for mankind, unpleasant as it may be, men must accept, for ignorance is never better than knowledge.”
– Enrico Fermi