Restaurants as a whole DO have a high failure rate in America. But you have to break out the information to do a proper analysis as to why. One thing to keep in mind, though, is that as a small business start-up, there are far more restaurants started than most other types of small business. That in itself lends to a statistically higher rate of failure than other business ventures.
Restaurants are not equal. There is far less failure with small Mom and Pop type shops than there is with multi-million dollar, multi investor and partner financed high concept restaurants. So, when you wish to properly analyze the failure rate in restaurants — or foodservice business in general — you need to look at the failure rate of the specific type of shop you wish to start.
You need to look at the characteristics of YOUR particular shop, and do a direct comparison with food businesses which share those same characteristics. You may find that the specific type of shop you plan to open actually has a very low risk of failure (everything else being equal) among the entire category of ‘restaurants’ in general.
Also, you must keep in mind that a food shop IS NOT ONLY competing against other restaurants…… it is competing against ALL food. Any place that provides food — homes, grocery store delis, gas stations, convenience stores — are also your competitors. You have to ask yourself just HOW you can drive the consumer to choose you amongst every other food choice.