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Restaurant Failure Rate

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A study by Parsa, Self, King and Njite (2005) showed that the restaurant failures are in fact under 30% during the first year of operation, and although individual failure rates may rise by the third year of operation, they do not reach the levels reported by American Express. The National Restaurant Association of US recognizes a 30% failure rate as the norm in the restaurant industry.
Another study by Parsa, Gregory and Terry (2011) identified factors that contribute to restaurant failure to be both macro and micro factors such as location, high fixed costs, legislation, climate, urban planning, competition and economy to name a few. These factors have been identified as contributing to the approximate 30% failure rate of restaurants in …show more content…

Large corporations are increasingly taking over black-owned business markets and locating retail franchises within African American neighbourhoods. Again, African American businesses are struggling because of increased competition from foreigners doing business in the black community (Bradley, 2009; Bonds, 2007). Finally, black businesses are failing because they lack the technical and management experience needed to succeed in business (Steward and Anderson, 2012).
Hugh in his 2008 study mentioned that black-owned restaurants not only fail due inexperience but also because of a lack of support from the government and the communities in which these businesses operate. Support can be in the form of finance, and even physical. In any business activity it is essential to have support, because without support excelling in the business venture could prove …show more content…

This has brought about many problems. This is because most African governments fail to support indigenous businesses financially (Tavlin et al, 2013).Worku (2013) pointed out that due to the huge loss caused by the problematic management system, African governments have started to realize the importance of indigenous enterprises to their economies. Therefore, some black-owned indigenous businesses, restaurants and hotels included are forced to sell their shares to their employees or external investors (Wang,

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