By Doral Chenoweth

Prepared for Dr. H.G. Parsa; Ohio State University Associate Professor, Hospitality Management Lectures on Restaurant Management and Marketing

When a restaurant closes, it is never the fault of the owner. Blame the other guy, always an elusive target in failures, or the best culprit of all, Uncle Sam, who wants his share of the day's till. There is no scientific compilation as to why restaurants shutter, only general speculation.

Most restaurants open with some fanfare; few close with advance notice.
The Dispatch keeps a tally of generalities compiled from sightings of tipsters passing by locked doors, or noticing such evidences as mail piling up at the door.
In the year 2000, Columbus and central Ohio had many closings. Here are our findings in no particular order other than the top 10, those being the most observed.

Lack of financing when first opening, a major leader relating to independents conceived in the belief that "if we open--they will come."

Inability to control food costs; lack of factoring other operating expenses with any restaurant's primary expense, that of buying raw product.

Location, location, and read that a third time.

Bad food.

Service, or lack thereof.

No damage control; lack of policy in handling complaints, inability to deal with those who inform others using that old threat, "I'll never go there again." Believe it, that customer will tell seven others.

Street talk, rumors true or false, damaging gossip, negative word-of-mouth utterances.

Strong competition opening nearby; proliferation of chain dinner houses bidding for the same dining-out dollar.

Zero marketing in opening plans; failure to budget using the old-fashioned Butcher Block Rule--allocate the same number of dollars for advertising that you have in your kitchen equipment. Example: When Howard Johnson opened his first ice cream store, he spent his marketing dollars on handbills in the neighborhood, blocked his front sidewalk with two A-frame signs and gave away ice cream cones to kids in the neighborhood--all at a cost equal to what he had in his freezers.

Ineffective advertising; vanity advertising with owner's faces, owner's children, owner's pets; failure to inform public as to what the restaurant is about, such as prices, cuisine, hours, alcohol policy, reservation and smoking policies, and lastly the important menu price range for various meals.

Acts of God, such as snow storms, used by TV weathercasters to scare off reservations; add the hint of rain to sound weather alarms sufficient to keep people at home.

southwest cafe
Following weeks of rain, two sinkholes opened on the property of Buffalo's Southwest Cafe blocking access from Highway 70 in Hickory, N.C.

Sinkholes? Yeah, sinkholes. This is one with good news and bad news. The good news when it comes to an eatery near or in a sinkhole, lots of fill dirt, concrete and good insurance may get the place open again. The bad news: One sinkhole tends to encourage others nearby to surface. (So surface is a bum choice of words.)

Dateline Hickory, N. C.: Nation's Restaurant News reporter Jack Hayes wrote that underground drainage may have caused two huge sinkholes to appear at a peak serving hour. Someone in the bar yelled out: "Who owns the yellow Corvette - it's going underground." The owners of Buffalo's Southwest Cafe found out who their friends were when it came to rebuilding and reopening: The banks, the food purveyors, the employees, their accountant, plumber, printer and, yep, lots of the regular customers. Who were the bad guys? Hickory city officials acted like politicos. Go figure.

Minimum wage mentalities; Held too long by restaurant owners still convinced that five bucks an hour will bring job applicants flooding in.

Failure of morning crew to arrive in time to prep, sometimes failing to open the door.

Electronic ambience; Music soothes, music irritates, no happy medium, list the offensive sounds that have limited followers--sports talk shows, Christian rock, rap, hard rock, heavy metal, even elevator music, and then there are eateries scaring off customers by piping in Rush Limbaugh.

Employee theft.

Thieving bookkeepers/accountants.

Rude, crude retorts to customers who may or may not have valid complaints.

Excessive menu/wine pricing for the targeted patronage.

IRS claims; Uncle Sam demands his cut of the take and serves the papers
to prove it.

Stickups and other convincing acts to discourage further business; repeated sightings of people with sawed-off shotguns in neighborhood.

Deteriorating neighborhood resulting in second thoughts about business growth.

Eviction from property owned by a second party who sees greater return with a different client.

Sanitation violations compiled by stubborn health department inspectors.

Screwball restaurant concepts; Theme restaurants that manage to tell their story in one visit while discounting the fact food should be the first consideration if building a return patronage is the objective. Examples: A décor featuring reptiles, vintage auto parts, fading sports banners, fading movie memorabilia, excessive displays of religious artifacts, or denominational prayer cards on tables and counters--the implication being that if you are not of said faith, you are in the wrong place. What ever happened to Planet Hollywood? Oh, and NYC's glitzy Fashion Café? Does Burt Reynolds still own a restaurant in Atlanta?

The political correctness factor: How are the Playboy Clubs doing today?

Serving food that has gained a reputation for being anything but biodegradable.

Opening with a name too long to be instantly recalled by targeted patronage. Example: J. Ross Browne's Whaling Station. Just where was it to be found in the Yellow Pages? Under J, R, B, or W? Add to that any name loaded down with "and" or the commercial "and" as in ampersand. Consider, if you opened a restaurant named Bravo! Cucina Italiana, how long do you think it would take the dining public to rename it simply, "Bravo"? Today, restaurant names do not have to be weighted down with reminders the place sells LIQUOR in obscene neon. BAR and LOUNGE are equally passé.

Impossible rent structures; debt service.

Underserved investors who expect quick returns.

Partnership disputes. All startup partnerships are wonderful, all parties visualize sharing of losses should the place belly-up. Figure facts are missing, but few business partners go to the grave with their partnerships intact. What ever happened to Ben and Jerry?

Divorces between mom-pop ownerships, earthquakes, tornadoes, floods, and other Acts of God.

Zoning issues, local (liquor) option elections.

And, finally, what was once known as the "Rt. 21 Syndrome." Highway traffic is rerouted bypassing the place of business. The changing of traffic patterns reroute highways to funnel traffic (cars, trucks) from one established routing to another; also known as the "Route 66 Syndrome" when Ike stretched his interstates across the country, thus taking the country away from many mom-and-pops, and away from the two-lane blacktop era.

enter l home l site map l links l contact us

© 2006