Does Restaurant Success Depend on More Than Location?

washington-dc-on-the-map-3-369938-mWhen choosing where to open a restaurant, many businessmen may recall the adage “location, location, location.” But even a prime location doesn’t always protect against restaurant failure. In “Why Restaurants Fail: Part IV: The Relationship Between Restaurant Failures and Demographic Factors” from Cornell Hospitality Quarterly, the authors illustrate how an area’s demographic characteristics can affect the success of a restaurant.

The abstract:

Although location is a significant factor in a restaurant’s survival chances, contrary to the commonly held belief, the presence of nearby homes did not help in lowering cqx coverfailure rates between 2000 and 2010 for restaurants in Boulder, Colorado. Instead, having a substantial population of apartment dwellers and transient residents (notably, university students) enhanced the restaurants’ success, as did the presence of people aged eighteen to twenty-four, those with higher educational levels, non-household families, and low- to middle-income families. Larger restaurants and those with chain affiliation had a greater probability of success than small, quick-service operations. Among the factors that had little effect on restaurant success or failure were unemployment rates, the nature of nearby residents’ profession, and the geographical presence of families with children under eighteen. The study’s results also support the long-held industry perception regarding avoiding locations where restaurants have already failed. When a location had experienced three ownership turnovers, the study found that the location generally ceased to host restaurants as tenants. As explained further in this article, this is the fourth in a series of examinations of the elements of restaurant success and failure.

Click here to read “Why Restaurants Fail: Part IV: The Relationship Between Restaurant Failures and Demographic Factors” from Cornell Hospitality Quarterly. Want more articles like this sent directly to your inbox? Click here to sign up for e-alerts from Cornell Hospitality Quarterly!

This entry was posted in Economics, Entrepreneurship, Groups, Hospitality Management, Hospitality Marketing, Performance, Strategy and tagged , , , , , , by Cynthia Nalevanko, Editor, Management INK. Bookmark the permalink.

About Cynthia Nalevanko, Editor, Management INK

Founded in 1965, SAGE is the world’s leading independent academic and professional publisher. Known for our commitment to quality and innovation, SAGE has helped inform and educate a global community of scholars, practitioners, researchers, and students across a broad range of subject areas. With over 900 employees globally from principal offices in Los Angeles, London, New Delhi, Singapore, and Washington DC, our publishing programme includes more than 560 journals and over 800 books, reference works and databases a year in business, humanities, social sciences, science, technology and medicine. Believing passionately that engaged scholarship lies at the heart of any healthy society and that education is intrinsically valuable, SAGE aims to be the world’s leading independent academic and professional publisher. This means playing a creative role in society by disseminating teaching and research on a global scale, the cornerstones of which are good, long-term relationships, a focus on our markets, and an ability to combine quality and innovation. Leading authors, editors and societies should feel that SAGE is their natural home: we believe in meeting the range of their needs, and in publishing the best of their work. We are a growing company, and our financial success comes from thinking creatively about our markets and actively responding to the needs of our customers.

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