What Are the Top Challenges for Restaurants?

Restaurants are where America goes to socialize and celebrate. This is a $700 billion industry, but it’s not easy: many restaurants don’t make it past the first year and most fail within five years.

From taxes and restaurant depreciation to health care and the minimum wage, restaurateurs must tackle a variety of issues. Currently, there are four specific challenges that restaurant executives have on their plates. What are they?

1. Developing Employees

Many common restaurant challenges can be solved with a commitment to employee training. Failure to adequately manage people is often one of the reasons a restaurant fails. A Manager who cannot build relationships with the customers nor the employees will be major problem.

Staff training is a huge part of people management and development. There is a looming workforce shortage and this is a high-turnover industry; restaurants must find ways to keep and develop the staff they have. But many restaurateurs overlook the importance of a learning culture. Some are reluctant to train people who may leave at any time. This is shortsighted.

In the hospitality and customer service business, the quality of an establishment’s staff is what you’re selling. Your people create the food and the experience that attracts paying customers and keeps them coming back. Why wouldn’t you invest in that?

And training is not that expensive anymore: with mobile learning management systems and course authoring tools, restaurants can easily design and implement all the training they need.

Remember: Put people first, and profits follow.

2. Food Safety

There are about 48 million cases of foodborne illness each year. Just this year there was a cyclospora outbreak in 30 states and the FDA warned of the risks of cheeses made from unpasteurized milk. An outbreak can mar business reputations, so safe food-handling practices is a constant challenge in the restaurant industry. The top priority of any restaurant is providing delicious, safe food to customers. Most states require some form of food handling certification.

Restaurant executives must use training to create a culture of operational excellence and maintain food safety. A commitment to food safety training can lower the costs of operation, improve quality, and increase margins.

3. Government Regulations

Restaurateurs must deal with new regulations and training requirements, such as food safety, health care, human resources, and menu labeling, every year. This can be particularly challenging for small, non-chain establishments especially if they are being managed via Excel and Word.

Stay on top of the latest developments and stay compliant with the help of industry organizations, the Internet, and specialized applications.

4. Attracting Millennial Customers

Restaurants serve 130 million Americans every day. But buyer demographics and behaviors are constantly changing, and the smart restaurateur stays up to date on all of these shifts. A current force in the marketplace is the more than 80 million millennials with increasing spending power. This influential, diverse group is tech savvy with a talent for social media. They use the Internet to find restaurants, rate them, and choose the hot new place. This presents a great opportunity for restaurants to market their brand in new, affordable ways.

As millennials become an economic power and a critical demographic, smart restaurant executives will spend more time and money researching millennial trends and developing innovative strategies to attract them and grow brand loyalty.

While restaurant failure numbers can be daunting, there is no need for despair for the informed, assertive restaurateur. New changes in the industry such as new laws, customers, and tastes provide unique opportunities for you to learn more about this business and your customers. Stay atop of recent regulations and trends with the on-demand tools available now, and you will navigate any challenge, increase profits, and develop sustainable restaurants.



Facts at a Glance http://www.restaurant.org/News-Research/Research/Facts-at-a-Glance

2015 Agenda Overview http://www.restaurant.org/advocacy/2015-Agenda-Overview

Food Network Chef Robert Irvine Shares The Top 5 Reasons Restaurants Fail http://www.businessinsider.com/why-restaurants-fail-so-often-2014-2

Cyclosporiasis Outbreak Investigations — United States, 2015


Safe Food Handling: What You Need to Know


The Dangers of Raw Milk: Unpasteurized Milk Can Pose a Serious Health Risk


Marketing to your millennial audience