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Is It a Good Time to Open a Restaurant?

Recessions may create good opportunities for innovative entrepreneurs because the labor and operation costs tend to be lower than those in the good times. In the past, I discussed the mobile food truck opportunities and whether it is a good idea for hospitality students to start their own restaurant business upon graduation. Now that the restaurant industry has seen some signs of recovery and the mobile food truck idea is not “new” anymore, will it be a good time to open one’s own restaurant?

According to Tim Zagat, the Co-Founder & CEO of Zagat Survey in this Fox News video, now it is NOT the time to open a restaurant. Why?
  • The food price rose 2.2% over the last year.
  • Less people are going out to eat.
  • 39% consumers pay more attention to food price.
  • The failing rate for restaurants is as high as 60%.
Running a restaurant is tough. Competition is extremely high. Consumers are very demanding. Demand is almost unpredictable. Yet, inventory is hard to manage. Restaurant business takes long hours and an owner’s full commitment. Everything must be “perfect” because one tiny mistake could ruin it all. Do you agree with Tim Zagat’s opinion? What suggestions will you give to those who want to become restaurant entrepreneurs?

Comments

  1. I somewhat agree with this about the food prices rising and what not but who is to say that the food prices are going to go back down? I think Americans will adjust just like we all have to everything else rising. The price of gas, beef prices are have gone up probably 2 dollars per pound in some cases in the past 3 years. I also think that people that want to run their own restaurant are aware and willing to work the long hours, if they truly know what they are getting into that is. Running a restaurant has to be a passion or a calling for someone to be successful at it i think. So yes this is a good article for facts, but I don't think anyone reading it should get down on their dream of opening their own place.

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  2. Michael:

    Thank you for pointing out that people should NOT give up their dreams of opening their own restaurants. I like your comments. They must know very well of what they are doing and get ready for a variety of challenges. People eat at least 3 meals a day. So, there must be a market for the right restaurants. :)

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