Restaurant failure is making headlines in 2025 — and the numbers are telling.
With new spots opening every day, the pressure to succeed has never been higher.
This article dives into the data to reveal what’s really happening behind the scenes.
Content
• Top Statistics of The Restaurant Failure Rate 2025
• Do 90% of Restaurants Fail in the First Year?
• What’s the Average Restaurant Failure Rate?
• How Long Do Restaurants Last?
• The Real Restaurant Failure Rate Is Lower Than You Think (2025 Update)
• The Truth About Restaurant Survival
• Restaurants Are Built to Last More Than You Think
• Restaurants Are Beating the Odds, Here’s the Proof
• The Restaurant Industry Trends in 2025: Thriving, Hiring, and Leveling Up
Top Statistics of The Restaurant Failure Rate 2025
• The National Restaurant Association (NRA), a trusted industry authority, has reported a 30% failure rate across the U.S. restaurant industry.
• Actual research shows only 17% fail in year one, meaning over 83% survive.
• 51.4% of restaurants are still kicking after 5 years.
• The 1-year survival of restaurants is 83.1% vs. 79.6% of all small businesses.
• The restaurant world is adding 200K jobs this year, pushing industry employment to 15.9 million.
• 1 in 6 restaurants close in year one.
Do 90% of Restaurants Fail in the First Year?
The widely shared claim that 90% of restaurants shut down in their first year isn’t just inaccurate, it’s pure marketing fiction. This myth originated from a 2003 American Express commercial and lacks any legitimate, data-driven foundation. No credible source or traceable research supports that number, making it a classic example of viral misinformation.
Here’s What the Real Data Says
According to a well-cited 2014 study by two economists at UC Berkeley, only 17% of restaurants close during their first year of operation. This statistically backed insight completely debunks the fear-mongering 90% myth. This data offers a clear perspective on startup restaurant risks, showing they may be lower than commonly perceived.
To further validate the numbers, the National Restaurant Association (NRA), a trusted industry authority, has reported a 30% failure rate across the U.S. restaurant industry. That figure reflects a slightly higher rate than the UC Berkeley study, but still nowhere near the exaggerated narrative that’s been floating around for years.
Source: Menu Tiger
What’s the Average Restaurant Failure Rate?
Pinning down the exact failure rate of restaurants across the U.S. can be tricky, but industry experts have provided some well-researched insights. According to the National Restaurant Association (NRA), the average failure rate in the foodservice market industry hovers around 30%, meaning roughly 1 in 3 restaurants shut down within their first year.
How Long Do Restaurants Last?
A widely cited study by Ohio State University uncovered some hard truths:
• About 60% of restaurants close within the first year, and
• Nearly 80% go out of business within five years.
While these numbers may feel discouraging, they also serve as a wake-up call for anyone jumping into the food biz. Success in this space isn’t just about great food or trendy aesthetics; it’s about scalable operations, strong branding, financial forecasting, and a digital marketing strategy that builds loyal local audiences.
Why Restaurants Fail: The Internal Factor
Most restaurant failures don’t boil down to external competition or lack of demand. Instead, it’s often internal mismanagement, poor human resource planning, and flawed operational structures that sabotage long-term success. When leadership isn’t aligned with efficient systems, it shows in customer service, quality, and ultimately, revenue.
Source: The National Restaurant Association, Forbes
The Real Restaurant Failure Rate Is Lower Than You Think (2025 Update)
As the CEO of Owner.com stated that I’ve had the chance to meet hundreds of restaurant owners who’ve built thriving businesses from the ground up. They’ll all admit the same thing: this industry is grind culture meets gourmet hustle. But they also know that the “90% fail” stat people keep throwing around is straight-up misinformation.
What’s the Real Restaurant Failure Rate in 2025?
Contrary to popular belief, only 17% of restaurants shut down in their first year. That’s way lower than the fear-mongering 90% figure you’ve probably seen floating around online. And here’s something even more encouraging: over 51% of restaurants are still going strong five years in.
Here’s how the real numbers break down:
• 1 in 6 restaurants close in year one
• 1 in 2 make it past year five
That’s not business failure statistics. That’s an opportunity.
The Truth About Restaurant Survival
So here’s what you’re looking at in this graph:
The curve shows restaurant survival over time from year 0 (your launch) to year 15. Right at the start, survival is super high. That’s because most restaurants don’t crash and burn in the first few months, despite what all those scary internet myths say.
The bold black dot highlights a key stat:
• Only 17% of restaurants fail in their first year.
• That means a massive 83.1% survive. Not just survive, many of them thrive.
That first drop in the curve looks steep, but here’s the kicker: it levels out. So as the years go on, your chances of sticking around improve if you’ve got your systems tight, your marketing on point, and your guests vibing with your brand.
Restaurants Are Built to Last More Than You Think
Here’s something that might surprise you: Restaurants outperform many other service-based businesses when it comes to survival rates. Yup, despite the popular myths floating around, the numbers show that restaurants hold their own, even when compared to the broader pool of private businesses across the U.S.
Running a restaurant isn’t a walk in the park. It takes hustle, passion, and serious commitment. But that grind pays off. Restaurants do more than just serve food; they create jobs, build local culture, and become go-to hubs for connection and comfort. For many entrepreneurs, opening a restaurant is not just a business move; it’s a powerful step toward ownership and independence. This drive reflects the spirit of entrepreneurship in the food industry, where passion meets purpose to shape communities and fuel local economies.
So if you’re dreaming of launching your spot, take this as your green light. The odds aren’t stacked against you the way people say they are. The data tells a different story, and it’s one of opportunity.
Restaurants Are Beating the Odds, Here’s the Proof
Think opening a restaurant is a guaranteed flop? Think again. According to fresh stats from the U.S. Bureau of Labor Statistics, restaurants outperform the average small business across the board when it comes to staying alive and thriving.
Survival Rates Snapshot:
| Timeframe | Restaurants | All Small Businesses |
| 1-Year | 83.1% survive | 79.6% survive |
| 5-Year | 51.4% survive | 49.6% survive |
| 10-Year | 34.6% survive | 33.6% survive |
That’s right, more than 8 out of 10 restaurants make it past year one, and over half are still going strong after five years. Even at the 10-year mark, restaurants are still slightly ahead of the average small business game.
Source: Owner.com
The Restaurant Industry in 2025: Thriving, Hiring, and Leveling Up
The restaurant game in 2025 isn’t just about food; it’s about experiences, community vibes, and opportunity. According to the National Restaurant Association, this year is shaping up to be one of cautious optimism and massive potential. Here’s what’s cooking in the industry:
$1.5 Trillion in Sales? Yep, Restaurants Are Still the Main Course
Consumers aren’t cutting back on their cravings. Restaurant sales in the U.S. are expected to hit $1.5 trillion in 2025. That’s a massive signal that people are still dining out, supporting local spots, and craving what restaurants do best: delivering delicious food with vibes you can’t recreate at home. Despite concerns about the economic impact on dining, these projections show that consumers continue to prioritize restaurant experiences over cutting back.
New Jobs, Major Growth Vibes
The restaurant world isn’t just about great eats; it’s one of the biggest job creators out there. By the end of 2025, the industry will add 200,000 new jobs, pushing total employment to 15.9 million.
It’s About the Experience (Not Just the Price)
According to the report, 64% of full-service diners and 47% of limited-service diners say that the overall dining experience matters more than just the price tag.
Discounts Are Still a Power Move
While experiences dominate, value isn’t going anywhere. Nearly half of all restaurant operators (47%) plan to discontinue offering fresh discounts, value deals, or limited-time promotions to keep the crowds coming in.
On-Premises Dining Is Making a Comeback
Dine-in is not dead. Across all segments, restaurants are prioritizing in-house traffic over takeout. Especially in:
• Fine dining (90%)
• Casual dining (87%)
The goal? Create a space where people want to hang out, celebrate, and keep coming back.
People Still Love Restaurants (No Cap)
Here’s the feel-good stat: 9 out of 10 adults say they genuinely enjoy eating at restaurants. They love the flavors, the convenience, and the fact that it just hits different compared to cooking at home.
Source: Restaurant.org
Takeaway for Restaurateurs
If you’ve been holding back on opening a restaurant because you heard that “90% of them fail in the first year,” now you know that stat is straight-up cap. If you’re serious about success, consider investing in professional support like business plan writing services to help map out a clear and realistic path forward. The reality? Most restaurants survive that crucial first year. And more than half stick around long enough to become local legends. 83.1% of restaurants survive their first year, which is better than the average small business, 79.6%. And 51.4% are still thriving at year five, proving this isn’t just a flash-in-the-pan industry.
Even after 10 years, 34.6% of restaurants are still standing strong. And get this: restaurant sales are expected to hit $1.5 trillion in 2025, so clearly, customers aren’t cutting back on cravings. With 200,000 new jobs being added this year, the industry isn’t shrinking—it’s growing rapidly. In 2025, restaurants aren’t just surviving, they’re hiring, growing, and evolving into full-blown community powerhouses.
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