Food & Drink

The Main Reason Why Restaurants Fail & Go Bankrupt (Owners)

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Dec 15, 2017
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The Main Reason Why Restaurants Fail & Go Bankrupt (Owners)

The restaurant business is the worse to get into, don't even know why people do it. Owners are the main reason why restaurants fail. I will give you an example, the corner of Langstaff/Highway 7 just north of Toronto.... I have seen 7 restaurants fail in the last 10 years in the very same location. One fails, 2 months pass and another one starts. You would think that a businessman trying to start a restaurant will do his research and find out how many restaurants have been before him in the same address and failed. Are you kidding me? They don't do this before investing 300k or 500k into their business?? I'm not a businessman but that's the first thing I would do. In the case of the Langstaff/Highway 7 location if I would have known that 6 other restaurants were there before me in 10 years and are now all gone, that should tell me something; don't do it!!

The stupidity of opening a restaurant deep inside Toronto with more than 20 tables is insane. How much is the rent? 30k to 65k a month? Plus a big staff? If you are going to open a restaurant deep inside the city you better do what some smart mexican restaurant owners are doing. They open a small restaurant with 6 tables in a busy street and their little places are always packed, you see a line waiting rather than a table empty. Their rent is no more than 5k a month, its manageable. Even a busy hot dog cart vendor makes more money than some struggling brick n' mortar box restaurants since the hot dog vendor doesn't have a big staff or big bills to pay. The only way you are going to survive with a big box restaurant deep inside Toronto is if you sell expensive plates of exotic food and have a steady clientele that will fill up your tables nightly, a wholesale operation that gives you enough profits to pay your big staff and your $65,000/month rent. Only someone with lots of luck and deep pockets can pull off this stunt.

The people opening restaurants on a grand scale in places where others have closed are not businessmen, they are fools with borrowed money. This is the reason why banks are hesitant to lend money to eager entrepreneurs with no brains, no matter how many snake oil stories they sing about it. I'm going to give you the advice I gave my uncle for his successful little restaurant.

1. Find an ethnic area, wether jamaican, filipino or latino.
2. Open a small restaurant of only 3 to 4 tables.
3. Sell ethnic food plates.
4. Food must be visible and cooked already, people don't like waiting, most of your customers are going to be lunch-goers.
5. Sell drinks that are popular back in your country, like "moss peat" in Jamaica or "horchata" in Mexico.
6. Sell sweet treats that are also made only in your country.
7. You can sell CD's or even novelties from back home if you want, believe me, it sells.
8. You and your wife or your brother can manage the little thing, no outsiders that you have to keep employed.
Last edited by MusicBox on Apr 12th, 2020 1:51 pm, edited 2 times in total.
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Aug 16, 2010
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Jesus, this is one of the most one-sided/opinionated/unfair/narrow-minded posts I've seen. Blatantly calling restaurant owners stupid when you have no knowledge of the restaurant business at all is highly ignorant.
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Apr 5, 2013
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keenland
ill informed post based on an amateur opinion posted by an internet wannabe...this is a free soapbox so knock yourself out...when will your medical opinions and advice be posted? (even though you are not a doctor)..parenting advice? (not a parent)

you know nothing about the business aside from your own anecdotal experiences
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Okay, enlighten me as to how you proceed to open a restaurant, what steps you take? I'm basing my post on what I have seen in that location I mentioned, 7 restaurants failing in the very same spot, do you call those latter owners "experienced" and "smart" when they open a business in the same spot where 6 others have failed in the same line of work? Tell me why I'm "ignorant" for stating the obvious?
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MusicBox wrote: Okay, enlighten me as to how you proceed to open a restaurant, what steps you take? I'm basing my post on what I have seen in that location I mentioned, 7 restaurants failing in the very same spot, do you call those latter owners "experienced" and "smart" when they open a business in the same spot where 6 others have failed in the same line of work? Tell me why I'm "ignorant" for stating the obvious?
you are sighting one location and stating the "i told you so" argument...a lot factors come into play and i wont waste time arguing particulars with you...i can sight opposites to your argument about "so many have failed before in the same location" in other spots around town
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Feb 22, 2016
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MusicBox wrote: The only way you are going to survive with a big box restaurant deep inside Toronto is if you sell expensive plates of exotic food and have a steady clientele that will fill up your tables nightly,
How about selling overpriced plates of reheated McSysco food (and of course have that steady clientele)... seems to be a business model that works too well, unfortunately.

Examples: Kelsey's, Milestone's, Montana's, Prime Pubs, Bier Markt, Landing Group, Casey's, Pickle Barrel, Original Joe's, State and Main, Elephant and Castle, Moxie's, Jack Astor's, Scaddabush, Duke's, Canyon Creek, Earl's, Joey, Cactus Club, CHEESECAKE FACTORY, Baton Rouge, Turtle Jack's, Crabby Joe's, Chuck's Roadhouse, Shoeless Joe's.....
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This strategy has worked well for new comers and immigrants, to get themselves established in the food business. It has it's limits in terms of earning and growth potential. Great way to start off if short on cash, or looking to "buy" yourself a job.

If one is going to do that, then might as well buy a Subway franchise, hire a rotating roster of students and call it a day. Subway, takes the long term risk on the lease of the premises and equipment. The franchisee takes the day to day risk of running the place, inventory and wastage.
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A lot of restaurants are simply not very good.

They may start off strong, but quality eventually starts to dip and corners get cut.

What I've noticed is that prices creep up and portions and quality head in the opposite direction.
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EastGTARedFlagger wrote: How about selling overpriced plates of reheated McSysco food (and of course have that steady clientele)... seems to be a business model that works too well, unfortunately.

Examples: Kelsey's, Milestone's, Montana's, Prime Pubs, Bier Markt, Landing Group, Casey's, Pickle Barrel, Original Joe's, State and Main, Elephant and Castle, Moxie's, Jack Astor's, Scaddabush, Duke's, Canyon Creek, Earl's, Joey, Cactus Club, CHEESECAKE FACTORY, Baton Rouge, Turtle Jack's, Crabby Joe's, Chuck's Roadhouse, Shoeless Joe's.....
Alcohol, music, flatscreen sports TV's and young, attractive waitresses with short skirts is what keeps these places open and popular. They also fall in my definition of "with deep pockets". Let's take away cute waitresses, TV's and alcohol..... the only big box restaurant that will survive with 25+ tables in Toronto would be an expensive $35/plate italian wine/dine place, or a chinese buffet like the Mandarin. Not a regular food restaurant. Show me a big box restaurant south of Eglinton with 25+ tables that's not a franchise or a buffet and not an expensive seafood/italian and I will personally go there and check it out myself. Such a place would hold the secret how not to fail.
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Your advice is pretty BS. But I know that plaza in Langstaff (dufferin) and Hwy 7 since I used to live in Thornhill Woods. Whoever thought that the plaza is a good idea was an idiot as cars there blow by at 80+ km/h and the only people that might stop are locals. The original shop in that place was a Starbucks and even that closed down. So ethnic or no ethnic (one of the first restaurants there was a Jewish kebob shop) that location is garbage with no hope of success.
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Sep 24, 2007
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Or maybe in your area. It’s all a front for money laundering. Open up. Cops catch on. Close up. Open a new store. Rinse and repeat.

One thing that anyone has taught me. Location is key. Why do people try downtown? That is where the money is. There is no where else in the GTA that brings in that much foot traffic daily. All those businesses, pedestrians and people. You point to anywhere else in the GTA that has the same amount of population density.
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You sir need to open up a restaurant consulting service.. I’m sure sure once this lockdown is over restauranteurs all over the city will be banging on your door for that 1 location case study you’ve so thoroughly researched..

I would totally drop in to said restaurant first , and berate the current owners of how stupid they are, show them those paper napkin numbers you have compiled and there you have it.. they’ll probably hire you on the spot and name their first born after you..

I called it here first.. OP is the next Robert Irvine/Jon Taffer, Food Network get that prime time slot open
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durrsak wrote: Your advice is pretty BS. But I know that plaza in Langstaff (dufferin) and Hwy 7 since I used to live in Thornhill Woods. Whoever thought that the plaza is a good idea was an idiot as cars there blow by at 80+ km/h and the only people that might stop are locals. The original shop in that place was a Starbucks and even that closed down. So ethnic or no ethnic (one of the first restaurants there was a Jewish kebob shop) that location is garbage with no hope of success.
LOL you are very acquainted with that area I can see, yes cars blow past there at 80 km/h and I don't think there's an entrance from Highway 7, yeah the Starbuck's opened in that same location failed. Right now there's another shawarma restaurant there and is dead empty all the time, I try to give it a chance and tried to eat lunch there, Jesus Christ the plate started at almost $15 and NO RICE. To eat a normal shawarma there would cost $20 witth taxes, anywhere else is $14 taxes included (and with rice). I feel sorry for the owner of that place, he must pay an arm & a leg in rent and has zero business. But the Jamaican jerk chicken at Rivermede/Highway 7 is busy and sells food like hot cakes, also the shawarma place near Keele/407 ETR owned by these asians.
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Mar 10, 2004
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DiceMan wrote: Jesus, this is one of the most one-sided/opinionated/unfair/narrow-minded posts I've seen. Blatantly calling restaurant owners stupid when you have no knowledge of the restaurant business at all is highly ignorant.
He/she s juzt opinionated. He/she may not be running the show but did mention he/she provided a lot of input into their uncle's successful little restaurant. I can see how his/her strategy could work.
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another obvious reason is cause of a Pandemic
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EastGTARedFlagger wrote: How about selling overpriced plates of reheated McSysco food (and of course have that steady clientele)... seems to be a business model that works too well, unfortunately.

Examples: Kelsey's, Milestone's, Montana's, Prime Pubs, Bier Markt, Landing Group, Casey's, Pickle Barrel, Original Joe's, State and Main, Elephant and Castle, Moxie's, Jack Astor's, Scaddabush, Duke's, Canyon Creek, Earl's, Joey, Cactus Club, CHEESECAKE FACTORY, Baton Rouge, Turtle Jack's, Crabby Joe's, Chuck's Roadhouse, Shoeless Joe's.....
When I did my chef training one my instructors told me something I never forgot - "the most important thing in the hospitality industry is consistency".

"McSysco" is successful because it offers easy consistency. Not saying it's good...just sayin
"I'm a bit upset. I've been grab by the back without any alert and lubrification"
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Feb 22, 2016
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Toukolou wrote: When I did my chef training one my instructors told me something I never forgot - "the most important thing in the hospitality industry is consistency".

"McSysco" is successful because it offers easy consistency. Not saying it's good...just sayin
McDonald's is successful for the same reason, I get that.

The difference is, I don't see the same menu of the same shit (that tastes the same too!) if I go over to Wendy's, Burger King, A&W, or any other similar chain restaurant. They may all serve burgers but you would never mistake a Wendy's product for one that's served by McDonald's.

However, go to any 2 of those places I listed, order the same item, and you'll probably get the exact same product that came from an identically labelled SYSCO freezer pack.
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A few are owned by one company: https://en.wikipedia.org/wiki/Recipe_Unlimited

So I am not surprised they all tasted the same.
EastGTARedFlagger wrote: McDonald's is successful for the same reason, I get that.

The difference is, I don't see the same menu of the same shit (that tastes the same too!) if I go over to Wendy's, Burger King, A&W, or any other similar chain restaurant. They may all serve burgers but you would never mistake a Wendy's product for one that's served by McDonald's.

However, go to any 2 of those places I listed, order the same item, and you'll probably get the exact same product that came from an identically labelled SYSCO freezer pack.
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danman227460 wrote: A few are owned by one company: https://en.wikipedia.org/wiki/Recipe_Unlimited

So I am not surprised they all tasted the same.
That's probably the biggest offender but mostly because it was formed by the merger of two giants that each had a big roster of near-identical restaurants -- I'm of course talking about Cara Operations and Prime Restaurants. The new combined "Recipe Unlimited" could easily consolidate a dozen of their brands as "Kelsey's" or "Montana's" and you'd be none the wiser as the food would be the same.

In an older thread I mentioned the following... just so you see how all these companies are putting on a fake show of "competition" in order to fleece the public. Canadian collusion at its finest:

Canyon Creek is owned by SIR Corp. which are the same geniuses behind Jack Astor's, Scaddabush, Red's, and several other places. The SIR Corp dudes (from Ontario) had a "gentlemen's agreement" (more like mafia territory agreement) with the Earl's/Joey's/Cactus Club people (from BC) so SIR Corp wouldn't expand west and Earl's wouldn't come east. The agreement's gone to shit in recent years but it'll take a while for the Earl's brands to fully infiltrate Ontario as it will for the SIR brands to spread west.

It's explained here:
https://www.theglobeandmail.com/report- ... cle624967/

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