For many, summer means visiting our favorite restaurants. How many of them are likely to be here a year from now?

Answer: Restaurants have about a 20% failure rate within the first year, just like businesses in other industries.

Questions:

• Why do you think there's a common misconception that restaurants fail more than other businesses?
• What are some reasons you can think of that would support the food service industry being a stable business idea?
• What are some examples of restaurants in your area that either failed or have succeeded? What contributed to that outcome?

Here's the ready-to-go slides for this Question of the Day that you can use in your classroom. 

Behind the numbers (Fortunly):

"Beliefs about the restaurant business and its supposedly higher failure rate are not based in fact, according to data gathered from the BLS. On the contrary, the business failure rate in this industry has been dropping steadily for the past five years.

• Roughly 20% of restaurants fail within the first year, just like businesses in other industries. In fact, the restaurant fail rate from 2014 until now has been dropping to 10-12%.
• Roughly 30% of businesses in the accommodation and food services sector fail after two years, about 3-4% less than in other industries.
• Roughly 50% of businesses in the accommodation and food services sector fail after five years, just like businesses in other industries.
• Roughly 62% of businesses in the accommodation and food services sector fail after 10 years, 3-4% less than in other industries."

About the Author

Ryan Wood

Ryan is the Partnerships and Adoption Manager for Next Gen Personal Finance’s midwest region. He brings his experience as a former teacher, curriculum designer, and sales and marketing professional to state organizations and school districts in supporting the implementation of their personal financial education efforts. He graduated from the University of Wisconsin-Green Bay and earned his teaching credential from Saint Mary’s University in Winona, Minnesota. He proudly taught at two rural high schools in Wisconsin before transitioning to curriculum design at NGPF, and is now excited to be on the front lines in delivering the best possible financial education in the midwest. He and his wife have three beautiful daughters, each of which inspire him to share the impact of being sound financial stewards both at home and as lifelong learners.