A strategic assessment and evaluation of the major factors behind the high failure rate of many restaurants in the city of Beirut-Lebanon

Abstract

Only 65% of restaurants survive beyond their fifth year, despite being a lucrative industry. Restaurant failure is prevalent in contemporary global business environments, including Lebanon. This study sought to explore external, internal, and personal factors that contributed to high closure rate of restaurants in Beirut despite its dining potential. A qualitative study using semi-structured interviews solicited owners' perception of restaurant failure. Using snowball sampling, we interviewed 28 restaurateurs who ceased operation before their fifth year of operation. Findings found internal more than external factors accounted for restaurant failure, with personal factors playing a significant role. The research recommends restaurateurs focus on prudent financial management by investing more on professional development, human resource management and marketing, and technological aids, and less on aesthetic or high-end items at start-up that reduce return on investments. Moreover, owners should develop and implement pragmatic and consistent business strategies to improve brand positioning and operational coherence.