Why are restaurants so hard to become profitable?

Question

I’m always hearing about restaurants losing so much money in the first few years. Why?

In: 3

Answer 1

Restaurants are expensive to run. Rent, wages, food and (sometimes) franchise fees, and ton of other stuff (advertising, utility bills, insurance, general maintenace etc). Those are all recurring fees. There’s also the set-up fees such as buying equipment, tableware, etc.

They also have to sell at a reasonable price (nobody wants to pay $100 for a cheeseburger) and therefor hope to sell a large volume…. just to break even.