News

Ohio State study finds restaurant failure lower than believed

September 22, 2003

COLUMBUS, Ohio. -- A new study from The Ohio State University has found the restaurant industry failure rate to be far lower than many have long believed.

According to Columbus Business First, H.G. Parsa, the study's author and an associate professor of hospitality management at OSU, said his study found that the failure rate of the Central Ohio restaurants he examined between 1996 and 1999 was 57 percent to 61 percent. That level, he said, is "still high, but more in line with other businesses."

The report also said "common business wisdom is that restaurants fail at an alarmingly high rate, maybe as high as 90 to 95 percent in the first year," the report says. "In fact, the alleged 90 percent failure rate was repeated during each episode of the recent NBC reality show, 'The Restaurant.'"

Parsa reviewed other published studies that also suggest failure rates of restaurants to be closer to 60 percent or less after three years to five years in business.