2014/10/31 by Tian Luo, Luo, Tian, Philip B. Stark +1
Business, Management and Accounting · Economics, Econometrics and Finance · #Applications (stat.AP) #Consumer Market Behavior and Pricing #Economics of Agriculture and Food Markets #FOS: Computer and information sciences #Firm Innovation and Growth
paper · pdf · doi:10.48550/arxiv.1410.8603
openalex publication_date 2014/10/31 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
Do 9 out of 10 restaurants fail in their first year, as commonly claimed? No. Survival analysis of 1.9 million longitudinal microdata for 81,000 full-service restaurants in a 20-year U.S. Bureau of Labor Statistics non-public census of business establishments in the western US shows that only 17 percent of independently owned full-service restaurant startups failed in their first year, compared with 19 percent for all other service-providing startups. The median lifespan of restaurants is about 4.5 years, slightly longer than that of other service businesses (4.25 years). However, the median lifespan of a restaurant startup with 5 or fewer employees is 3.75 years, slightly shorter than that of other service businesses of the same startup size (4.0 years).