Why Restaurant Failed

In: Business and Management

Submitted By wanching
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Cornell Hotel and Restaurant Administration Quarterly http://cqx.sagepub.com Why Restaurants Fail
H. G. Parsa, John T. Self, David Njite and Tiffany King Cornell Hotel and Restaurant Administration Quarterly 2005; 46; 304 DOI: 10.1177/0010880405275598 The online version of this article can be found at: http://cqx.sagepub.com/cgi/content/abstract/46/3/304

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The Center for Hospitality Research of Cornell University

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© 2005 CORNELL UNIVERSITY DOI: 10.1177/0010880405275598 Volume 46, Number 3 304-322

10.1177/0010880405275598

Why Restaurants Fail by H. G. PARSA, JOHN T. SELF DAVID NJITE, and TIFFANY KING , Past research on restaurant failures has focused mostly on quantitative factors and bankruptcy rates. This study explored restaurant ownership turnover rates using qualitative data, longitudinal data (19961999), and data from Dun and Bradstreet reports. In contrast to frequently repeated statistics, a relatively modest 26.16 percent of independent restaurants failed during the first year of operation. Results from this study indicated marginal differences in restaurant failures between franchise chains (57 percent) and .2 independent operators (61.4 percent). Restaurant density and ownership turnover were strongly correlated (.9919). A qualitative analysis indicated that effective management of family life cycle and qualityof-life issues is more important than previously believed…...

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