Restaurant attrition: a longitudinal analysis of restaurant failures

Abstract

This piece of research reports on a five‐year continuing longitudinal study on restaurant attrition in El Paso, Texas, utilizing business listings provided by the Southwestern Bell telephone company. This study has two main goals: to track initial investment so that the relationship between investment and promotional activities can be determined; and to attempt to distinguish between business cessation due to failure, versus business cessation due to other causes. As hypothesized, independent restaurant operators had markedly lower expenditures on both initial investment and promotion. Franchise and corporate chains were characterized by high investment, and a correspondingly high success rate.