Challenges for Restaurant Operators

Here’s the raw truth. I would never go into the F&B business. Ever. I’ve seen it up close, and it’s one of the most cutthroat, unforgiving industries on the planet. Margins are razor thin. Costs are rising. Staffing is a war zone. Every day is survival. You’re juggling insane food prices, unreliable suppliers, nonstop turnover, and guests who expect perfection and will rip you apart online if you miss. And yet, every single day, operators show up and deliver unforgettable experiences. That takes grit. That takes obsession. When I work with F&B clients, I don’t just show up, I over deliver! I fight for them because I know what they’re up against. These are not side hustlers. These are warriors. People who bleed for their business, miss holidays, work through exhaustion, and carry the weight of every single guest. Most people couldn’t last a week doing what they do. This industry is global and brutal. Costs fluctuate every week. Shipping delays kill consistency. Quality staff are impossible to find and even harder to keep. Diners want luxury service at casual prices, and they want it fast, perfect, and wrapped in a story. There’s no forgiveness. One bad shift and your reputation takes a hit. You either evolve fast or you disappear. So if you’re in the game, here’s what you need to hear: 1. Treat your staff like gold. They are your only edge. Elevate them. Pay them. Train them. Respect them. Make them feel like they matter because if they don’t, they’ll leave, and you’ll never build momentum. 2. Tell your story louder. If your food is fire but your brand is invisible, someone with less talent and more content will beat you every time. People don’t just want the plate, they want the people, the mission, the vibe. 3. Simplify everything. Your menu is too long. Your ops are too messy. Focus on what you do best and make it world-class. Build a signature item. Own it. 4. Build emotional loyalty. The F&B brands that win in 2025 are the ones that connect. Give people a reason to come back that isn’t just the food. Make them feel something. Make them belong. I’m not in the F&B business, but I’ll go to battle for the people who are. I respect the grind. I admire the passion. And I’ll always go the extra mile for my F&B clients because they do it every single night for their guests. This industry is hard. That’s why it’s worth fighting for!

Most restaurants don’t fail because the concept is bad—they fail because the fundamentals were ignored. Before you sign a lease or start hiring, make sure you’ve accounted for the following dealbreakers: 1️⃣ The hidden costs that will blindside you. While you're negotiating rent, utility taxes and kW/h rates are silently destroying your margins. I've seen operators lose 5 points of profit vs. their projections because they never compared these "boring" numbers between markets. 2️⃣ Construction costs will shock you. Same restaurant. Same design. Huge price difference depending on location. I can build in some markets for 35-40% less than the DMV or pay double in others. That's not a budget line item – that's the difference between profitability and bankruptcy. 3️⃣ The local DNA test (most critical). Your concept might be perfect... for the wrong market. Every community has dining DNA. What they love, why they love it, and the stories behind their loyalty. Ignore this, and you'll have a beautiful restaurant that locals will politely avoid. We’ve all watched million-dollar concepts fail because operators assumed what worked in NYC would work everywhere else. #businessadvice #restaurateur #businessowner #newrestaurant #restaurantopening

Fact: The average restaurant runs on 5% profit. Compare that to manufacturing, where margins average 10–13%. Restaurants are one of the lowest-margin, highest-risk businesses out there. And yet, the common advice is: “Just sell more” or “raise your prices.” But let’s be honest—are we expecting people to suddenly start spending 30–40% more on dining across the country to help raise the overall profitability levels? We’re all chasing the same dollars in a crowded market. We are like Alice in Wonderland chasing the white rabbit. So, if revenue can’t scale fast enough, what can? Profitability. Through systems. Most restaurants aren’t unprofitable (or barely profitable) because people aren’t buying. (Yes, some are) They’re unprofitable because they’re not being run like real businesses. Passion is essential. But passion without structure leads to chaos: - Inconsistent execution preventing guest loyalty which in turn prevents repeat revenue. - Procurement issues and Purchasing controls - Inconsistent labor schedules - Data visibility or lack thereof At Accross Restaurant Consulting Services, we’ve helped restaurants save over $40 million, not by guessing—but by building systems that: - Reduce food cost (10–20%) - Control waste - Manage labor (10–15%) But most importantly deliver CONSISTENCY across locations. When the systems work, everything gets better: ✔ Profit goes up ✔ Employee pay and retention goes up, driving competence ✔ Guest experience improves ✔ Growth becomes sustainable If you're scaling or struggling, stop chasing sales alone. Fix the machine. That’s how restaurants become businesses—not just dreams.

An interesting development here from 7shifts' just-released 2025 Restaurant Labor Cost and Profitability Report: Food inflation is now the No. 1 restaurant concern (it's historically been labor), with 52 percent of polled operators ranking it as their primary challenge and 86 percent including it in their top three. Labor costs closely followed as the second most-pressing issue, ranked first by 31 percent of operators and in the top three for 83 percent. And one more point to highlight: Cross-training has become the top labor cost management strategy. Most restaurants (about 68 percent) said they are now training their staff to handle multiple jobs instead of just firing people. Other approaches included changing the number of staff hours they schedule (45 percent), making their processes work better (41percent), and some were still reducing their headcount (39 percent).

Why do restaurants struggle to scale? It's not the food. Many restaurants serve great food. Stunning interiors. 5-star reviews. But still, growth stalls. Often because scaling a restaurant takes more than what’s on the plate. I really believe the top 3 reasons restaurants fail to scale: - Poor financial planning - High staff turnover - Inconsistent operations and guest experience I’ve seen it happen in both #NewYork and #Dubai, but in different ways: 🗽In New York, high labor costs and brutal competition force operators to be laser-focused on margins and operational efficiency. You see it in neighborhood restaurants that rush to close your cheque so they can turn tables faster. 🕌 In Dubai, the pressure is often around image with heavy spend on PR and interiors, but weak backend systems and a transient workforce that affects consistency. Scaling isn’t about doing more. It’s about doing better. The best operators I’ve seen, regardless of city: ✅ Plan their finances like CFOs ✅ Standardize operations across every shift with great platforms ✅ Prioritize culture, training, and retention It’s not always flashy. But it’s how you build something that lasts, in any market. #Restaurants #Revenue #HospitalityTech #Servme

Want to know what today’s top operators are doing right? Check out these highlights in an excellent report from The James Beard Foundation and Deloitte 👇👇 1/ The pricing lever is tapped out Restaurants that raised menu prices by 15%+ reported lower profit and lost guests. And the high-margin favorites, such as alcohol and add-ons? Guests are skipping them. If you must raise prices, conveying value is key. The operators winning here are doing it through story-driven menus, sharper hospitality standards, and unexpected moments that guests actually remember. 2/ Social gets attention; in-person service earns loyalty Restaurants continue to pour energy and resources into visual social media, but viral TikToks and Reels don’t always translate to revenue. That’s why nearly half (44%) of restaurants are doubling down on IRL experiences. Social posts might get the click, but the in-person experience is what builds staying power. More tableside storytelling, more guest engagement, more “wow, I didn’t expect that.” 3/ Wage growth + non-compensation benefits = a winning recipe for staffing Over 70% of restaurants hiked wages 10%+ last year. But when cash is tight, smart operators offer something else to keep staff around: a clear path up. Restaurants with career advancement programs retain staff 3.5x more often. They're also 20% better at attracting new hires. The paycheck matters, but so does their future. These were just a handful of the fantastic data and research in the report. If you haven’t already, get a chance to read the whole thing (🔗in comments). And if you know a restaurant operator who needs to see this, repost ♻️ with your network. #restaurants #hospitality

The National Restaurant Association just released a statement on President Trumps just-announced tariffs -- see link below. I will be more blunt than the NRA; this could be anything from a serious problem to catastrophic for all but low-price QSRs that might benefit from consumer trade-down. There are three levels of pain for restaurant operators: first and most direct, it will raise their costs to operate; second, it will require raising prices (although probably less than is required to maintain margins; in the short-run, I assume most operators will eat some margin to retain customers); third, it will lead to less discretionary income for consumers generally, which will of course impact overall restaurant spending. President Trump has acknowledged short-term pain, but how short-term will it be? We are setting ourselves up for stagflation, and those of us who lived through the late 1970s know how long and how hard it can be to break that cycle. What once looked like a soft landing is now looking more like a crash landing, and casual dining in particular can't absorb many more hits. For concepts in financial trouble, there will be no "short-term pain." Once forced out of business, they are gone for good. Some of those concepts probably should go out of business, but there will be good ones that will also pay the price. As I write this, Dow futures are down about 1,000 points. I am sure this will be showing up in a lot of restaurant and retail stocks tomorrow. I hope common sense regarding tariffs prevails in April or a grand strategy that I currently don't understand reveals itself. Otherwise, this is setting up to be an extremely difficult year. https://lnkd.in/gg-sZReW

Grateful to be included in this timely piece by Restaurant Business Magazine. Thank you Jonathan Maze and the editorial team for shining a light on what operators are really up against. Yes, tariffs are raising concerns—but what’s more alarming is the shift in consumer sentiment. When people hesitate to check their 401ks, that anxiety shows up in dining behavior long before it hits other sectors. As I shared in the piece: “You may pump gas once a week, but you probably eat three times a day.” There are glimmers of hope, particularly on food costs. As Mark Bucher put it: “This year, we’re actually going to see [beef] at a five-year low.” That’s meaningful relief for operators, and we should take the win. But uncertainty around pricing, development, and consumer demand remains. In this kind of environment, we’re focused on removing complexity—streamlining costs, simplifying operations, and helping restaurants hold onto more of what they earn. That thinking is behind several recent moves we’ve made, including how we approach order aggregation (it’s now free, if you missed the big news: https://bit.ly/42pAzwZ). As Lawrence Kim of IHOP noted, operators are monitoring everything daily—costs, supply, sentiment. That level of vigilance is the new norm, and the strongest brands will be the ones that stay both nimble and grounded. Full article here: https://lnkd.in/eVF4SVC5

Haven’t updated your menu prices lately? It’s costing you. In today's challenging economic landscape, regular price adjustments have become an operational necessity for restaurants. With fluctuating costs of goods, labor, and supply chain pressures, staying static can erode profit margins and undermine the customer experience. 𝐏𝐫𝐨𝐟𝐢𝐭𝐚𝐛𝐢𝐥𝐢𝐭𝐲 𝐓𝐢𝐩 𝟖 𝐨𝐟 𝟏𝟎: Regularly adjust your pricing to reflect real-time costs and to protect your profit margins. 1. Understand Costs to Control Them Prices aren’t just numbers; they’re a reflection of your operating reality. Without a precise understanding of your Cost of Goods Sold (COGS) and the influence of market dynamics, you risk underpricing or overpricing. Weekly inventory checks are vital to track real-time shifts in your food and supply costs. 2. Dynamic Pricing Protects Margins Treat menu prices as a living equation tied to your costs. Regularly review your pricing to account for rising commodity prices, supply chain disruptions, or changes in portion sizes. Customers may notice and value transparency about why prices change rather than silent hikes or hidden cuts. 3. Customer Retention Through Value Instead of steep discounts, use strategic bundling or loyalty programs to emphasize value. Deals like pairing a best-seller with a new dish not only promote your offerings but also balance profit margins. 4. Small Changes Make Big Impacts A minor price adjustment can significantly affect your profitability. For example, a $0.25 increase on a popular item sold 1,000 times a month equals $250 in additional revenue—a buffer against rising costs. 5. Data-Driven Decisions Build Trust Leverage tools like POS systems and industry reports to understand customer behaviors and preferences. Align pricing strategies with your business goals while remaining sensitive to your customer base's willingness to pay. 💡 Pro Tip: Make a checklist of everywhere that your prices need to be updated, from POS to Catering Menus to Third Party Delivery Services. The days of static pricing are over. The key is not to increase prices arbitrarily but to do so informed by data, operational insights, and market trends. When was the last time you adjusted your pricing? #Restaurants #RestaurantManagement #RestaurantIndustry #Inflation #BusinessStrategy #CustomerExperience #Profitability

Wanna know why this picture is worth over $500,000 if you are running multiple restaurants? When I was a regional restaurant manager, I came across this scene in one of our locations: a trash can filled with three used towels and four wool scrubbers. I dug into why this was happening and discovered that someone cleaning up after lunch would use a towel once, throw it away, and grab a new one. Same with the scrubbers. It may seem like a small thing, but what I saw in that trash can was $5 worth of unnecessary cleaning supplies. Now, let's break that down. If this happened three times a day, every day for a year, that’s $5 x 3 times a day x 365 days = $5,475 a year for just one location. With 30 locations, that’s $164,250 a year. And over five years? ‼️ A STAGGERING $821,250‼️ This wasn’t just about the dollars—it was about creating a culture of efficiency and sustainability. Seeing money literally being thrown away was a wake-up call 💸 Leading multiple restaurants, I knew we could have redirected those funds towards: 🔹Needed equipment 🔹Employee incentives 🔹Enhancing the guest experience. ✅ In order to address these issues and prevent them from growing into those huge dollars, I relied heavily on side-by-side location reports. These reports were my secret weapon. By comparing data, I could see where our costs were off the charts and where we needed to focus our efforts. 📊 If one location was spending significantly more on cleaning supplies than others, I knew exactly where to start my research and coaching upon entering the location. ✅ This approach allowed me to make my visits more effective and impactful. I wasn’t just walking in blindly; I had a clear picture of where the pain points were. This allowed me to: 🔹 Have meaningful conversations with the team 🔹 Identify wasteful practices 🔹 Implement changes for immediate savings. For multi-location owners and operators, understanding where every dollar goes is crucial. It’s these little insights and attention to detail that can transform your operations and boost your bottom line. Building a business of multiple restaurants is far too much work and effort to literally throw away the fruits of your labor. What data do you find the most effective in helpful to spot potential issues quickly? #RestaurantManagement #CostSavings #OperationalEfficiency #RestaurantLeadership #Sustainability #BusinessGrowth #RestaurantOwners #ProfitandLoss #Reporting #EffectiveLeadership #Training