ONLY webinars - visit
Advanced Search
Home / Features / 5 Smart Models And Practices That Can Increase The Survival Rate Of New Restaurants
Special Features

5 Smart Models And Practices That Can Increase The Survival Rate Of New Restaurants

Busy lifestyles and a flourishing tourism industry are just two of the drivers behind the increased demand for more restaurants. It's no wonder the restaurant industry has been on the rise for the last five years.

On the other hand, the swelling market has created a fiercely competitive industry. Studies reveal that many new restaurants close shop soon after opening. Around 70 percent of new dining establishments close or file for bankruptcy two years after becoming operational.

According to business experts, aside from the cutthroat competition, the startup cost for restaurants can be difficult to recoup. Plus, the fixed costs of operations can often leave no profits. Thankfully, business strategists and chefs are exploring new models and practices to improve the survival rate of startup restaurants. Here are five that are quite successful.

1. Multiple Food Delivery Systems

In a lot of countries, food delivery has grown to be an absolute necessity and not just a practice for competitive advantage. In countries like South Korea, Japan, and the Philippines, this is done to great efficiency because different food logistics companies provide support to the restaurant industry.

Using multiple food delivery systems allows restaurants to cater to more customers by getting food to them wherever they may be. Making this completely manageable is a food delivery tracking system that makes monitoring delivery orders through different food logistics companies a breeze.

Other technological provisions that make multiple food delivery services successful are online payment systems or digital wallets. Through these, deliveries are not only made faster but also less risky for restaurants.

2. Off-Hour Rental Arrangement

This unique arrangement is the brainchild of an IT company. This works by matching a business that only operates at fixed hours with another business that would run only during the off-hours of the first business.

This provides the "mother business" a chance to gain passive income by renting out her commercial space and even her tools and equipment when she's not using them. For example, a breakfast joint that only operates from 4 AM to 11 AM can rent out its space to a chef that serves dinner from 4:30 PM to 11 PM.

The other business pays a rather affordable rent to the breakfast joint and does not need to purchase its own tools and equipment until it's financially ready to do so. This business model makes it so much easier and more affordable for chefs to get their business off the ground and secure a loyal following.

3. Meal Subscriptions

Meal subscriptions allow new restaurants to create a consistent market. Customers can place their orders for an entire day or week online. The restaurants' job is to stay on top of these orders and deliver these according to customers' specifications. Doing this can be challenging, but it can be aided by today’s smart restaurant management apps.

Through meal subscriptions, restaurants automatically secure more sales for a specific period. At the same time, they can create a relationship with their customers wherein upselling is easy, and they can provide exceptional customer service to ensure repeat transactions.

Another reason why the concept of meal subscriptions works is how so many people these days do not want to have to make a new decision every mealtime. The subscriptions come in meal sets and can also be customized by customers. The provision of optimum convenience never fails to draw people in.

4. Shorter Operations

Limiting operations to, say, just five days a week can lower or reduce some of a restaurant's operational expenses. But, it is proving to be an effective strategy in boosting productivity and ensuring employee satisfaction.

Shorter operations create a sense of urgency in the target market. A lot of the restaurants that have employed this tactic found that they no longer suffer as much from slow days. At the same time, they have gained the opportunity to elevate the quality of their products and services, which allows them to charge higher.

But, of course, it is imperative to consistently deliver exceptionally high-quality food and services. These are what will create stronger demand and a sense of urgency. Without these, nothing will justify the limited day and hours of operations, as well as the higher prices of the restaurant offerings.

5. Rotation Chef Competition

Top restaurants host chef competitions and they allow new chefs to practice their skills and also understand their target market better. Meanwhile, restaurants that hold these chef competitions get the chance to increase their sales by being able to offer a wider and seemingly random variety of dishes.

What happens in this unique business model is the restaurants lend their space, equipment, ingredients, and other resources to new chefs. The chefs, on the other hand, are challenged to create an ingredient-focused menu (such as imported premium veal meat) that will appeal to customers.

It's a win-win situation for both the restaurant and the new chefs. The restaurant continues to earn, and the chefs get the experience they need to take their career further. Typically, when a chef wins in the competition, they get to secure a place in the restaurant crew and establish credibility and patrons that eventually will work to their advantage when it's time to set up their dining establishment.

Indeed, there's no overlooking the fact that competition among restaurants is stiff. But, with the solutions provided above, new restaurants have the means to avoid falling into the trend of short-lived operations.


Ahmad Alzaini is the co-founder and CEO of Foodics, a fast-growing foodtech startup. A businessman by nature, Alzaini is an app aficionado, developing businesses in Saudi Arabia within several industries. Today, Foodics has extended to new markets across the MENA region, processing over 1 billion transactions, and offering the latest technology in POS and restaurant management.

We accept Guest Posts

  All fields are mandatory
Your Name
Your Comments
 Max 250 characters - Word Count :
Image Verification
Change Image


View Special Features by Category
Airlines & Airports
Art & Gallery
Banks & Financial sector
Car Industry
Dubai Government
Dubai Metro
Education & Institutions
Events & Occassions
Exhibition Center
Family Shows
Food & Beverages
Free Zones
Golf Clubs
Government Departments
Health & Fitness
History & Culture
Hospitals & Clinics
Hotels & Hospitality
Identity cards
Internet Services
Media & News
Online Food Service
Online Store
Other Emirates
Parks & Beaches
Precious Metals
Real Estate & Property
Religion & Culture
Resorts & Clubs
Shopping Malls
Special Centres, Groups & Communities
Sports & Events
Sports Bars
Things To Do
Trade Fair
Travel & Leisure
UAE Market News
VIP Services
Wedding Planners

Back to top

News Alerts
News Alerts
Stay ahead with abu dhabi news
dcg mobile
adcg Mobile
With you wherever you go
rss feed
RSS Feeds
Get the latest
dubai blog
Abu Dhabi Blog
Your space, your voice
ADCG at a glance