The Truth About Restaurant Failure Rates

In a 2003 American Express ad, celebrity chef Rocco DiSpirito claimed that restaurants have a 90 percent failure rate. If you are planning on opening a full-service restaurant and bar in Texas, the information below should put your mind at ease.

2013 Statistics

  • 1713 Total New Businesses
  • 199 Closed by end of June 2014
  • 11.6% Failure Rate
  • 7 Months Average
  • 88.4% Success Rate

2012 Statistics

  • 1643 Total New Businesses
  • Closed within 12 Months
    • 277 Closures
    • 16.9% Failure Rate
    • 7 Months Average
    • 83.1% Success Rate
  • Closed by end of June 2014
    • 495 Total Closures (includes those from first 12 months)
    • 30.1% Failure Rate
    • 13 Months Average
    • 69.9% Success Rate

2011 Statistics

  • 1983 Total New Businesses
  • Closed within 12 Months
    • 247 Closures
    • 12.5% Failure Rate
    • 6 Months Average
    • 87.5% Success Rate
  • Closed within 24 Months
    • 570 Total Closures (includes those from first 12 months)
    • 28.7% Failure Rate
    • 13 Months Average
    • 71.3% Success Rate
  • Closed by end of June 2014
    • 729 Total Closures (includes those from first 24 months)
    • 36.8% Failure Rate
    • 17 Months Average
    • 63.2% Success Rate

How Did You Get These Numbers?

We used data from OnTapReport.com to make the calculations. The numbers stated above are based solely on establishments that hold an on-premise liquor license in the state of Texas. These establishments include restaurants, bars, nightclubs, adult entertainment, sporting/arts venues and the like. We considered a business to open based on the first month they reported a non-zero alcoholic beverage sales number and closed based on the last month they reported a non-zero alcoholic beverage sales number. For the tail end of the time frame we used a reported non-zero alcoholic beverage sales number after June 2014 as the cut off to determine if a location was still in business as of the writing of this article. Our statistics don't include ownership changes or name changes unless the location was required to get a new alcoholic beverage permit.

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Search on-site alcoholic beverage sales numbers for ~20,000 Texas restaurants, bars and nightclubs for free!