Most hospitality research has focused on the relative
financial performance of existing restaurants
instead of examining the basic nature of restaurant failures,
and most of these studies considered only bankruptcy
reports.1 Most bankruptcy studies are limited in
their scope, however, because many restaurant closures
result from change-of-ownership actions, rather
than bankruptcies. These change-of-ownership transactions
are treated as legal matters instead of actual
bankruptcy procedures and may not be included in
public records. Furthermore, because the focus of academic
research has remained primarily on bankruptcy
studies, the qualitative aspects of business failures
have received little attention. In writing this article, we
hope to determine the underlying factors that
determine the viability of a restaurant.