Comparing those two calculations over a twenty-year period,
we concluded that if 90 percent of restaurants actually failed
during their first year of operation,wewould see fewer restaurants
at the end of each year, a finding that is contrary to the
observed reality in the restaurant industry. In addition, when
90 percent failure was inserted in the equation, simulations
indicated that, in twenty years, the market would shrink from
1,500 units to 254 units, or a loss of 84 percent of the existing
restaurants. Taking that simulation to its inevitable conclusion,
no restaurants would remain in about ninety-four years.
These results are practically impossible under normal conditions
and run contrary to the National Restaurant Association’s
observed 3 to 4 percent growth rate (www.restaurant.
org).