As with all business organizations, restaurants
follow certain stages in a life
cycle.7 At any point along these life-cycle
stages, a business can suffer setbacks catastrophic
enough to lead to failure.
Throughout the life cycle, the first stages
are the most vulnerable, which is why the
highest proportion of businesses that close
are relatively new.8 This “liability of newness”
has linked organizational adolescence
to increased organizational mortality
rates.9 One reason for early failure is
that new businesses typically have limited
resources that would allow them to be
flexible or adapt to changing conditions.