The restaurant industry is extremely competitive, and the survival rates over five and 10 years could make some ambitious dining entrepreneurs think twice about entering the business.
The chance of a restaurant surviving its first year in business is pretty good, with about 83.1% of new restaurants making it through their first year unscathed, according to statistics from the U.S. Bureau of Labor Statistics, Owner.com reported.
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However, the business gets tougher as the years pass, and only 51.4% of restaurants survive five years in the business, according to bureau statistics.
Related: Major restaurant chain quietly closes several locations
Operating a restaurant for 10 years gets even harder, as the survival rate shrinks to 34.6% of eateries staying in business for a decade.
Major restaurant chains tend to have the financial backing to remain in business for years until financial distress gets so great that some companies need to file for bankruptcy and close locations.
Several chains facing economic challenges filed for Chapter 11 bankruptcy and closed several restaurant locations last year.
Restaurant chains close dozens of locations
Red Lobster in May 2024 filed for bankruptcy and closed 187 locations. It emerged from Chapter 11 in September 2024 and now operates about 478 locations in 44 states.
Italian restaurant chain Buca di Beppo filed for Chapter 11 bankruptcy protection on Aug. 4, 2024, to reorganize its business with the support of its lenders, after closing 13 underperforming locations.
TGI Fridays had 161 U.S. locations when it filed for Chapter 11 bankruptcy on Nov. 2, 2024, to reorganize and close restaurants. The chain closed 76 locations over the next five months and was operating 85 U.S. locations by April 2025.
Independent restaurants frequently close as well, including one well-known business that operated for 40 years.
Fog City, an iconic San Francisco restaurant, permanently closed.
Fog City
Fog City closes restaurant after 40 years
Legendary San Francisco restaurant Fog City, one of the city’s most popular establishments in the 1980s and 90s when it was known as Fog City Diner, permanently closed its business on May 30 after serving customers for 40 years.
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“With a heavy heart, I share some difficult news. Fog City has closed permanently with the last day of service being May 30, 2025. Thank you for the 40 years of patronage,” Fog City’s Brett Maurice said in a statement on the company’s website.
The restaurant opened in 1985 as Fog City Diner with a shiny chrome exterior and a large blue neon sign, and it remained popular through the end of the 20th century.
More closings:
Popular retail chain to close unprofitable store locationsBankrupt retail chain unloads store leases, key assetPopular discount retailer files bankruptcy, closes all stores
Fog City Diner’s popularity was fueled by national exposure from a 1990 Visa credit card commercial that described the restaurant as “elegant as a formal dining car” and encouraged customers to try their red curry mussel stew or grilled chicken with roasted peppers.
The commercial also advised diners to “leave your troubles behind, but bring your Visa card, because at Fog City, they take things easy but they don’t take American Express.”
The restaurant was also featured in the 1993 film, “So I Married an Axe Murderer,” starring Mike Myers.
But as the new millennium progressed, the restaurant was re-imagined by its founders Bill Higgins and Bill Upson, according to Fog City’s website.
“Maintaining the energy and approachable spirit of the beloved original, Fog City offers innovative menus in a sophisticated, warm and open space created by Bay Area architect Michael Guthrie.
The shiny chrome exterior was replaced with a wood exterior in different shades of brown and a new name on the building, Fog City, in 2013.
The building’s location is steeped in history, according to the Fog City website.Â
Before Fog City Diner opened, it had been occupied by other establishments, including a restaurant that served sailors before being shipped out in World War II, a railroad building servicing trains in San Francisco’s first railway, and as a docking point for ships during the California Gold Rush.
Related: Iconic Baskin-Robbins local ice cream rival closes after 40 years
