[bobthepanda]

Most small restaurants fail within a year of opening. It’s a very tough business.

Some app claiming that you are partnering with them for delivery when that is not the case is not necessarily positive for a business given potential reputational risk.

[chrisseaton]

> Most small restaurants fail within a year of opening. It’s a very tough business.

Why is that? Seems straightforward - exchange food for money. Why's that so difficult to make work?

[bobthepanda]

1. there's lots of competition. restaurants are an extremely common business in existence and to start.

2. product market fit. you think your cooking is good. Do other people think your cooking is good? Do other people think your cooking is worth coming back for in a week, a month, or a year? You can try and do trendy things in food but these trends come and go quickly.

3. Rent and capital costs. It is expensive to fit a space for a kitchen, so you probably took a loan for that. Landlords are trying to squeeze every dollar they can out of you. There may be cheaper options than a leased space like a food truck or a sidewalk stand, but if they're even legal where you are the permits aren't cheap and there's usually a long waitlist. And better locations with more foot traffic cost more money.

4. Labor & management. Most people do not have experience running a restaurant's operations, which have to be tightly managed to both keep expenses down and keep service at decent levels. Bad service will turn customers away for good and bad word of mouth can snowball.

5. Margin. The tendency for new restauranteurs is that they underestimate their expenses and how much margin they need to be making. Prices need to be right for the market you're trying to serve, but you also need to not scare away too many customers. What pencils out in a home kitchen is not necessarily what pencils out in a restaurant.

[jldugger]

As far as I can tell, every home for sale or rent in america requires a kitchen. So basically everyone is in competition with them.