Restaurant failure statistics show a business exposed to several pressures at once: early establishment exits, thin operating margins, higher food and labor costs, workforce churn, debt, and softer traffic. The figures below combine historical BLS survival research, 2022 Census counts, National Restaurant Association surveys and operating data, and preliminary 2026 labor data. Measurement periods and geographies matter: these figures describe U.S. businesses and should not be treated as a universal failure rate for every restaurant.
Table of contents
- How often do restaurant establishments survive?
- How large is the exposed business base?
- Why profitability leaves little room for error
- Food and labor costs behind restaurant failure
- Workforce churn and operating strain
- Traffic, tourism, and the 2026 outlook
How often do restaurant establishments survive?
The best-known BLS survival evidence is not a restaurant-specific closure series. It tracks U.S. establishments across industries, so it provides context rather than a precise restaurant failure probability. In the BLS study of establishments born in the second quarter of 1998, about 60% were still operating 24 months later. That means roughly 40% had exited by the two-year point for that cohort. The largest survival drop came in the first six months, when 13% of establishments were no longer operating. Across two-digit U.S. industries in the same study, survival over the study horizon ranged from 53% to 74%. BLS, “Characteristics of Survival”
More recent BLS regional data show how much outcomes can vary by birth cohort and location. For establishments born in 2022, one-year survival ranged from 74.4% in the Mountain division to 78.6% in the Middle Atlantic division. The South Atlantic division recorded 76.1%, while the Pacific division recorded 77.1%. For establishments born in 2021, Pacific one-year survival reached 84.6%, the highest rate in the BLS regional series since 1994. At the other end of that series, South Atlantic establishments born in 2008 had a one-year survival rate of 71.4%. BLS, “1-year survival rates for new business establishments by year and location”
The same regional series shows that at least 5 of 9 census divisions experienced a rise in one-year survival for establishments born in 2020, followed by declines for the 2021 and 2022 cohorts. These figures do not identify which establishments were restaurants, but they show why a single headline closure percentage can mislead: survival changes with cohort, region, and economic conditions.
How large is the exposed business base?
Restaurant failure matters at industry scale because the underlying U.S. accommodation and food-services sector is large. The 2022 Economic Census counted 574,892 employer firms and 772,441 employer establishments in the sector. Those establishments reported $1,196,315,575,000 in sales, shipments, or revenue and $339,965,570,000 in annual payroll. U.S. Census Bureau, “Accommodation and Food Services: Summary Statistics,” 2022
The restaurant categories alone accounted for 254,201 full-service establishments and 271,243 limited-service establishments in 2022. The Census also counted 122,048 full-service restaurants using electronic devices for self-service table orders or payment. U.S. Census Bureau, “Establishments Using Electronic Devices,” 2022
For a more current but preliminary reference point, BLS reported 727,892 private food-services and drinking-places establishments in the first quarter of 2026. The difference between this figure and the 2022 Census totals reflects differences in industry definitions, coverage, timing, and statistical programs; it should not be read as a direct count of closures. BLS, “Food Services and Drinking Places: NAICS 722”
Why profitability leaves little room for error
Restaurant failure risk is closely tied to the distance between sales and costs. The National Restaurant Association reported that 42% of restaurant operators said their restaurant was not profitable in 2025. Its analysis estimated that total expenses for an average restaurant rose 36% between 2019 and 2026. A typical pre-pandemic restaurant had a pre-tax profit margin of roughly 5% of sales. National Restaurant Association, “Elevated costs continue to pressure restaurant profitability”
That cost increase creates a severe modeled squeeze. Holding 2019 sales constant, the NRA scenario estimated a typical restaurant would post a pre-tax loss of $432,600 after the cited cost increases. The same scenario estimated that $1,932,600 in sales—29% above 2019 volume—would be needed to break even. To preserve a 5% pre-tax margin, it estimated required sales of $2,033,600, or 36% above 2019 volume. These are scenario estimates, not measured results for every restaurant.
The NRA’s survey fielded in 2024 found that 85% of operators said their restaurant was less profitable than in 2019. Only 6% said it was more profitable, while 9% said profitability was about the same. Debt adds another layer: 65% of restaurants in that survey had taken on new loan debt since March 2020.
Operating data for 2024 put the median income-before-tax margin at 2.8% of sales for full-service restaurants and 4.0% for limited-service restaurants. The same 2025 Operations Data Abstract reported median prime costs of 65 cents per sales dollar for limited-service restaurants. National Restaurant Association, “New Resource … Operational Realities”
| Measure | Full-service | Limited-service |
|---|---|---|
| Median income before taxes, 2024 | 2.8% of sales | 4.0% of sales |
| Median food and non-alcohol beverage costs, 2024 | 32.0% | 32.4% |
| Median salaries and wages including benefits, 2024 | 36.5% | 31.7% |
Source: National Restaurant Association operating data for 2024. The percentages are medians, not a combined industry average.
Food and labor costs behind restaurant failure
The NRA’s 2024 industry report said average restaurant food costs were more than 20% higher than in 2019, while average restaurant wages were more than 30% higher. That combination can compress a modest margin even when sales remain stable. National Restaurant Association, “STATE OF THE RESTAURANT INDUSTRY 2025”
The 2024 operating data show how food costs differed by format and scale. Limited-service respondents reported median food and non-alcohol beverage costs of 32.4% of sales. Full-service respondents reported 32.0%. Within full-service restaurants, those with at least $2 million in annual sales reported 31.0%, compared with 33.7% for restaurants below $2 million in annual sales. National Restaurant Association, “Restaurant operators kept food cost ratios in check in 2024”
Labor differences were also substantial. Full-service respondents reported median salaries and wages including benefits of 36.5% of sales. Full-service operators reporting a pre-tax profit had median labor costs of 34.2%, while those reporting a loss had median labor costs of 42.9%. Limited-service respondents reported median labor costs of 31.7%; profitable limited-service operators reported 30.0%, compared with 34.1% among operators reporting a loss. National Restaurant Association, “Elevated labor costs had a significant impact on restaurant profitability in 2024”
Historical NRA Operations Data Abstract averages put labor including benefits at about 33% of sales for full-service respondents and 28% for limited-service respondents in the 2010, 2013, and 2016 reports. Because these are historical averages, they should not be treated as a directly comparable 2024 median.
Workforce churn and operating strain
High separation rates can make it harder to maintain service consistency, train new employees, and control labor hours. BLS reported an annual-average total separations rate of 7.1% for accommodation and food services in 2021, the highest among the listed major private-industry groups in that table. The rate was 7.0% in 2022 and 6.3% in 2023, then 5.4% in 2024 and 5.5% in 2025. BLS, “Annual average total separations rates”
Monthly data show continued movement. In August 2026, preliminary BLS data recorded 681,000 quits at a 4.6% quits rate in accommodation and food services, compared with 752,000 quits at a 5.2% rate in August 2025. Layoffs and discharges were 204,000 at a 1.4% rate in August 2025, 196,000 at a 1.3% rate in July 2026, and 187,000 at a 1.3% rate in August 2026, preliminary. BLS, “Quits levels and rates” BLS, “Layoffs and discharges levels and rates”
Other separations were 10,000 in August 2025 and 23,000 in August 2026, preliminary. Annual total separations fell from 11.313 million in 2022 to 9.198 million in 2024, then rose to 9.304 million in 2025. BLS, “Other separations levels and rates” BLS, “Annual total separations levels”
Traffic, tourism, and the 2026 outlook
Cost pressure becomes more dangerous when customer volume weakens. In the NRA’s 2025 report, 61% of restaurant operators said customer traffic was lower in 2024 than in 2023. The report also found that 39% said their restaurant was not profitable in 2024 and 53% still carried debt accumulated since the start of the pandemic. National Restaurant Association, “STATE OF THE RESTAURANT INDUSTRY 2025”
Tourism is another source of variation. Travelers and visitors typically account for 30% of dollars spent at U.S. restaurants, while they account for an average 41% of sales in the fine-dining segment. In 2025, 47% of operators said traveler-and-visitor sales were lower than normal; 8% said they were higher and 45% said they were about the same. National Restaurant Association, “Softer tourism spending…”
The industry’s aggregate outlook is not the same as an individual restaurant’s survival outlook. The NRA projected total restaurant and foodservice sales of $1.55 trillion for 2026. It also projected 15.8 million restaurant and foodservice jobs and more than 100,000 jobs added during the year. These are forecasts, not completed 2026 results. National Restaurant Association, “Persistent Cost Increases and Enduring Demand Will Shape the Restaurant Industry in 2026”
Taken together, the statistics point to a narrow operating margin: an establishment can face early-stage survival risk, food and wage inflation, labor replacement needs, debt service, and lower traffic at the same time. The figures do not establish that any particular restaurant will fail, but they identify the measurable conditions most associated with operating strain in the periods reported.