For over 6 years working with restaurants, I’ve observed that the industry frequently encounters management and operational challenges that can impact a restaurant’s profitability and customer satisfaction.
Addressing these issues proactively is essential for restaurant business owners to maintain steady operations and ensure long-term success. For instance, approximately 17% of restaurants close within their first year, underscoring the importance of effective problem-solving strategies.
In this guide, I will discuss 10 of the most common restaurant problems and provide actionable solutions for each, drawing from industry insights and best practices to help your establishment thrive.
Key Takeaways
- High Commission Fees: Third-party platforms charge up to 30% per order. Implementing your own online ordering system helps to reduce these fees and gives you more independence.
- Inefficient Delivery Management: Difficulty in managing delivery drivers affects service efficiency.
Dispatch delivery with on-demand couriers, or use restaurant delivery software to manage your own fleet. - Limited Marketing Efforts: Limited marketing reduces customer interest. Leverage integrated marketing tools, use marketing automation, and maintain an active social media presence.
- High Employee Turnover: High turnover increases recruitment and training costs. Offer competitive wages and use tech like QR code menus and kiosks to reduce labor costs.
- Poor Food Quality: Poor food quality damages a restaurant’s reputation, so set SOPs, provide regular training, and conduct quality checks.
- Lack of Online Orders: Lack of online orders reduces revenue. Boost brand awareness with targeted marketing, social media, loyalty programs, and optimize your online ordering system.
- Negative Reviews: Unaddressed negative reviews harm reputation. Boost it by monitoring reviews, responding to all feedback, and offering discounts to customers.
- Non-Optimized Menu: An overly extensive menu overwhelms customers and decreases conversions. Focus on specific cuisine, use menu engineering, and keep your menu updated.
- Lack of Technology Integration: Overcome integration challenges by implementing an all-in-one restaurant management solution with an online ordering system, marketing tools, and free setup service.
- Poor Financial Management: Rising costs and complex finances strain profitability. Create a budget, use accounting software, and regularly analyze financial performance.
What are the Most Common Restaurant Problems Business Owners Face?
Restaurant owners often face a range of challenges that can impact their operations and profitability.
“Many of the same challenges from 2024—labor costs, food costs, and staffing—are expected to persist. Quick-service operators cite labor costs and hiring as their biggest hurdles, while full-service restaurants are most concerned about food costs.”
Source: QSR Magazine
Below, I describe the most common problems restaurant owners face and provide actionable solutions to help you overcome them and improve your restaurant’s performance.
1. High Commission Fees
Many restaurant owners face the concern of high commission fees, especially independent restaurants that rely on third-party food delivery platforms.
Uber Eats commissions, DoorDash fees, and Grubhub fees can significantly eat into a restaurant’s profits, leaving owners with less control over their margins.
These fees are frequently a significant financial burden, especially for smaller establishments trying to stay competitive.
One of our clients, Sushi Kushi, saved over $1,500,000 in third-party commissions over ten years of partnering with UpMenu.
Read the full case study.
Solution: Implement an online ordering system
Implementing an online ordering system allows restaurants to receive orders directly, bypassing high commission fees from food delivery apps like DoorDash and Uber Eats.
This solution helps lower operational costs and boosts customer convenience, as customers can easily place orders through the restaurant’s website or a restaurant mobile app.
It also enhances operational efficiency by streamlining the order process, reducing errors, and speeding up service, ultimately increasing profitability.
2. Inefficient Delivery Management
Another problem that restaurants face in their daily operations is ineffective delivery management.
Many restaurants struggle with hiring and managing their own delivery drivers. For some, the issue lies in not having their own drivers at all, relying solely on third-party delivery services. For others, poor management can lead to delays, miscommunications, and failure to meet customer expectations even with in-house delivery staff.
These inefficiencies can ultimately impact both customer satisfaction and operational costs, which makes effective delivery management a crucial aspect of running a restaurant successfully.
Solution: Dispatch deliveries with on-demand couriers and use delivery management software
Not having your own delivery drivers is not necessarily a concern. Restaurants can use third-party delivery services and dispatch delivery efficiently, ensuring fast and reliable service without the overhead costs of hiring and managing drivers.
If a restaurant does have its own delivery drivers, restaurant delivery software can be used to manage them effectively, optimizing routes, tracking deliveries in real-time, and ensuring timely service.
This combination of delivery on demand and restaurant delivery software improves customer convenience, reduces operational inefficiencies, and helps restaurants scale their delivery operations smoothly.
3. Limited Marketing Efforts
Many restaurateurs struggle with limited marketing efforts, often due to a lack of time or resources. With the constant demands of running a restaurant, marketing activities can fall to the bottom of the priority list.
Some restaurant owners even believe that marketing is unnecessary, assuming that word-of-mouth and repeat customers will suffice. However, relying solely on these methods can hinder growth and prevent the restaurant from reaching a wider audience.
- “About 80% of customers expect restaurant brands to have a social media presence and interact with them.” Source: Restaurant365
- “Over 70% of customers say they are more likely to visit a restaurant with personalized promotions.” Source: Menu Tiger
According to the National Restaurant Association, nearly two-thirds of restaurant operators (64% of full-service and 62% of limited-service) prioritize online marketing to attract and retain customers. This includes maintaining social media profiles, running digital ads, implementing loyalty programs, and optimizing websites for search engines, including voice search.
Solution: Boost visibility with integrated marketing tools and automation
To overcome limited marketing efforts, restaurant owners can boost their visibility by integrating technology solutions and automating marketing tasks.
For example, online ordering systems with built-in restaurant marketing tools allow you to leverage customer data to create personalized marketing campaigns.
Use marketing automation to send targeted emails, SMS, and promotional messages, ensuring timely communication with customers.
Additionally, utilize restaurant social media marketing to engage with your audience and promote offers.
If you don’t already have one, create a restaurant website, keep it updated, and make sure it’s mobile-optimized to enhance user experience and attract more customers.
4. High Employee Turnover
High employee turnover is a common issue in the restaurant industry, and it comes with significant costs.
When employees leave, restaurants lose experienced staff and incur the expenses associated with recruiting, hiring, and training new employees. This constant cycle of turnover disrupts operations, reduces efficiency, and leads to a loss of valuable time and money.
High employee turnover can also create a sense of instability and uncertainty among the remaining staff. This can lead to lower morale, decreased job satisfaction, and increased stress, impacting the overall work atmosphere.
Solution: Reduce labor costs with competitive pay and tech solutions
To address high employee turnover, focus on offering competitive pay, benefits, and incentives.
You can foster a more loyal and dedicated workforce by hiring people who are interested in building their careers in your restaurant. Also, regular training and creating a positive work environment are essential for employee retention.
Additionally, incorporating technology solutions like a QR code menu and self-service kiosks can help reduce the number of employees needed on the floor, ultimately reducing labor cost.
Optimizing restaurant HR strategies and leveraging tech tools helps create a more efficient operation, while keeping turnover rates low.
5. Poor Food Quality
Maintaining consistent food quality is crucial for restaurants to uphold a positive reputation and retain loyal customers.
Food safety and quality consistency directly impact a restaurant’s success. Customers who experience inconsistent food quality may hesitate to return, leading to a loss of regular business.
Additionally, failing to adhere to health and safety regulations can result in fines or even the closure of the restaurant, further damaging its reputation.
“Many restaurant customers—including 64% of fullservice customers and 47% of limited-service customers—say their dining experience is more important than the price of the meal.”
Source: National Restaurant Association
Solution: Ensure Consistency with SOPs and quality control
Establish and follow standard operating procedures (restaurant SOP) for all menu items to maintain consistent food quality. These SOPs ensure that each dish is prepared to the same high standard every time, regardless of the staff member.
Regular restaurant training and quality control checks are essential to uphold these standards.
Additionally, monitoring customer feedback allows you to quickly identify any issues and make improvements, ensuring that food quality consistently meets customer expectations and complies with health and safety regulations.
6. Lack of Online Orders
A lack of online orders significantly reduces a restaurant’s potential revenue. This problem often arises from a poorly designed website that is unintuitive or difficult for customers to navigate, leaving them unsure of how to place an order.
Additionally, low website traffic and an unrecognizable brand further contribute to the lack of online orders.
Without an effective online presence, establishments miss out on valuable restaurant revenue streams that could be generated through online sales, ultimately limiting growth and profitability.
According to PYMNTS research, 62% of consumers use Google to discover restaurants, making it the most popular platform for restaurant searches. This underscores the importance of restaurants optimizing their online presence to enhance visibility and attract potential customers.
Solution: Boost online orders with marketing and loyalty programs
To increase restaurant revenue, drive more online orders.
Setting up a restaurant loyalty program and targeted promotions, such as offering discounts for first-time orders or rewards for repeat customers, can significantly boost engagement and sales.
Additionally, using data-driven marketing strategies like email campaigns and social media promotions helps raise awareness of your online ordering system, making it easier for customers to order directly through your website and fostering long-term customer loyalty.
- Ensure a user-friendly, mobile-responsive website: Make it easy for customers to navigate and place orders directly from your site.
- Offer a seamless online ordering system: Allow customers to order directly through your website, reducing reliance on third-party platforms.
- Update your website regularly: Keep content fresh by adding new menu items, restaurant promotions, and events to engage customers.
- Encourage customer reviews: Positive feedback helps improve your reputation and attract more customers.
- Focus on local SEO: Use relevant keywords for your location and services, and claim your Google Business Profile for restaurants to improve local search visibility.
- Leverage social media platforms: Interact with customers, share menu items, and promote special deals to keep your audience engaged.
- Ensure consistent restaurant branding: Maintain uniformity across all online channels, including your website, social media, and third-party listings, to build recognition and trust.
7. Negative Reviews
Negative reviews can significantly impact a restaurant’s reputation and bottom line.
Potential customers often turn to online reviews before making dining decisions, and a series of negative reviews can deter them from choosing your restaurant.
Without proactive reputation management, unaddressed negative restaurant feedback can accumulate over time, further tarnishing your public image and leading to decreased sales. This can ultimately affect the restaurant’s revenue and growth.
- According to Supy, over 90% of restaurant customers read online reviews on platforms like Google, Yelp, Facebook, TripAdvisor, and OpenTable before deciding where to dine. This underscores the significant impact that customer feedback has on shaping perceptions.
- 94% of diners check online reviews before picking a restaurant, with 80% trusting these reviews as much as personal recommendations.
Solution: Enhance reputation by monitoring reviews and answering all feedback
To manage negative reviews effectively and improve your restaurant’s reputation, it’s essential to monitor online reviews regularly.
Responding to both good and bad restaurant reviews shows customers that you care about their feedback and are committed to improving.
Offering discounts or incentives to satisfied customers can encourage them to leave positive reviews, further enhancing your restaurant’s image.
Additionally, consistently providing excellent customer service ensures that more customers have positive experiences, which can naturally lead to higher ratings.
Learn more about how to get customer feedback in a restaurant.
8. Non-Optimized Menu
A non-optimized menu can create significant challenges for both customers and restaurant operations.
An overly extensive menu may overwhelm customers, making it harder for them to make decisions, while complicating kitchen operations with too many ingredients and complex orders. This can lead to increased costs, longer wait times, and reduced profitability.
On the other hand, a menu that is too limited might not appeal to a wide enough audience, missing out on potential revenue opportunities.
Solution: Optimize your menu using menu engineering
Consider menu engineering to optimize your menu and improve both customer experience and profitability.
Start by choosing a specific type of cuisine to focus on, as this helps streamline operations and attract customers seeking a specialized experience. Analyze the performance of your menu items regularly and make adjustments based on their popularity and profitability.
Your restaurant menu should be easy to read and reflect the character of your restaurant. For example, a pizza restaurant might use a menu that incorporates bold colors and simple, clear sections for easy navigation, while a coffee shop could opt for a clean, minimalist design with straightforward typography and a focus on specialty drinks.
A fast-food restaurant could use a straightforward, easy-to-scan menu with large images to highlight meal combos.
For your online menu, ensure it is easy to read, mobile-optimized, and simple to navigate for online ordering. Avoid using the PDF format, as it can be cumbersome for customers to view and order from on mobile devices.
Both your online and paper menus need to be regularly updated to reflect accurate menu pricing and available items. It’s essential that customers are not surprised by higher prices when paying the bill, as this can seem unprofessional and discourage repeat business.
You can also add attractive photos of dishes and creative descriptions, but remember that the key is to keep it easy to read and simple to use.
9. Lack of Technology Integration
Implementing new technologies can be expensive, especially for smaller or independent restaurants with limited budgets.
For many restaurant owners, the upfront costs for hardware, software, and training can present significant financial challenges.
Additionally, integrating new technologies with existing systems can be complex, especially if the restaurant already uses multiple software applications.
Ensuring seamless integration may require specialized expertise, and the risk of system incompatibility can lead to operational disruptions, reducing the effectiveness of the restaurant technology investment.
- Our data indicates that restaurants utilizing online reservation systems experience a significant reduction in phone reservations, with online reservations accounting for 64% compared to 36% for phone reservations.
- Our customers have reported a 17% increase in repeat orders after implementing an online ordering system combined with a loyalty program.
Solution: Implement an all-in-one solution dedicated to restaurants
Implementing an online ordering system with features such as advanced marketing tools, a customer loyalty program, a restaurant website builder, analytics, reports, and a delivery dispatcher can significantly simplify restaurant operations. These integrated features reduce the complexity of managing a restaurant and improve overall efficiency.
For restaurant owners who may not be familiar with the technology, we offer a free setup service to assist with the setup process, ensuring a smooth integration and quick adoption of the system.
Here you can read more about restaurant management software and how it can streamline your operations, enhance customer engagement, and drive revenue growth.
10. Poor Financial Management
Financial management can be a significant problem for restaurants due to a number of reasons.
With rising food costs, low restaurant sales, and restaurant marketing challenges, restaurants can have difficulty earning significant revenue. Plus, managing and controlling expenses can be complex with numerous operating costs, including food and beverage purchases, labor, rent, utilities, and maintenance.
Labor expenses are also a significant portion of a restaurant’s budget. Rising minimum wages, employee turnover, and restaurant employee scheduling can impact labor costs and financial planning. Restaurants may also rely on loans to fund their operations or expansion. Managing debt payments and interest rates can be a burden on financial stability.
Solution: Improve financial management with budgeting and accounting tools
Restaurant owners should implement effective budgeting and accounting practices to overcome poor financial management.
Start by creating a detailed restaurant budget that includes all fixed and variable costs, helping you understand where your money is going.
Using restaurant accounting software can streamline financial tracking, automate reports, and provide valuable insights into your restaurant’s financial health.
Additionally, consulting with an accountant can provide expert guidance on tax planning and cost-saving strategies.
Regularly analyzing your restaurant’s financial performance will help identify areas for improvement and ensure long-term profitability.
Prevention is Better Than Cure
Preventing restaurant problems is always more effective than trying to solve them after they arise. Taking preventive measures not only saves time and resources but also ensures smoother operations and a more positive dining experience for customers.
Statistics speak for themselves, as I mentioned in the introduction, approximately 17% of restaurants close within their first year, and nearly 80% close their doors before reaching their fifth anniversary. This high failure rate is directly connected to common restaurant concerns, many of which could be avoided with proactive planning.
Preventing issues rather than reacting to them creates a foundation for a more resilient business.
