Do’s and Don’ts for Restaurants Filing Chapter 11

Restaurants fail for a variety of reasons, and it’s commonly said that most do so within the first five years. But they’re not a unique category, as a study of Bureau of Labor Statistics information showed that nearly 20 percent of service-oriented businesses close within the first year. Small restaurants with fewer than 20 employees are most likely to cease operation prematurely.The host of the recovery show Restaurant Impossible says that inexperience, poor personnel management, and lack of understanding of restaurant accounting practices are what kills  most food establishments. Experienced managers and owners say that the cost of the location (building lease) must be closely tied to the average diner’s check amount, so a burger joint, no matter how trendy, simply cannot survive in an expensive, high-end rent district without bleeding money.

The good news is that if you’re a restaurant owner in financial straits you have plenty of company – and that Chapter 11…