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What is the real restaurant failure rate? How many restaurants fail in their first year?
The restaurant failure rate has been a widely quoted — and widely inaccurate — figure that has persisted for years.
Do 90% of restaurants fail? What about 50%? These figures from a number of outlets can range from a low of 17% to that dismal reported figure that only 1 in 10 restaurants survive.
Datassential tracks both current and historical restaurant closures and openings across the U.S. using a team of experts who come through online review sites and verify closures — both temporary and permanent. And looking at the restaurant failure rate from 2018 to 2025, Datassential is able to see a far more positive trend in restaurant failures than widely reported figures.
The First-Year Restaurant Failure Rate: The Real Numbers
According to Datassential, the first-year failure rate has dropped to just 0.9% in 2025 — the lowest since at least 2018.
Even before the pandemic, first-year failure rates were far lower than commonly believed, hovering under 6%. While COVID-19 temporarily doubled these rates in 2021-2022, the industry has bounced back stronger than ever.
The rate of restaurants that fail in their first year has long been far lower than widely believed. In the years before COVID, the rate was under 6%. During COVID, the first—year restaurant failure rate doubled, but has significantly moderated since, according to Datassential’s U.S & Canada Operators database, part of the company’s comprehensive Datassential One platform.
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How the U.S. restaurant failure rate has changed over time
| Year | First-Year Restaurant Failure Rate | Year | First-Year Restaurant Failure Rate | |
| 2018 | 4.7% | 2022 | 10% | |
| 2019 | 5.6% | 2023 | 9.3% | |
| 2020 | 5.1% | 2024 | 4.7% | |
| 2021 | 12.3% | 2025 | 0.9% |
What Restaurant Types Succeed Most?
First-Year Restaurant Failure Rate by Segment
Fine dining restaurants have the highest failure rate of any segment this year at 4.9%. Other restaurant segments’ failure rates are significantly lower. Quick-service (QSR) and Casual Dining restaurants both have a failure rate of just over 1%, while midscale and fast casual restaurants have the lowest first-year failure rates at 0.6% and 0.5%, respectively.
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By Cuisine Type
Want to know which restaurants are the most successful in their first year? Think of one of the most popular, portable and well-loved meals, and consumers’ growing love of global flavors outside of the more common three of Mexican, Italian and Chinese.
- Pizza. Only two out of more than 1,000 pizza restaurants closed in their first 12 months of operation in 2025.
2. Japanese — Second-lowest failure rate goes to the well-loved global flavor, with classic dishes ranging from sushi and ramen to teriyaki and udon.
On the other end of the list, here are the cuisines with the highest relative closure rates this year:
- Steakhouses
- African
- Italian
The restaurants across these three segments have the highest first year failure rates of any cuisines, but these restaurants also account for the fewest openings so far this year.
Explore detailed Menu Trends data for cuisine-specific insights.
How Many Restaurants Survive 5 Years?
While the failure rate of newly opened restaurants typically gets the most attention, it’s important to look at the failure rates of restaurants with some longevity, as well.
When examining the restaurant failure rate of operators open for five years, much the same pattern emerges.
The rate of restaurant failures at five years of operation has steadily fallen since 2018, when the U.S. restaurant failure rate was 31.1%. The restaurant failure rate hovered above 30% until 2022, when it dropped to 24.9%, and the rate has steadily declined since.
restaurant failure rates for restaurants at 5 years of operation
| Year | First-Year Restaurant Failure Rate | Year | First-Year Restaurant Failure Rate | |
| 2018 | 31.3% | 2022 | 24.9% | |
| 2019 | 32.8% | 2023 | 14.8% | |
| 2020 | 30.2% | 2024 | 5.1% | |
| 2021 | 31.9% | 2025 | 0.9% |
Restaurant Failure Rate Methodology
Datassential’s restaurant data collection process provides comprehensive insight into the operational status of restaurants across the United States market. The operating status of each of the 700,000 restaurants nationwide is in constant flux, as operators must weigh factors such as local regulations, capacity restrictions, staffing considerations, and customer demand patterns to determine their operational status.
Our collection process captures the reported operating status of approximately 85% of the US restaurant market through a systematic approach utilizing multiple data sources including search engines, industry publications, social media platforms, delivery sites, and restaurant websites. These operational statuses are based on information reported either by restaurant owners or customers, covering various statuses including temporarily closed, permanently closed, and different service modes such as takeout, delivery, curbside pickup, drive—through, and dine—in service.
Each collection period captures the operating status of between 500,000 and 650,000 restaurants, representing 70% to 90% of the entire US restaurant market. Our methodology differs significantly from other industry reports that typically rely on analyst opinions or small sample surveys of 1,000 to 10,000 operators. This substantial sample size provides a more comprehensive foundation for understanding restaurant operational trends and closure patterns across the industry.
