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Food Service Industry Updates Franchising Industry Updates

More Than 10% of U.S. Food Establishments Have Closed Since the Start of the Pandemic

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The coronavirus pandemic has upended many lives and businesses in its wake, including those in the restaurant industry. This week, Datassential reported that 10.2% of U.S. food establishments have permanently closed their doors since its start, citing data from the company’s Firefly database.

This consisted of 79,438 out of 778,807 food establishments that were open since the onset of the virus, including restaurants that opened during the pandemic. Datassential adds that this includes restaurants at all levels of service, including quick-service, fast-casual, midscale, casual, fine dining and food trucks.

“The good news is that the rate of closures is slowing, and the future is bright for those restaurants who have learned to adapt to the host of new challenges facing them in our new normal.”

— Jack Li, CEO

In fact, food trucks were the most affected of any segment, with 22.5% of them ceasing operations. On the opposite end of the scale sat quick-service restaurants (QSRs), which comprise the largest segment of the foodservice industry. QSRs have seen the least amount of closures during the pandemic, at only 9.8%.

Datassential also reports that the pandemic has taken its toll on chain restaurants. With the exception of those chains that have more than 501 units, chains have closed permanently at a higher rate than independent eateries. The company adds that the largest permanent closure rate was among those that had between 51 and 100 units at 16.2%.

Throughout the country, Delaware had the lowest permanent closure rate at 8.2%, and the District of Columbia had a higher rate of closures than any state at 14.9%.

“This last year has been one [of] the toughest the restaurant industry has ever faced,” Datassential CEO Jack Li said. “But the good news is that the rate of closures is slowing, and the future is bright for those restaurants who have learned to adapt to the host of new challenges facing them in our new normal.”

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