Invariably many people eat meals away from their home, some for special occasions, some because it convenient, some because it is easy and a host of other reasons. While eating out and enjoying the meal is a great thing to do, the investing part of the restaurant may not be. Since we all eat and many learn to cook at home, often times people believe they can run a restaurant, which could be partially true. The daily operations of running a restaurant, plus the need for a loyal following or many guests to come into your restaurant are factors which cause a high turnover of restaurants. One theory is the hardest part of a restaurant is defining what the restaurant is and essentially it has to stay that way. For example if a restaurant starts with the best spinach based meals in town, and the chef wants to try something else, it is likely customers will vote with their feet and try something else for in the restaurant trade there is lots of choice. If they go will they come back?  If the restaurant is no longer hot, then what?

Linking to dividend paying stocks, while there are some dividend paying companies in the restaurant trade, the restaurant trade remains a very tough business to make consistent money. Unless you have a particular attachment, you may wish to look at seemingly easier industry subgroups. Most companies change a little over time, as they add new services to meet the demands of its customers. Some add these new services well and others never quite make the changes work, because their customers really do not want or see the need of the services.

There are more questions than answers, till the next time – to raising questions