Business mistakes that restaurants make

Going back to basics with your restaurant business can free up energy and cash for bigger-picture strategies. Today, we have an exclusive interview with a small business consultant that includes tips on making the best choices possible for your restaurant. Plus: Endless lasagna? Here's where you can cash in. Pull up a chair for The Prep.

On the menu:

💠 Uber comes for DoorDash's exclusive threats
💠 Are Michelin ratings even relevant anymore?
💠 The shift in DEI in the restaurant industry
💠 How McDonald's is tapping customer loyalty

'Understand the problems' restaurant customers face

As a former restaurant owner, Sheila Dalton knows firsthand how challenging it is to run a successful establishment. Now a business consultant with the Small Business and Technology Development Center at the University of North Carolina Wilmington. In her role, Dalton helps small businesses access sources of capital and financing, evaluate and improve financial performance, explore new market opportunities and improve employee performance. We asked her to share some insights for restaurant owners on how they can tighten up business processes.  -Margot Lester

What's the most common business mistake you see restaurant owners make, and how can they avoid it?

The most common mistake is not taking time to understand financial statements. It took me about four years into owning my restaurant before I fully grasped the numbers. To avoid this, work with a trusted advisor like your bookkeeper, a SCORE mentor or a general business counselor at the SBTDC. They can help you break down your income and expenses so you can adjust operations proactively.

What's one thing you wish restaurant owners understood better and why? 

Know your target customer. Understand the problems and obstacles they face that you could solve. Doing this will inform your marketing plan, help you spend your resources wisely and guide you in refining your offerings to resonate with customers, ultimately boosting sales.

What's one restaurant trend you'd like to see continue and one you'd like to see end?

I'd like to see loyalty programs continue because they create long-term customer value and show appreciation for repeat business. On the other hand, I think gamified promotions are gimmicky and unsustainable—often focusing more on short-term excitement than genuine customer engagement.

What's your favorite comfort food? 

Chicken and rice with broth. It’s light yet soothing. White rice is key here. Add a pat of butter to up the umami!

What we're following: Uber has accused DoorDash of anti-competitive practices, saying that the delivery service has threatened restaurants with higher service fees if they also use Uber Eats. 

Who we're following: Chef and MasterChef judge Aarón Sánchez on TikTok for his recipes, travel videos and advice for up-and-coming chefs and restaurateurs. 

What we're listening to: Food and beverage consultant Scot Turner of Auden Hospitality on the Restaurant Influencers podcast, explaining how attention to detail elevates dining experiences.

News you can use: Three trending menu items via Technomic Ignite Menu data.

Plus: Is your restaurant on Yelp's 2025 list of the top 100 places to eat?

Patrons and chefs shun Michelin ratings

Many diners and chefs are turning away from the Michelin Guide due to its questionable star ratings, with some top-rated restaurants failing to meet expectations. Experienced food lovers are increasingly relying less on the star ratings of the Michelin Guide, and looking instead to word-of-mouth recommendations from trusted friends, chefs and maitre d's. Chefs are also pushing back, with some like renowned chef Marc Veyrat banning Michelin inspectors from his newest fine-dining establishment, Le Restaurant Marc Veyrat in the ski resort of Megève in France’s Haute-Savoie region. Some industry insiders believe the guide has lost its influence, particularly among true connoisseurs who debate food quality on their own terms. As Michelin struggles with credibility, alternative dining guides such as the James Beard Awards, Zagat and regional dining reviews are rising in prominence, prioritizing authentic experiences over prestigious but inconsistent ratings.

Why it matters: The shift away from Michelin’s influence highlights a broader change in the fine-dining world, where personal experience and industry trust outweigh traditional star ratings. This trend could reshape the restaurant industry, making insider recommendations more valuable than ever. (Robb Report)

Restaurants navigate bumpy DEI changes

President Trump’s executive orders targeting diversity, equity and inclusion initiatives have accelerated a corporate shift away from DEI programs, though this trend began before his second term. Major restaurant industry corporations, including McDonald's, Starbucks and Bloomin' Brands, had already scaled back or rebranded their DEI efforts, often citing legal concerns following the Supreme Court's affirmative action ruling in 2023. Legal experts warn that businesses adjusting DEI policies face risks from both anti-discrimination lawsuits and reverse discrimination claims, complicating employment practices. Meanwhile, backlash against the rollback of DEI policies has emerged, with organizations filing lawsuits against the administration, arguing that the executive orders violate free speech and civil rights protections. 

Why it matters: The ongoing shift in DEI policies reflects a broader cultural and political battle over workplace diversity and inclusion, with restaurants caught between legal pressures and employee and consumer expectations. The restaurant industry, heavily reliant on a diverse workforce, may face additional challenges in balancing compliance with inclusivity. (Nation's Restaurant News)

How community outreach boosts restaurant clout

A 2023 National Restaurant Association survey found that 84% of restaurant operators have contributed to charitable causes since 2020, and more than 70% of consumers prefer dining at establishments that support local charities. Carey Bringle, owner of Peg Leg Porker Restaurant, Bringle’s Smoking Oasis, Pig Star and Peg Leg Porker Bourbon & Lifestyle Brand, writes that philanthropy not only benefits the community but also enhances a restaurant’s brand image, increasing customer loyalty and visibility. Authenticity is key, Bringle writes, as consumers are perceptive and expect businesses to demonstrate real commitment to their chosen causes. 

Why it matters: Philanthropy-driven marketing is more than just good PR—it’s a strategy that aligns business success with community impact. As consumers become more socially conscious, restaurants that engage in meaningful charitable work can foster stronger brand loyalty and customer trust. This approach also helps businesses stand out in an increasingly competitive industry, where emotional connections with customers are just as valuable as the quality of the food. (Forbes)

23.6%

The amount that U.S. food prices rose between 2020 to 2024

(USDA.org)

💠 McDonald's aims to regain loyalty through its app

💠 Youngest chef ever on Diners, Drive-Ins & Dives opens N.J. spot

💠 Restaurant Brands announces Burger King China takeover

"[These providers] offer convenient, affordable and scalable solutions that empower restaurants to cut waste without sacrificing profitability or quality."

-Angel Veza, ReFED, speaking at the company's annual summit in the "Plate to Planet: Solutions for Restaurant Food Waste" session.

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