Uncovered: Top 5 Challenges In Running a Restaurant in India

Major challenges in running a restaurant business in India.

Most of us have, at some point in our lives, thought of opening a restaurant. Especially during a long delay in service, or when the food served has been too salty, or worse, undercooked or overpriced, we have disdainfully shaken our heads and said, “If I were running this restaurant…”. But of course, it’s easier said than done. Running a restaurant is indeed a tough job, and there are many challenges in running a restaurant in India. Most restaurants fail within the first year of operations. 

Unless you’re willing to blindly accept whatever number your restaurant manager gives you about daily profits, you will face tough challenges to sail through. It is virtually impossible to keep track of the business that goes on in your restaurant if you choose to take it the easy way.

common challenges in running a restaurant business in India

Even if you decide to sit behind the cash counter yourself, there are still hurdles that plague restaurant management. No one would tell you the stricter side of restaurant management when you decide to take the plunge. Here we have compiled for you the challenges you may face while running a restaurant and the things you can do to avoid them.

Top Challenges in Running a Restaurant Business in India 

Restaurateurs are our favorite people in the world. And it pains us to see them struggling with what we consider one of the noblest professions on earth, that is, feeding the hungry (albeit charging for it!). So, we’ve compiled a list of the top five challenges in running a restaurant that all restaurant owners and managers should keep in mind:

1. Staff Training and Recruitment

A restaurant is primarily known for its food and services. You need to have an expert chef whose cooking would lure customers to the restaurant. And you need a well-trained staff whose efficiency and hospitality charms the customers even more.

A restaurant faces more competition than any other business. This is because (as mentioned previously) everyone thinks they can run a restaurant and don’t hesitate to realize their dream. Restaurants emerge and go out of business regularly. Therefore, the attrition rate of the staff is quite high. Added to this are the long and tough hours and meager pay. Junior level staff have been known to switch jobs for as low as Rs 500.

Acquiring and retaining good staff is a top concern and one of the biggest challenges in running a restaurant. Developing a good work culture and giving employees benefits helps a lot in retaining them. Read these tips on how to keep your restaurant staff happy and motivated here.

Our Tip:

Train Your Staff Well and overcome the challenges in running a restaurant business in India

2. Designing the Right Menu

A mouthwatering menu with delicacies is a sure way to attract customers. However, delivering the delicacies is a feat that many restaurants fail to master. The simple menu seems like just a piece of paper with all your food items listed on it, but it is so much more than that.

The customer looking at a menu decides what he wants in 107 seconds before defaulting to the easiest option. The colors, the order in which dishes are listed, and even the font of the price matters. Often restaurateurs fail to price the menu the right way or make mistakes in the placement of the items. Also, if the menu is too long and complicated, the customer might get confused.

It also becomes difficult for the chef to prepare a wide variety of dishes in a limited time. A complicated menu requires varied raw materials that might turn bad if not consumed timely. Find out how to create an attractive and efficient restaurant menu design here.

Our Tip:

smart menu management is a major challenge in running a restaurant business

3. Internal Thefts

From inventory thefts to on-counter thefts, thefts at restaurants take many forms and is quite challenging. According to statistics, Internal thefts contribute to a loss of $400 billion within the first year of running a restaurant business. No matter how many strict rules you implement and how many CCTV cameras you install, pilferage is something that seems virtually impossible to avoid.

Unless you’re willing to sit behind the counter yourself and monitor all activities, it is challenging to prevent counter thefts. Keep a precise check on all your restaurant operations by viewing the daily reports. Assign roles and permissions through the POS software.

Our Tip:

Use this tip for Theft Control which will help you to counter the challenges in running a restaurant in India.
Theft Control Check

4. Performance Consistency in Restaurant

Most restaurants find it difficult to maintain consistency in their service. When the restaurant opens, the food is excellent, and so is the service. With time and difficulties (read dwindling funds), the standard goes down, eventually driving the customers away.

This mainly happens because of the lack of standardization in the restaurant in terms of operations. Everything, right from your restaurant’s Vendor Management to the Recipe Management, should be standardized to maintain consistency. Find out how maintaining consistency increases customer loyalty and improves sales.

Our Tip:

Use this Performance Management Tip and overcome the problems in operating a restaurant business in India

5. Replicating the Success

This is perhaps the most common challenge in running a restaurant and especially while expanding. The first outlet may become a huge success, but more than often, even the management doesn’t know how it happened. It seems like a combination of hard work and luck that leads a restaurant to flourish. Most restaurants don’t know how to replicate their success while branching out.

Our Tip:

Social Distancing- A Bigger Challenge In The Contemporary Restaurant Scenario

Throughout the industry, delivery executives are practising social distancing and following hygiene habits such as covering mouths with N95 masks and gloves, frequently washing hands, sanitizing the vehicles, etc. Customers are also being encouraged to transact through digital payments, thus eliminating the physical transfer of cash.

The global health agency, WHO has also emphasized the importance of maintaining social distancing in the restaurants. Make sure that your staff takes all the precautionary measures in maintaining personal hygiene and disinfects the kitchen area to prevent contamination.

So, keep in mind these top challenges in running a restaurant business in India the next time you feel the urge to open a restaurant and do your best to tackle these hurdles skillfully.

Happy restaurateuring!

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Nikunj is the Communications Lead at Restroworks, a global leader in cloud-based technology platforms. In his role, he oversees global marketing and branding initiatives for Restroworks across APAC, the Middle East, and the US.


  1. All of these tips are amazing! I really like the idea of planning the menu with a good number of the same ingrediants. That will helps with costs in the beginning for sure. Thanks for sharing!

    • Dear Meagan,

      Thanks for reading the article, we're elated that you enjoyed it 🙂

      Do check out our other articles as well; we have some awesome tips on controlling restaurant costs and food costs.


  2. All the information given was really helpful for my knowledge. I would appreciate if you provide information on p&l and costings.
    Thanking you in anticipation.

  3. There are several major challenges of running a restaurant in India I am glad you have mentioned them. It surely gives a headstart to all the budding restaurateurs.

  4. First impressions are important. Poor customer service is often a deal breaker for customers. Your food may be outstanding, your table settings exquisite and your ambiance delightful, but if your service is bad, customers will remember. Great Read.

  5. There are a lot of challenges that the restaurant industry faces. The operations will not always flow smoothly, but once the owners learn to deal with it, running a restaurant might get easier. The points mentioned above are moreover very helpful. Great Work.

  6. Hiring the right staff is the biggest challenges of running a restaurant. There is a lack of skilled staff, and the turnover rate is also very high.


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