The Pros and Cons of Starting a Family-Owned Restaurant

By Enas El Masry
Family-owned restaurants have pros and cons.

No one chooses the family they’re born into, but anyone can choose their business partners. The question is would you choose your family as your business partner?

Restaurants are very demanding businesses to run. 60% of restaurants shut their doors within the first year of business, and almost four out of five restaurants are out of business within five years.

In order to survive the launch and initial bottleneck, restaurants must take into account myriad considerations, especially their choice of whom to entrust with the business partnership.

Oftentimes, when one thinks of family, we think of love and trust, a safety net to fall back on. Nonetheless, family dynamics can also be complicated and overwhelming. At face value, a family-owned restaurant may seem like a daunting and even unwise decision to make. However, knowing what can go wrong means you can anticipate and avoid any unwanted turbulence or drama.

Your grandmother’s legendary recipe may be heavenly, but alone, it can’t ensure your family restaurant’s success. These considerations can, though.

The Perks of Working in a Family-Run Restaurant

1. Sharing the same incentive for success 

One of the best things about growing up in a healthy family is that they always have your back in times of need. And, if you decide to hire a family member to work in your restaurant, even if they aren’t a business partner, their incentives will align with yours. When push comes to shove, they will put in the extra effort to keep the ship afloat. 

2. Bonding over shared adversity

Every business or job has its challenges, and surviving a rough patch with a supportive team is a guaranteed way to build stronger bonds that carry you through any other challenges. When your coworkers are family, the bonds you strengthen at work extend to touch every other part of your shared lives. 

3. Enjoying unmatched levels of trust

Any successful relationship buds from a space of mutual trust, and a business relationship is no exception to this rule. Before embarking on a business journey, it is crucial to know all there is to know about your partner(s).

However, when you’ve already shared the majority of your life with family or an old friend, there’s very little about them that may be left unknown. And, with this knowledge comes boundless trust and faith.

The Down-Side of Working in a Family-Run Restaurant

1. Blurred boundaries

Achieving a work-life balance is a very healthy yet difficult feat. But, to do so, one must be able to draw a clear line between both and know where each of them begins and ends. With a family-run restaurant, though, your family members are working beside you at the workplace, and your coworkers are waiting for you at home.

This means family drama is likely to seep into the workplace, and work stress will accompany you home. Besides the emotional confusion this can cause, it can be overwhelming, to say the least. 

2. Extra sensitivity regarding hiring and firing staff

Staffing is integral to running any business. Through rigorous recruitment, managers can select the most suitable candidates for the job. On the flip side, those same managers are forced to let go of any members who fail to rise to the occasion.

Now, having to terminate an employee’s contract is never pleasant. But, when this employee is a cousin whom you will undoubtedly keep meeting at family gatherings, this seemingly simple decision suddenly becomes packed with sensitivity and awkwardness. 

3. Jeopardized family relations 

The choice of whom to hire or fire isn’t the only danger zone within the confusing dynamics of the family-run restaurant. Rivalries often arise, especially between siblings, over authority; after all, someone has to figure out who gets the final say or who advances up the hierarchy.

If left unresolved, this kind of tension may extend beyond the boundaries of the restaurant and cause a deep rift between family members.

If you feel taken aback by all that could go wrong with your family-run business, that’s good because it means you’ll pay attention to the following precautions. As simple and obvious as they may seem, these common-sense considerations will help your family-run restaurant succeed well past the initial phase.

A Foolproof Recipe for a Successful Family-Run Restaurant

1. Hire only family members who are qualified

A business is not the right place for compliments and favors. 

2. Set a clear business plan

The more detailed and thoroughly designed the plan, the less space for conflict of interest.

3. Specify the duties, responsibilities, and boundaries of each role

As with other forms of blurred boundaries, family coworkers may take the liberty to give unsolicited opinions on how others’ work should be done. Clearly defined roles and responsibilities may spare your restaurant such interferences and their consequent tension. 

4. Be inclusive, listen to suggestions, and allow your ideas to be challenged

Always being on the same page certainly makes the business run smoothly. But it also means that the great ideas on the table will never be honed into something even better. Multi-generational family staff is a great place for conversations where each perspective has different values to add. 

5. Designate a sole decision-maker for resolving disputes

It’s not a problem for differences to arise. But it is a problem for them to go unresolved. In any business, especially a family-owned restaurant, it is essential that one person is authorized to pass the final judgment should team conversations fail to settle on an agreement on any given issue. 

6. Keep everything legally documented

You should keep thorough legal records, no matter how much you trust your family. Business should always be business.

7. Always be fair and avoid nepotism

Even when family members make up the bigger part of the staff, there will always be non-family staff members. Make sure everyone is treated equally and fairly without favoritism for relatives.


Running a family restaurant can be fraught with its own set of challenges. Still, with a little bit of organization and foresight, you can help your business avoid common pitfalls and thrive for years to come. By following our foolproof recipe, you'll be able to navigate the tricky waters of working with loved ones and create a family-run restaurant that will surely be a roaring success.