Nonprofit Blog

The future of the restaurant industry will be driven by consumers’ appetite for delivery, experience and speed. 

Restaurants sales continued to lag in 2016 as uncertainty around the U.S. economic and regulatory environments persisted. Overall, restaurant same-store sales were flat last year. This broader stagnation comes as restaurants report lower traffic counts, in part as a result of market saturation, increased menu prices and declining grocery costs. Restaurants also face challenges associated with evolving consumer preferences and market composition, as smaller chains, independents and chef‑driven concepts expand rapidly.

Time may be running out for restaurant owners to take discounts on transfers to family members. On Aug. 2, 2016, the Department of the Treasury issued proposed regulations under IRC Section 2704 in response to perceived abuses in the use of valuation discounts. Currently, owners transferring non-controlling interests in privately held companies are able to consider discounts for lack of control and discounts for lack of marketability. Discounts for lack of control relate to the inability of non-controlling interest holders to impact the strategic direction of the entity. Discounts for lack of marketability account for the lack of a ready market to sell privately held interests.

The National Restaurant Association’s (NRA) 2016 Restaurant Industry Forecast predicts that restaurant industry sales will reach $783 billion this year. Although this number represents the seventh consecutive year of real growth in restaurant sales, the rate of growth remains only moderate for the nation’s second-largest private sector employer.