The margins of a single restaurant are too thin to justify the operational complexity and stress. Profitability and a sustainable business model emerge only when you scale to multiple locations, allowing you to amortize fixed costs and achieve operational efficiencies.

Unlike tech, where exits are common and founders share their journeys, the restaurant world has few acquisitions. Successful operators rarely disclose their numbers or strategies, creating a "super opaque" environment for newcomers trying to learn the business of hospitality.

Entrepreneurs often assume the product generating the most revenue is the most valuable. However, when factoring in the time and energy required for delivery (return on time), that "bestseller" might actually be the least profitable per hour, making it a poor candidate for scaling.

Founders often struggle most when a startup has some revenue but isn't scaling predictably. This ambiguity makes the decision to pivot from a partially working model much harder and more painful than starting from a blank slate.

Investors in restaurants typically receive 70-80% of profits until their initial investment is returned. Afterward, this flips, and they retain a smaller percentage (e.g., 20%) in perpetuity. This structure prioritizes cash flow distribution over a distant, uncertain exit.

When Fal was debating its pivot, their investor Todd Jackson asked which idea would get to $1M ARR faster versus $10M ARR faster. This framework forced them to evaluate not just immediate traction but long-term market size and velocity. It provided the clarity needed to abandon a working product for one with a much higher ceiling.

Starting with drop shipping proved the concept but offered unsustainable margins. The pivot to in-house apparel manufacturing unlocked significantly higher profits (from a £2 margin to £15). This allowed them to reinvest capital back into the business, fueling actual growth.

Many founders fail not from a lack of market opportunity, but from trying to serve too many customer types with too many offerings. This creates overwhelming complexity in marketing, sales, and product. Picking a narrow niche simplifies operations and creates a clearer path to traction and profitability.

Many founders believe growing top-line revenue will solve their bottom-line profit issues. However, if the underlying business model is unprofitable, scaling revenue simply scales the losses. The focus should be on fixing profitability at the current size before pursuing growth.