Misaligned incentives
Commercial real estate brokers earn commission on lease signature, not on business survival. Their incentive is to close the deal, not to verify the location is appropriate for the specific business concept.
Information asymmetry
Many of the relevant data sources — Eurostat, national business registries, municipal open data portals, OpenStreetMap edit history — exist as separate, fragmented systems. Aggregating them requires technical capability that most small business founders do not have.
The result is that the most important financial decision in most small business owners' lives is typically made on a combination of broker recommendation, personal intuition, and a single site visit.
What founders can do today
Three steps are within reach for any founder, regardless of technical skill, before signing a commercial lease:
First, check the local business registry for the address. In Poland, CEIDG (ceidg.gov.pl) shows the history of registered businesses by address. In Italy, the Registro Imprese (registroimprese.it) provides similar data. A street with three closed food businesses in five years tells a different story than a street with stable, long-tenured tenants.
Second, visit the location at multiple times. A single Friday evening visit is not representative. A viable food service business needs to function on Tuesday morning, Wednesday afternoon, and Sunday at noon. Three to five visits across different days and time blocks give a far more accurate picture than one visit.
Third, examine demographic alignment. National statistical offices publish district-level data on income, age distribution, and population density. In Poland, this comes from BDL (Bank Danych Lokalnych); in Italy, from ISTAT. A high-end café concept in a neighborhood with median income below the city average is structurally challenging, regardless of how busy the street looks on a weekend.
These are minimum standards. They are achievable by anyone with internet access and three to four hours of research time. They will not guarantee success — no analysis can — but they materially improve the odds compared to intuition alone.
Frequently Asked Questions
What percentage of restaurants fail in Europe?
According to Eurostat Business Demography statistics, approximately 18% of new food service businesses in the EU close within one year, 42% close within three years, and 58% close within five years. Exact figures vary by country and by cohort.
Which European country has the highest restaurant survival rate?
Among major EU economies, Germany consistently shows the highest 5-year survival rate for food service businesses, at approximately 46%. Spain and Italy show lower rates, in the 36–38% range.
How does Eurostat measure restaurant survival?
Eurostat works with national statistical offices to track every newly registered enterprise in a given year and measures how many remain active at 1, 3, and 5 years. The data is published annually with a lag of approximately three years and is available at sector level (NACE classification).
Why do most restaurants fail?
Peer-reviewed research, particularly the Parsa et al. studies published in Cornell Hospitality Quarterly, identifies five primary factors: capital intensity at startup, thin operating margins, operational complexity, location dependency, and competitive intensity. Of these, location is the factor most directly addressable through pre-opening data analysis.
Can data predict whether a restaurant will succeed?
Data can measure factors that correlate with survival, including competitor density, demographic alignment, foot traffic patterns, and neighborhood economic trajectory. It cannot predict factors related to operator quality, product, or execution. Pre-opening data analysis improves the odds of success but does not guarantee outcomes.
Where can I find data on commercial real estate viability in Europe?
Public sources include Eurostat (eurostat.ec.europa.eu) for cross-country statistics, national statistical offices (BDL in Poland, ISTAT in Italy, INSEE in France, Destatis in Germany) for sub-national demographic data, OpenStreetMap for geographic data including business density, and national business registries (CEIDG in Poland, Registro Imprese in Italy) for address-level commercial history.
What does Nesso do?
Nesso aggregates these data sources into a single location score for any commercial address in Warsaw and Turin. The platform delivers a 0-to-100 viability score within 30 seconds, with explainable AI showing exactly which factors drive the score. The service is currently in early access for HoReCa founders in exchange for outcome data 90 days after opening.