These are the top 7 issues facing the struggling restaurant industry in 2025

Operating a restaurant in Southern California continues to be a difficult endeavor, with many establishments still struggling from pandemic losses. That’s a lot.” Visa and MasterCard dominate the credit card market, controlling around 80% of transactions in the U.S. “With little competition in the industry, these companies set the terms, leaving independent businesses with few options to reduce their processing costs,” according to a statement from the Independent Restaurant Coalition. “The lack of competition stifles innovation and prevents smaller restaurants from negotiating better rates or leveraging alternative payment systems.” Child care Affordable child care continues to be a major challenge for restaurant workers. Service charges and tipping Service charges and junk fees came to the forefront this year after California prohibited “junk fees,” hidden online ticket sale fees and fees tacked onto hotels, restaurants, bars and delivery apps. Mary Sue Milliken, chef and co-founder of Mundo Hospitality Group, whose restaurants include Socalo, Border Grill and Alice B, said she hopes the entire restaurant industry will one day turn to a service-charge model and get away from tipping, which she said can lead to “bad behavior” and an inequitable system where front-of-house workers get paid exponentially better than back-of-house employees.