Last week we saw Gordon Ramsay shut down his project to save ailing restaurants in the manner of a matador taming a bull. I am of course referring to the end of "Kitchen Nightmares". The but how successful was it ?
Grubstreet.com published an about how only 40% of the businesses featured on Kitchen nightmares remain open.
But I wasn't completely satisfied. Sure, Amy's Baking Company is alive at the moment, but how confident are you that they'll still be open in three years ?
Which is why I chose to use survival analysis, the kind of analysis used to determine how long cancer patients survive after certain treatments. In this case, the Restaurants are the patients, and Gordon Ramsay is the treatment.
A survival graph starts off assuming the restaurants are still alive and kicking. Until, at some point, they close down, which causes the line to plunge. If that line reaches the bottom, all of the restaurants have closed down. Where that line stops is the percentage of restaurants that survive.
Season 2 looks pretty brutal, as all the restaurants fail, but then season three has quite a lot more successes, and so we see the successes increase with season. But, remember the restaurants in the later seasons have had less time to fail.
So the big question is, what happens if we pool all of this data together ?
So based on all of the data at hand, we can draw a line at the 50% mark of this survival curve to estimate the time it takes for 50% of businesses to fail. This is our Median Survival rate.
Essentially, it says that it takes 3 years for half of the businesses featured on Kitchen Nightmares to fail, and it seems to hold for most of the seasons of the show.
So how does this compare to actual restaurant failure rates ?
I referred to articles published by Bloomberg and Restaurant Owner, which say that by 3 years 60%-50% (respectively) of restaurants failed. That's in the same ballpark as the achievements of Kitchen Nightmares.
So basically, that's saying that Kitchen Nightmares is useless, right ?
Actually we can't say that. Not really. Most of these businesses had been in operation for some time before Gordon Ramsay is parachuted in to save them, and if the show introductions are to be believe, they were already failing. What Kitchen Nightmares appears to do is give them another chance, reboot an ailing business to give it as much chance as a fresh start-up.
As with any study, there are of course weaknesses in this analysis that need to be addressed. The biggest one is that any analysis is only as good as the data you put in. I've been using air-dates, but actually it would be a lot more accurate to use the actual filming dates. Some of these have been filmed up to a year before broadcast, and that would make the difference of a whole year on the survival of a restaurant.
Another issue is that some of these owners featured on the show sold their restaurants on so that new management could take over and fail the business. I feel like I should classify this as a success for the owners, even though the restaurants ended up closing in the end.
So I could easily be underestimating Gordon Ramsay. I wouldn't want to do that, that guy's scary.