Restaurant owners and operators face a challenging outlook in 2025. Familiar pain points such as slim profit margins, labor shortages, and high turnover have only gotten worse in recent years. According to the 2025 Independent Restaurant Industry Report from the James Beard Foundation (JBF), 49% of owners said their top challenge was rising food costs in 2024, and 59% of owners identified rising labor costs as their biggest challenge.
Obviously, there’s not much we can do in the face of these broad economic trends. But we can take steps as restaurant owners and operators to adapt. Some of the biggest success stories in today’s challenging operating environment are from restaurants that have been willing to explore new restaurant business models.
Adapting to a Changing Restaurant Landscape
Rising costs aren’t the only challenge that restaurant owners and operators face today. Restaurants must also adapt to changing customer expectations. Cash-strapped consumers are becoming increasingly selective about how they spend their money. But these same consumers have heightened expectations for quality, customization, and personal engagement.
Many restaurants are responding by:
- Reexamining their menus
- Reimagining the customer experience
- Rethinking the way they manage personnel
In short, owners are adapting to the changing hospitality landscape by exploring new restaurant business models.
New Restaurant Business Models That Are Getting Results
Below, we take a closer look at some of the new restaurant models that are already getting results for restaurant owners in 2025.
Value-Driven Menu Optimization
Many restaurant owners find themselves in a difficult position. Rising food costs have pressed most restaurants to raise menu prices. According to the JBF report, 91% of surveyed restaurants said they had to raise their menu prices in 2024, most within a range of 5 to 10%.
Even as food prices rise, diners have growing expectations for customization, including:
- Order substitutions
- Portion adjustments
- Allergen-free options
This is why new restaurant business models are focused on more creative approaches to offsetting high food costs.
For instance, rather than raising menu prices across the board, some restaurants are finding success by only raising prices for specific offerings. By placing a premium on a selection of high-quality items, restaurants can cater to consumers who are willing to pay more — without losing customers who are looking for a more affordable experience.
Other business model adaptations include:
- “Introductory level” food portions
- More “shareables”
- More optional add-ons such as sides and drink pairings
Each of these adaptations is a thoughtful way of encouraging additional spending without alienating customers with across-the-board price hikes.
Experience-Based Dining
The JBF report reveals another troubling trend. In 2024, 70% of restaurants surveyed reported serving the same number or fewer patrons than the previous year. Fewer Americans chose to dine out last year. As inflation-weary consumers make more cautious decisions about where to spend their money, restaurants are under more pressure than ever to give their guests a reason to visit.
Increasingly, consumers have come to expect a dining experience – something memorable to distinguish the occasion and justify the cost. This expectation is driving innovative restaurant models based around elements such as:
- Thoughtful plating
- Chef tasting menus
- Tableside prep
- Interactive dining experiences
Staff training will play a major part in succeeding with this approach. Empower team members with knowledge about the ingredients, preparation, and menu options. This knowledge gives your front-of-house team the ability to highlight the true value of the dining-out experience to guests.
Story-Driven Branding
Social media presence is more important than ever. According to the JBF report:
- Nearly 75% of restaurants reported that social media was their primary tool for engagement last year
- Social media improvement was the number one most implemented marketing strategy in 2024
- Restaurant owners identified the need to build an effective social media presence as the second most important trend (behind managing rising food costs) in 2025
But it isn’t enough to simply post content and hope for “likes.” The most successful brands are those that use social media platforms to tell their story, convey brand identity in more personal terms, and foster engagement with authentic content.
In addition to creating experience-based dining, be sure to capture and share these moments for your online audience. Highlight what goes on behind the scenes:
- Tell staff stories
- Offer a window into preparation techniques
- Take your social media followers on a trip to the farmer’s market for fresh, locally sourced ingredients
Share photos and videos that convey your restaurant’s values and give yourself a chance to go viral. In 2025, social media engagement is more than just a marketing strategy. The growing emphasis on online presence, engagement, and storytelling represents a continuing expansion of restaurant business models into the online space.
Community-Powered Loyalty
Social media engagement is also an important part of building community. But, says the JBF report, it's just as important to pair online storytelling with real-world experiences. Today, many restaurant owners say it's increasingly difficult to sustain customer loyalty and draw repeat business.
This is why many have shifted to a strategy of community building, which relies on coordinated online and in-person engagement. For many restaurants, this means a business model which is increasingly focused on:
- Participation in community-driven events
- Local partnerships
- Sponsorship opportunities
This new business model calls on restaurants to deepen their connection with their communities – both online and in-person. The result should be not just greater visibility, but a more meaningful and lasting sense of loyalty from your patron community.
Improved Staff Experience
Turnover and labor shortages are persistent pain points for restaurants. But in the last few years, these challenges have intensified. As labor costs rise, many restaurants have also reported that there are simply fewer “career” restaurant workers available in the labor market.
In response to this trend, many owners are revising their restaurant business models with a focus on improved staff retention. Restaurant workers today are demanding fair compensation, benefits, and career advancement opportunities.
Restaurant owners who are already under intense pressure to make ends meet have taken some creative approaches to addressing these demands. Among them, successful restaurants have instituted:
- Incentive-based compensation
- More flexible staffing schedules
- Health and wellness programs
- Cross-training so that all staff members are educated in both front-of-house and back-of-house duties
This last idea has proven particularly effective as a way to support career advancement for employees. And that pays off in curing staffing woes — according to the JBF survey, restaurants that offered career advancement opportunities were 1.2 times more likely to find quality staff to fill open positions in 2024, and 3.5 times more likely to retain talent.
For many restaurants, this has proven an effective strategy for both offsetting rising labor costs and reducing the impact of staffing shortages.
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