Originally Posted by landarc
This can happen if a place does not have the reputation to make getting the food desirable. If you can gain the reputation of being something worth having, and sacrificing at any cost to get, then you can stay in business. But, if you are selling out before dinner consistently, then people will stop coming. Eventually, you no longer sell out, but, you can't draw people back to your restaurant.
This is actually far more common in the restaurant business than you might think. People who do not have the capital, or experience, have a great product, but, cannot deliver is consistently. The market will work away from you. Now, you could talk Franklin's, or any number of older establishments, but, the older places had great reputations. Franklin's, quite honestly, went viral. He managed both his pits and his press in such a way, that people came to desire his product beyond what reason would dictate.
I would add, that some restaurants simply cannot scale up, either because the owner's do not want to allocate responsibility, or their building does not allow for growth. These are real issues, especially if you create a situation where the food is hard to get.