[Bleeding Red]

For this thread I am assuming A) an already going concern (not a new business) and B) that all the other costs remain static. I was looking at it as though one aspect of your costs suddenly went up a heavy percentage.

The large corps - Keg, Kelseys, Earls, BP - have worked it all out to last possible decimal point - exact amount of cheese per pizza, how many croutons per salad, etc. They would likely have to recalculate a lot of things if their labour cost suddenly went up 15%. Most restaurants would cut staff first rather than increase prices.

Of course anyone looking to open a restaurant needs to take all the costs into consideration and work out revenue / charging points. I have no idea what the margins are on food items.

I haven't read of anyone arguing that restaurants need tipping to remain open. The main reason cited for restaurant closings is high rent. I'm not sure where the idea of a lower minimum wage for servers came from, but wouldn't be surprised if there was some lobby behind it.

An example outside the restaurant industry could be hairdressers. The House of Lords saw their taxes shoot up over 50% (property was assessed based on "best Usage", which was as a condo, rather than what it was actually used for) and the owner decided that after 30+ years to close the doors. He would have had to increase his prices too much to cover the costs. He probably could have handled the moderate cost rise if he had to end tipping.

For the longest time more restaurants closed than new ones opened and I am sure mismanagement, bad food, and high rent had more to do with closures than labour costs.