The purpose of this research is to explore the reasons for service failure in restaurants. The paper aims to give insights into customers' perceptions and response regarding service failure and recovery and to try to draw a parallel between consumers in a developing economy like India and the same in a developed society, such as USA.
The paper is empirical and involves data from 200 respondents from India and the USA. The sampling unit is individual restaurant customers and the data collection instrument is a structured, non‐disguised questionnaire. The questionnaires have been administered through personal interviews.
The study found conclusive results on the reasons for service failure in the restaurant business in the context of developed and developing economies. It also sheds light on the behavioral aspects of customers' perception towards these failures and their responses to the same. The paper further looked into the recovery strategy employed by restaurants and the customers' perception towards the recovery strategies.
The study has important managerial implications as it facilitates the understanding of where and how the failure‐points occur and how customers perceive and react to them. The paper is also helpful in designing policies and procedures to proactively weed‐out such failure‐points and, in case of their occurrence, design responses to the same.
The paper is valuable as very little has been done in the Indian context. It also creates a comparative perspective as to service failure in the restaurant sector between a developed and a developing country.
