Your dining room is packed, but your customers are barely spending. Should you blame GLP-1s, a sober Gen Z audience, the economy or all of the above? This week, we’re unpacking the financial pressures reshaping restaurant operations, from POS financing to shrinking checks, plus how climate change is driving up your seafood costs.

But first, why are so many restaurants using AI menus now?

Checkout lane. Major Food Group expands into grocery with Wilder in Miami.

Sliding scale. A pay-what-you-want experiment at an SF restaurant is going great.

Go fish. How climate change is making seafood more expensive.

Take a seat. A new start-up raised $52 million to fill up private dining rooms.

Bot or not? D Magazine accuses Michelin of using AI to write its Dallas restaurant guide.

POS systems increasingly offer restaurants quick access to working capital through merchant cash advances (MCAs), which are different from traditional loans. These advances typically require repayment through a percentage of daily sales, often at a high effective cost. While convenient, they can drain cash flow and make covering everyday expenses difficult.

Why it matters: For restaurant owners operating on razor-thin margins, fast funding can come with significant cash-flow risks. Before accepting an advance, calculate the total repayment amount, understand the factor rate and collection terms and model how daily deductions will affect payroll, rent and food costs. Convenience shouldn't come at the expense of financial stability. (Nation’s Restaurant News)

Restaurateur Janet Zuccarini says her restaurants in both Toronto and Los Angeles are seeing revenue declines as diners order fewer appetizers, drinks and desserts, even when reservations remain strong. She points to GLP-1 medications and declining alcohol consumption as possible factors, alongside tighter household budgets and explores how restaurants can adapt with smaller portions and zero-proof options.

Why it matters: Full dining rooms don’t necessarily translate into healthy sales, particularly when customers skip high-margin drinks and additional courses. Operators may need to rethink portion sizes, expand appealing nonalcoholic offerings and carefully price smaller dishes. The challenge is adapting to changing habits without compromising profitability or the guest experience. (Katie Couric Media)

Did your restaurant take a government loan during COVID? Federal pandemic-era Economic Injury Disaster Loans helped thousands of restaurants survive COVID-19, but many operators are now struggling to repay them. As sales remain sluggish and food, labor and rent costs climb, defaults have risen sharply. For some owners, missed payments trigger additional fees, aggressive collections and even the risk of losing personal assets.

Why it matters: Pandemic debt can continue draining cash flow years after the original crisis, leaving little money to reinvest or weather new downturns. Operators struggling with payments should understand their loan terms, personal guarantees and collection risks and seek professional advice early. The broader lesson: borrowed capital can offer relief today while creating tomorrow’s financial burden. (The Guardian)

The percentage that U.S. restaurant sales rose year over year in September, marking the strongest annual gain in more than three years. (National Restaurant Association)

Most restaurants and bars are still running on a phone setup chosen years ago—tied to one location, one line and a contract that no longer reflects how the business actually operates. Zoom Phone replaces it with a simple, intuitive cloud system built to scale as you do, whether that's one site or ten.

It takes a minute to find out what a modern system would look like for your business. Request a personalized quote from Zoom.

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The Prep is written by Kelly Dobkin and edited by Bianca Prieto.