According to a study published last year in the Strategic Management Journal by Daniel Sands, a professor at the London School of Management, in New York City, 40% of starred restaurants have closed over the past 20 years. The Economist dubbed this the “Michelin curse,” meaning that restaurants tend to close more quickly after receiving a star.

According to calculations by the Japanese media outlet METROPOLIS, Nara, Japan’s most Michelin-starred city, will have 23 starred restaurants by 2025. For a population of 367,000, this translates to approximately one Michelin-starred restaurant for every 16,000 residents.

The Michelin Curse: When Prestige Becomes a Business Liability

The Paradox of Success

A groundbreaking study published in the Strategic Management Journal has revealed a counterintuitive phenomenon that challenges conventional wisdom about business success: restaurants that receive Michelin stars are significantly more likely to close than those that don’t. This finding, dubbed “the Michelin curse” by The Economist, demonstrates how even the most prestigious accolades can create unexpected business challenges.

The Research Behind the Findings

Dr. Daniel Sands from UCL School of Management conducted an extensive 20-year analysis (2000-2019) of New York City’s elite restaurant scene. His research focused on 276 restaurants that opened between 2000 and 2014 and received positive New York Times reviews, providing a controlled baseline of high-quality establishments.

The results were striking: 40% of restaurants awarded Michelin stars between 2005 and 2014 had closed by the end of 2019. More specifically, of the 92 Michelin-starred restaurants in the study sample, 42 closed by 2019 (45.7%), compared to only 35 closures among the 184 non-starred restaurants (19.0%). This represents a 2.4 times higher closure rate for Michelin-starred establishments.

The Mechanisms of the Curse

The study identified several interconnected factors that contribute to increased business vulnerability after receiving a Michelin star:

Upstream Pressures: Landlords, suppliers, and employees recognize the perceived value increase and demand higher compensation. Landlords often raise rents significantly, suppliers increase prices for premium ingredients required to maintain standards, and staff expect higher wages commensurate with working at a starred establishment.

Downstream Challenges: Customer expectations intensify dramatically. Diners expect perfection in every aspect of the experience, from food quality to service standards. The restaurant also attracts customers from further distances who may have different expectations and dining patterns compared to local regulars.

Operational Strain: The pressure to maintain star status requires consistently sourcing the highest-quality ingredients and maintaining impeccable standards, significantly increasing operational costs. The constant threat of inspection creates ongoing stress for staff and management.

Nara: A Michelin Density Leader

The Japanese city of Nara provides an interesting counterpoint to the closure statistics, representing the world’s highest density of Michelin-starred restaurants in the midsize city category. According to calculations by METROPOLIS Japan, Nara has 23 Michelin-starred restaurants serving a population of 367,000, creating a ratio of approximately one starred restaurant for every 16,000 residents.

The 2025 Michelin Guide Nara features 83 total restaurants, including 4 Two-Star establishments and 18 One-Star restaurants. This remarkable concentration demonstrates that while individual restaurants may face challenges from starring, some markets can sustain exceptionally high densities of acclaimed establishments.

The Broader Industry Impact

The phenomenon extends beyond New York City. Recent years have witnessed high-profile closures of Michelin-starred establishments globally, including Michel Roux Jr.’s Le Gavroche in London, Bristol’s Casamia, and Tom Brown’s Cornerstone. In Singapore, eight one-Michelin-starred restaurants closed in 2024 alone.

Some chefs have proactively returned their stars to escape the pressure. Spanish chef Dani García famously closed his three-Michelin-starred restaurant just 22 days after receiving the third star, citing concerns about maintaining the required focus and losing creative freedom.

The Double-Edged Nature of Recognition

While Michelin stars undoubtedly boost publicity—the UCL study found that Google search intensity for newly starred restaurants increased by 35%—this attention comes with substantial costs. The research reveals that even positive third-party evaluations can create value appropriation challenges that ultimately threaten business survival.

The findings underscore a crucial business principle: external recognition, while valuable for prestige and marketing, must be carefully managed to avoid creating unsustainable operational pressures. For restaurant owners and other business leaders, the study serves as a reminder that success metrics should align with long-term sustainability rather than external validation alone.

This research challenges the assumption that prestigious awards automatically translate to business success, revealing instead that they can create a complex web of increased expectations, costs, and pressures that require careful navigation to maintain viability.