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Boiling Point?

The restaurant industry is feeling the heat.

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This story appears in the August 2007 issue of Entrepreneur. Subscribe »

Across the country, restaurateurs are cooking up a storm, but the industry might be facing its own storm of sorts. Rents are on the rise due to a commercial property squeeze. Labor costs are on the brink of increasing as the recently approved a hike and more states propose living wage laws. prices are rising, with consumers wanting organic and high-quality products. Will this perfect storm cause a major shakeout?

"This is not the first time our industry is facing climate hurdles," says Hudson Riehle of the National Association, who reports that this year, the industry is posting its 16th consecutive year of real sales growth. Nor are entrepreneurs being deterred by the challenges.

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