Written by Ron MacGillivray, owner of Vancouver’s Fable Kitchen and Fable Diner. Michelin Bib Gourmand–recognized Fable Kitchen closed on September 20, 2026, after 14 years in Kitsilano, following Fable Diner’s August 23 closure at Main and Broadway.
People keep asking me the same question: Why are you closing Fable Diner and Fable Kitchen? It’s a fair question. Fable Kitchen has earned Michelin recognition, received strong reviews, built a loyal following and become a destination for celebrations and special occasions. We’ve had great food, great service, a welcoming atmosphere and a team that genuinely cares about what we do. From the outside, it looks like a restaurant that should be thriving. So why close?
There isn’t one simple answer. But after years of watching costs rise and margins shrink, one word keeps coming to mind: unsustainable. A business becomes unsustainable when it can no longer continue operating under its existing conditions with accumulating losses or compromising what makes it successful. That’s the reality I’ve been grappling with as a restaurant owner. At the end of the day, a restaurant is a business. It needs to generate enough revenue to cover its expenses and, ideally, make a profit. Otherwise, it cannot survive indefinitely, regardless of how much people love it.
On the surface, the restaurant business seems straightforward. We prepare food and drinks, guests pay for them, and if the food, service and atmosphere are good, people return and recommend us to others. More customers should mean more revenue and, ultimately, more profit. But the economics are considerably more complicated.
The cost of staying open
Before a guest even walks through the door, a restaurant has already incurred significant expenses. Rent, insurance, utilities, property taxes, maintenance and repairs are just the beginning. We aim to keep rent within 7 to 10 per cent of revenue and manage our other overhead costs within a range that allows the business to remain viable. But these expenses have increased substantially over the past several years, driven by a combination of inflation, supply-chain disruptions, the lingering effects of COVID-19, energy prices, labour costs and other pressures.
At one of our locations, overall rent increased by 40 per cent in 2025. Higher costs alone are difficult to manage, but the problem becomes more serious when revenue doesn’t grow at the same rate. Restaurants can increase sales, improve efficiency or adjust prices to compensate for rising expenses. However, customers are also facing higher costs in their own lives, leaving many with less disposable income to spend on dining out.
That creates a difficult balancing act: our costs keep increasing, while our guests are becoming more conscious of what they spend.
And fixed costs are only part of the equation. Labour is our largest expense, followed by food. Our target is to keep these costs at approximately 60 per cent of revenue, leaving the remaining 40 per cent to cover rent, utilities, insurance and other operating expenses.
Those other expenses include everything from cleaning supplies, packaging and office materials to marketing, pest control, permits, licences and equipment repairs. These costs have also risen, putting further pressure on already narrow margins. There are places a restaurant can cut back. We can reduce marketing expenditure, delay replacing equipment or look for savings in supplies. But those measures only go so far.
Food and labour are the foundation of the business. We cannot continually compromise on ingredients, service or the people required to deliver the experience our guests expect. When food and labour costs rise faster than sales, the margin disappears.
The question I hear most often is: Why not simply raise menu prices? We can, and we have. But pricing is not as simple as passing every cost increase on to the customer. At some point, higher prices affect how often people visit, what they order and whether they feel the experience represents good value.
Our own numbers illustrate the challenge. At Fable Kitchen, our average guest spend was approximately $39 in 2019, and we served around 900 guests per week. Today, our average spend is approximately $42, while weekly guest counts have fallen to around 730. That’s an increase of approximately 7 per cent in average spend, alongside a decline of roughly 19 per cent in weekly guest numbers. In other words, we’re generating slightly more revenue per guest but serving considerably fewer people. Meanwhile, our costs have risen across nearly every category. This is the squeeze facing restaurants: the cost of delivering the experience keeps rising, but there is a limit to what customers are willing or able to pay.
What the numbers reveal
To better understand what had changed, I compared the economics of operating Fable Kitchen in 2018 and 2025. The comparison highlighted a difficult reality: more of each dollar spent by a guest was being absorbed by operating costs, leaving less for the business itself.
Employees are earning more through wages and tips. Based on our estimates, average hourly compensation, including tips, increased from approximately $30 to $40 over the period. Government also receives taxes and employment-related contributions associated with restaurant operations. Higher wages are important, and employees deserve to be compensated fairly. But when labour costs increase faster than revenue, restaurants have to make difficult decisions about staffing, service and the way they operate.
In our case, we employed fewer staff than we did previously. That meant fewer positions and less flexibility to deliver the same level of service.
Consider what a guest’s money bought at Fable Kitchen. In 2018, a guest could spend approximately $62 on an appetizer, a main course, dessert and a glass of wine. By 2025, that same amount no longer bought the same meal. Guests were paying more for individual items and receiving less for their money.
The pressure extended beyond the menu. We had less room in the budget for marketing and promotions that could help attract customers. We also had fewer staff available to support the experience we wanted to deliver. Our comparison of a typical meal found that, in 2018, we could provide a more extensive dining experience, including a host to greet guests and an additional cook on the line to help prepare more elaborate dishes. By 2025, we were delivering a simpler experience with fewer staff and less room to absorb unexpected costs.
The most troubling finding was the impact on the bottom line. Based on our analysis, a $62 meal that generated approximately $5.87 for the business in 2018 was no longer profitable in 2025. Labour costs were a major contributor, increasing by almost 10 percentage points in our comparison.
Our calculations showed that we needed approximately 100 additional guests per week to reach break-even or profitability—roughly 14 to 15 more guests per day. That is what makes this experience so difficult to explain. We weren’t necessarily short of a good reputation, loyal customers or a product people wanted. We were short of the volume needed to make the economics work.
During Fable’s final four weeks of operation, guest counts returned to levels comparable to those we had experienced in 2018. That was bittersweet. It reinforced what we already knew: we had a restaurant people loved, a talented team and loyal customers who wanted us to succeed. But a few strong weeks could not erase the accumulated losses or the financial pressure we had been carrying.
Fable Diner, at Main Street and Broadway, faced its own challenges while the Broadway Subway construction project continued. Maintaining the business through that period required additional financial support, at a time when operating costs were already rising. The experience made us question how long a small business can reasonably be expected to absorb losses while waiting for external conditions to improve.
Without the financial burden associated with the Main Street and Broadway location, and the need to keep investing in the business while waiting for the construction project to be completed, I believe Fable Kitchen could have remained open. We would not have been forced to consider selling it. That is a difficult conclusion to reach after investing so much time, energy and money into building something meaningful.
Restaurants are often discussed in terms of what they charge customers, but less attention is paid to what they contribute to the broader economy. Over the past three years, our records show that Fable Diner and Fable Kitchen paid more than $360,000 in GST, $114,500 in PST, $234,252 in property taxes, $325,000 in employment-related remittances and other government charges, including Employment Insurance, Canada Pension Plan contributions, WorkSafeBC and the employer health tax, as well as more than $15,000 in permits and licences. Together, these reported payments total more than $1 million.
These figures need to be understood in context: some payments are taxes collected and remitted, while others are direct business expenses or employer contributions. Regardless, they illustrate the scale of the financial activity associated with operating two restaurants. That contribution exists alongside the wages paid to employees, purchases from suppliers and economic activity generated in our communities. Small businesses are important to British Columbia’s economy, but they cannot be expected to absorb every increase in operating costs indefinitely. When margins become too narrow to sustain operations, the consequences extend beyond the owner. Employees lose jobs, suppliers lose customers and communities lose places that have become part of their identity.
I believe we need a more serious conversation about whether our current economic and policy environment gives independent businesses a realistic chance to remain viable.
What needs to change?
There is no single policy that will solve the challenges facing restaurants. Nor should the responsibility for keeping a business viable rest entirely with government. Owners must manage costs, adapt to changing customer behaviour and make difficult decisions about their operations.
But governments can examine whether existing policies are unintentionally adding to the pressures facing small businesses, and whether targeted changes could help businesses remain viable without shifting unreasonable costs onto workers or taxpayers.
Three areas deserve closer attention.
Greater predictability around labour costs
Minimum-wage increases are intended to help workers keep pace with the cost of living. But for employers operating on narrow margins, increases can be difficult to absorb when other costs are rising at the same time. Rather than calling for an indefinite freeze, I believe governments should examine a more predictable, multi-year approach to minimum-wage adjustments. Businesses need sufficient notice and a realistic opportunity to plan staffing levels, forecast expenses and adapt their operations.
A framework that balances wage growth with economic conditions and small-business affordability could provide greater certainty for employers while recognizing the importance of fair compensation for workers. It would also be worth examining how wage-related increases affect supplier pricing and the broader cost of goods sold, rather than assuming every business can absorb those increases without consequence.
Review the tax treatment of restaurant dining
Governments should examine whether the tax treatment of restaurant meals is discouraging consumers from dining out and whether practical changes could provide relief to independent restaurants. For example, policymakers could assess the impact of temporarily reducing or removing GST on eligible restaurant meals, particularly at independent establishments, and weigh the potential benefits against the cost to government revenue.
The comparison with grocery-store purchases also deserves a closer look. Certain basic groceries are zero-rated for GST, while restaurant meals are generally taxable. Prepared foods sold in grocery stores can have different tax treatment depending on the product and circumstances, so the comparison is not always straightforward.
The question is whether there are targeted, practical ways to make dining out more accessible while supporting the businesses that employ people, purchase from local suppliers and contribute to their communities. Any reform should be clearly defined, easy to administer and evaluated against its intended outcomes.
Make commercial property taxation more predictable
Commercial property taxes are another significant concern, particularly for independent restaurants operating in areas where assessed property values have increased substantially. A business can face a growing property-tax burden even when its sales and profitability remain flat. In leased premises, some of these costs may be passed on to tenants, depending on the terms of the lease.
The increase in a property’s assessed value may benefit the owner, but the financial consequences can also reach the business operating on that property, even if its revenue has not increased. Governments should examine how commercial property taxation affects small businesses and explore ways to make the system more predictable and equitable. Options could include reviewing how tax increases are allocated, improving transparency around the impact on tenants and considering targeted relief for eligible small businesses facing exceptional cost pressures.
Any reform would need to account for municipal revenue requirements, the interests of property owners and the practical implications for commercial leases. But the underlying question is worth asking: should a small business’s ability to survive be increasingly affected by rising property values when its own revenue and profitability have not kept pace?
A conversation we cannot afford to ignore
I am proud of what we built at Fable. We created restaurants that people cared about, employed talented people and contributed to our community. Our guests continued to show up, and our team continued to deliver. But reputation, recognition and loyal customers cannot compensate indefinitely for an operating model that no longer works financially.
Closing Fable has been one of the hardest decisions I’ve had to make. It has also reinforced how important it is to look beyond a restaurant’s popularity when assessing its health. A busy dining room does not necessarily mean a profitable business. Strong reviews do not guarantee sustainable margins. And when a restaurant closes, the explanation is not always that customers stopped caring.
Sometimes, the business reaches a point where the numbers no longer add up. If we want independent restaurants and other small businesses to remain part of British Columbia’s communities, we need to understand those economics and have an honest conversation about what it takes to keep them viable. By the time a business closes, it may already be too late.
