In 1976, a German-American psychologist named Erich Fromm published a book called To Have or To Be? He was not writing about restaurants. He was writing about the human condition. But I have thought about his central argument more times than I can count when I am sitting across from a restaurant owner who knows, in their gut, that it is time to close -- and cannot bring themselves to do it.
Fromm argued that there are two fundamental ways to live. The first he called the having mode: you locate your sense of self in what you own, what you control, what you can point to. The second he called the being mode: you locate yourself in who you are, how you engage with the world, what you are capable of becoming.
His warning was direct. When your identity is fused to a thing, losing the thing feels like losing yourself. And when losing yourself is the alternative, people will hold on to almost anything -- long past the point where holding on makes any rational sense.
What this looks like in a restaurant
I have seen it hundreds of times. An owner whose numbers have been telling a clear story for 18 months. Rent is 14% of sales. Prime cost is pushing 75%. The personal guarantee is sitting there like a loaded gun. Every month they put in another $8,000 from savings to keep the lights on.
And they cannot close.
Not because they do not understand the math. They understand it perfectly. They cannot close because the restaurant is not just a business to them. It is the thing they built. It is the proof they got somewhere. It is the answer to the question of who they are. Fromm would say they are living in the having mode -- and the restaurant is what they have.
Fromm put the trap plainly: "If I am what I have, and what I have is lost, then who am I?"
That is not a rhetorical question for the owners I work with. It is the actual terror underneath the spreadsheet conversation.
The sunk cost is not the money
Most people understand sunk cost fallacy in the abstract. You do not keep throwing good money after bad. The money you already spent is gone; the only question is what you do from here.
But the sunk cost that keeps restaurant owners frozen is not the money. It is the identity investment. The years of 70-hour weeks. The missed birthdays. The relationships that frayed. The version of yourself that was going to make this work. Closing the restaurant means admitting that version of the story does not have the ending you planned.
That is a much harder thing to let go of than money.
A 2019 study published in the Journal of Personality and Social Psychology found that people are significantly more likely to continue a failing course of action when they have tied their self-concept to it -- not just when they have invested money or time. The self-concept investment was the stronger predictor of persistence. The researchers called it "identity-based sunk cost." Restaurant owners did not need a study to know this. They live it.
The distinction Fromm actually made
Fromm was careful not to say that owning things is the problem. He was not arguing for minimalism or poverty. He owned things. The question was the relationship to what you own.
He drew the line at whether the thing serves your growth or whether you serve the thing. A restaurant that is teaching you, challenging you, building something real -- that is a different relationship than a restaurant you are propping up because you cannot face what closing it would mean about you.
Most restaurant owners start in the first category. The best ones I have worked with are honest about when they crossed into the second.
What "being mode" looks like in a restaurant exit
The owners who navigate a restaurant closure well -- who come out the other side with their finances intact, their relationships intact, and their sense of self intact -- tend to share one quality. They separate what they built from who they are.
They can say: I built something real. It ran for eight years. I fed people, I employed people, I learned things I could not have learned any other way. And the economics no longer work. Those two things can both be true.
That is not resignation. That is clarity. And clarity is what makes it possible to negotiate a lease buyout instead of abandoning the space. To sell the equipment above liquidation value instead of walking away from it. To protect the personal guarantee instead of letting it become a judgment. To leave with something instead of nothing.
The National Restaurant Association has documented for years that the owners who engage outside help early -- before the crisis becomes a catastrophe -- consistently achieve better financial outcomes than those who wait. The difference is almost never information. The owners who wait usually know what the numbers say. The difference is the willingness to act on them.
The honest version of this conversation
I am not a psychologist. I am not going to tell you how to resolve a 40-year-old identity question in a 30-minute call. What I can tell you is what I have seen work.
The owners who come through a restaurant exit well are not the ones who did not care about the restaurant. They are the ones who cared deeply about it -- and cared more about what came next. They had something to move toward, not just something to move away from. A different business. A retirement they had been deferring. Time with their family that the restaurant had been consuming.
Fromm's being mode is not about owning less. It is about growing into what you are capable of, rather than clinging to what you already have. For a restaurant owner at a crossroads, that distinction is not philosophical. It is practical. It is the difference between a controlled exit and a collapse.
If you are holding on to a restaurant that the numbers say you should close, the question worth sitting with is not whether the math is wrong. You already know the math. The question is: what are you afraid closing it would mean about you?
That is the conversation worth having.
Related reading: Should I Close My Restaurant? A Practical Decision Guide | Restaurant Owner Burnout: The Signs Nobody Talks About | What Happens After You Close: One Owner's Story
Source: This article draws on Erich Fromm's framework as discussed in "Psychologist Erich Fromm argued there are two ways to live" and his original work, To Have or To Be? (Harper & Row, 1976).