Denver’s licensing department confirmed this week that the city has seen a sharp drop in the number of licenses for restaurants in recent years.
In July 2023, there were 2,356 active or recently expired business licenses for Denver restaurants, according to estimates from city officials.
By February 2025, less than two years later, that figure had dropped to just 1,780 active or recently active licenses.
That’s a drop of 24 percent, or about 600 licenses, according to the Department of Excise and Licenses. Those eye-opening figures come from a new analysis released by the department to Denverite and others.
But figuring out what exactly the decline means is a different question — and an important one. The reality of just how much Denver restaurants are suffering has become surprisingly controversial this year.
For some in the restaurant industry, figures like this evidence that a change is needed. They are asking state lawmakers to lower the tipped minimum wage, allowing restaurants to reduce pay for servers and other tipped employees, a shift that would be especially impactful in Denver.
But restaurant workers and their advocates are arguing against the change, saying that it will slash pay as people struggle to afford life in the city. And a spokesperson for the licensing department cautioned against relying solely on the data as an economic indicator.
The argument over restaurant closures
This whole debate started with a Denver Post article last month headlined: “The number of Denver restaurants has shrunk 22% since 2021.”
The figure hit home. But various city officials and others have raised concerns about the claim.
“Denver hasn't lost 22 percent of its restaurants. That claim is based on incomplete data from our Department of Excise and Licenses,” said Matthew Fritz-Mauer, labor policy director for the Denver Auditor’s Office. “Complete data shows a steady industry, not one in a tailspin.”
Fritz-Mauer was testifying against a proposal to allow restaurants to lower base wages for tipped employees.
A big point of concern: The city had changed licensing systems in 2023, raising the possibility that some of the drop described in The Denver Post was actually just due to changes in recordkeeping.
The city’s new analysis is meant to overcome that issue. It starts counting from 2023 onward, after the new system was implemented.
And after making some assumptions and extrapolations, the city licensing department found, indeed, that the number of licenses for freestanding restaurants had dropped by close to a quarter in a matter of years.
Does all this actually mean restaurants are closing?
The city has lost plenty of new and classic restaurants in recent years, from the Colfax classic Steve’s Snappin’ Dogs to the newly opened Harvey Park Grille. But the drop in the number of licenses isn’t an ironclad indicator of just how many restaurants have closed.
The city grants a license when a business has passed its inspections for safety and welfare, so it is a decent sign that someone is trying to open a restaurant somewhere.
“The overall decline in restaurant licenses is there, and the mayor's office finds that quite concerning,” said Dominick Moreno, deputy chief of staff to Mayor Mike Johnston, at the recent statehouse committee hearing.
But licensing data can still be finicky.
“Issuing a license does not mean that the particular location is open for business, struggling, or thriving,” Escudero pointed out in an email.
He continued: “Any of the licensing numbers we provide should be seen as just that – a licensing indicator, not an economic one, as described above, and should not be taken as the sole indicator of industry strength.”
One other question mark with the data: Licenses are a lagging indicator. A restaurant may go out of business but still have an “active” license for up to a year. So while the city’s licensing data points to a decline between 2023 and 2025, it may have actually begun much earlier.
City officials have not provided a similar analysis of earlier years, saying it would be too difficult with the change in the data system.
Restaurateurs are sounding alarms.
“Average restaurant margins used to be three to five percent. Now we are seeing one to two percent, if restaurants are lucky,” Sonia Riggs, president and CEO of the Colorado Restaurant Association, told state lawmakers at the committee hearing.
Juan Padró, the owner of Culinary Creative Group, said the exact number of closures has been hard to nail down. But factors like the increasing cost of labor and supplies have hit independent restaurants especially hard, he said.
“I think the number of closures might be higher,” he said. (For his part, Padró has opened several new restaurants recently, but also sold one.)
Kristin Rauch, executive director of the nonprofit EatDenver, told state lawmakers it had become a crisis.
“The challenges facing restaurants today are forcing many to consider drastic decisions. In our most recent year-end survey, 38 percent of respondents said they'd considered moving out of state, and 69 percent have considered selling their businesses entirely,” she said.
The question is what to do about it.
Riggs, Padró and Rauch were speaking in support of HB25-1028, a measure that would lower the tipped minimum wage, which is the base wage that restaurants have to pay to tipped workers.
The proposal would return all cities to the current statewide tipped minimum wage, which is currently $11.79 an hour. That could cost Denver workers up to $4 an hour, reversing years of recent gains in the tipped minimum wage in the city.
Many restaurant workers and their allies have turned out against the proposal, saying it would undermine workers’ pay when they’re struggling to get by.
“Why is it easier to point the figure at those people instead of saying, how do we find a solution that lifts us all up? People make up the fabric of the society, and we cannot stand by as people, our constituents, the people we serve, are crushed by the systems that refuse to recognize their humanity,” Denver City Councilmember Shontel Lewis said at the hearing.
HB25-1208 has cleared its first committee hearing and heads next to the House Finance Committee. It would then go to the full House and then to the Senate.
