The objective of this study is to examine how customers build emotions, perception, and future intentions through counterfactual reasoning in situations of service failure and its recovery effort in a restaurant setting. The experiment survey was conducted online with the assistance of Gallup Korea. As confirmed by prior research in service failure, respondents in a normal event exhibit a rising degree of recovery satisfaction and revisit intention as the level of recovery increases. Training wait staff about first-time customers’ counterfactual reasoning will help restaurant managers to expand their customer bases by increasing the market share of new customers.