Your thoughts about mom and pop turning the store/business over to their kids, unfortunately, is accurate much of the time.
We have a bagel shop a couple miles up the road, where lots of locals used to go in and grab a cup of good quality fresh-brewed coffee on the way to work, grab a breakfast sandwich, etc. They also had a reasonably nice, healthy-ish lunch menu/deli. The husband/wife opened the shop up about a decade ago, and the wife was always there, and a lot of the time the husband was too, despite working another job with the local telephone company (he would go in and help out in the early mornings before he had to go to work). Always friendly, happy to see you, the food was good and the service was great. They knew you by name. You felt welcomed, and that atmosphere made you feel good about supporting a local family-owned business.
So my family and I relocate to Europe for a coupe of years with the wife's job. Then we come back home two years later. Within a few days of returning, I go to the local bagel shop for a cup of coffee and breakfast on-the-go, on my way to the course to play some golf. It was the middle of the week. I walk in and the first thing I notice is a waiting-to-order line extending all the way out to the entrance door. No sign of mom or dad, but rather a couple of older teenagers manning the counter register and preparing the food. So much for ordering a breakfast sandwich... I grab a to-go cup and get my coffee. Then wait 10 minutes to pay for it. By the time I paid for it, my coffee was already luke warm. I was like, "oh well... I just probably showed up on an unusually busy day."
Go there a few days later. Line wasn't nearly as long, but it took nearly as long to pay for my coffee and breakfast sandwich. Only to find out after hitting the road and one bite later that it wasn't what I ordered. Coffee was once again luke warm. So I go back to the shop, explain to them that they screwed up my order. They apologized and made me another sandwich. Get back in the car and within one bite - I'm pulling a foot-long hair out of my mouth. I chuck the sandwich in the bag without finishing it.
Okay... two bad experiences, on consecutive visits no less. Maybe they're simply having a bad week. Not ready to write them off completely, just yet.
The next visit, several days later, on our way to church that Sunday morning. We stop to grab some coffee. Again, no sign of mom or dad. Again, the coffee isn't hot. So I just ask the two kids manning the counter, "are the owners around?" Turns out that they opened up two additional shops in neighboring townships, and they turned the operation there locally over to them (their kids). No, they're no longer around, although they still own the business.
I've always been of the mindset that if the owner/manager doesn't know that something is wrong, they can't address the problem and resolve it. But with the owners not being around, you're left with complaining to two teenage kids who aren't going to pass along a negative memo to mom and dad, because (1) they obviously don't care, otherwise the coffee, at the very least, would be freshly brewed and warm (it is a coffee shop, after all), and (2) they're not gonna jeopardize their jobs with passing along negative feedback about the poor quality of the food they make and their lack of service.
Last week, there was a fire that basically destroyed the business. The local news stated that the fire had started in the back of the shop and basically gutted everything. While it would be unfair to assume that employee negligence played a role, I can't but help wonder if having mom or dad there, overseeing the operation, would've perhaps prevented it.
That's just one example, of several that I'm familiar with, that reinforces your point. On the rare occasion it's a completely different outcome, where the parents leave, their kids come in and change things up, appeal to a younger generation and freshen things up enough to remove what had become a stale business image. But most of the time, in my experiences, this isn't the case.
As much as I dislike McDonalds - the coffee is hot, the breakfast sandwiches are decent, and for less than 5 bucks - I can get my order and be on the road to the course within a couple of minutes. And over the past 4 years since I've been back, I drive by that bagel shop on the way to the course. Yet I drive 10 minutes out of my way to hit Micky D's on the way to the course.
It's sad, really. Especially hearing that the business was gutted by fire a few days ago. Especially knowing that for a number of years, whether I was playing golf or not - I always went there for my morning coffee.