Owner Basil Fawlty, his wife Sybil, a chambermaid Polly, and Spanish waiter Manuel attempt to run their hotel amidst farcical situations and an array of demanding guests.
A selectively deaf woman named Mrs Richards insists that she has had a large amount of money stolen at the hotel, and against Sybil's wishes Basil puts a fiver on Dragonfly.
A psychiatrist and his wife come to stay and Basil thinks Sybil is telling them all about his life.
An American and his wife get unsatisfactory service at Fawlty Towers when he orders a Waldorf salad, after the kitchen has closed.
Unknown to Basil, a guest dies in the night and he tries to serve him breakfast anyway and an obnoxious woman insists on service for her dog.
Sybil leaves before Basil's surprise anniversary party and Basil spends the evening trying to convince their friends she's ill.
The health inspector is coming and Basil tells Manuel to get rid of his pet rat, which he later finds out is named Basil.