How to Choose the Right Type of Restaurant to Open

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How to Choose the Right Type of Restaurant to Open

The restaurant market is quite a competitive business, dripping with establishments for diners to choose from, and even more restaurants open here and again. Owning a restaurant is a never-ending game, and you have to stand out and get people excited, to succeed. And since you already decided to start and are reading this article – let us congratulate you!

There are a lot of factors determining your restaurant type and concept, and research of your target audience (age, preferences, occupation), competitors (establishments running already, the menu they offer), and the location (premises and utilities available) should be considered first. Other elements include defining your budget, interviewing your potential employees to identify your future team, and establishing the size of your staff. All these added up, form a business strategy and make your dream business real. Here in this article, we describe basic restaurant types, with the advantages and disadvantages of each type listed to help you build your business properly.

That is why, the team of Restaurants A to Z has prepared a list of types of restaurants to guide you in this complex selection process.

Going Franchise, or Going Independent

Before diving into the types of restaurants, decide on whether you are starting your business from the ground up, or under the well-known name. While the franchise is an already proven success generating profits, an independent greenfield restaurant is a whole new world where you are the boss. Below are the positive and negative aspects of becoming a franchisee:

Pros:

An established brand name brought to market;
Little to care about design and décor – everything settled by the franchisor;
Getting help in site selection, pre-opening, construction;
Getting support from the larger restaurant business behind you;
Training for the staff is included;
Patrons come to the place they know already.

Cons:

Big investments are required in the franchise fee, royalty fee, advertising fee;
Tons of paperwork;
Little room for introducing your ideas and concepts;
New meals or services can’t be added;
Possible pitfalls in the Franchise Agreement and local codes, legal advice is a must.

Pop-Up Restaurant

Pop-up restaurants have been a trend recently, and the idea keeps evolving. These are a great launching site if you haven’t decided on the format yet. Be it a Japanese restaurant or a steak house – you can choose any kind of diner and try different types before opening a brick-and-mortar restaurant.

Pros of running a pop-up restaurant:

Appealing to the audience for its novelty;
Requires lower costs to run;
Experimenting with design and trading formats;
Dishing out the menu of your choice;
A comparatively inexpensive way to found the restaurant brand;
Wide choice of locations.

Cons of running a pop-up restaurant:

A good bit of budget should be spent on marketing in social media;
Not as profitable as other restaurant formats;
Hard to gain a loyal audience;
Licenses and permits compliant with local codes are required;
Limited seating space.

Fine Dining Restaurant

The highest-priced restaurant type, is synonymous with crisp white tablecloths, waiters in tuxedos, and a chic atmosphere. It requires impeccable service and high-level knowledge of gourmet restaurants cuisine type and is known for the wide choice of expensive wines. People choose fine dining establishments for business meetings or to celebrate their birthdays, weddings, etc. The customers are assumed to make a reservation, so ensure you have a well-established communication system.

Pros of running a fine dining restaurant:

A highly profitable business to run;
No limitations in menu and design;
Several courses are offered, which makes up the bill;
Serving to an upscale audience willing to spend more.

Cons of running a fine dining restaurant:

The staff should correspond to the restaurant’s status. It might be hard to find professional employees, and a lot of time and effort are dedicated to training;
Higher expectations set;
Design, equipment, furniture, glassware should reflect the restaurant’s status and require a hefty investment.

Casual Dining Restaurant

Casual dining restaurants are known for their low-key atmosphere, contemporary design, and moderate prices. They are among the most popular types of restaurants. Falling in between the fine dining restaurants and fast food restaurants, this type of eatery serves quality foods at a reasonable price, table service included. The focus here is on a specific brand, with unique décor, local traditions featured, or specific food served.

A common tendency is a farm-to-table concept: people get more and more conscious of the origin of the food they consume, especially in big cities. Team up with local farmers or vendors and order meat, dairy, and greenery from them. This would show your customers that you support the local community and care about the food origin. In addition, local organic products make your menu more sophisticated and posh;

Pros of running a casual dining restaurant:

Healthy food served;
The restaurant can be located both in urban areas or in a destination location since patrons are coming for a brand;
High revenue potential;
Popular in different groups of customers.

Cons of running a casual dining restaurant:

Skilled staff is required;
Prices for quality local products are usually higher than if ordered straight from big vendors;
High costs are required to start the business..

Fast-Food Restaurant or Fast-Casual Restaurant

Fast food restaurants are probably most appealing to the audience owing to their convenience, low prices, and speed of serving. This is why the ingredients are usually pre-cooked and easy to serve. Another bonus offered to patrons is the delivery service and/or a pickup counter, making the dining experience even more advantageous and faster.

Fast-casual restaurants are hitting the top among different types of restaurants right now. They fall in between the casual dining restaurant and the fast-food establishment. Food is healthier and fares are higher than in fast-food restaurants, but the accent is still on “fast”, so pre-cooked meals are used here.

Pros of running a fast service restaurant:

Products are easy to cook and serve;
Cooking does not require skilled staff;
Less staff is required since there is no table service;
High revenue potential.

Cons of running a fast service restaurant:

The market is supersaturated with similar establishments; it is hard to compete;
If starting the business under your name, you risk failing since patrons are already familiar with McDonald’s or Taco Bells and would rather go with them;
Big staff turnover;
Menu positions are limited.

Ghost Restaurant

With Covid-19 spreading, the industry had to change its format to survive. It was a big break for delivery-only restaurants, putting them in the forefront. Ghost restaurants, a.k.a. dark kitchens or virtual kitchens, became quite a novelty for the eaters recently, working solely with online orders/phone orders. This type of restaurant appeals to a modern audience who opt for convenient stay-at-home ordering.nt stay-at-home ordering.

Pros of running a ghost restaurant:

Cost-effective, since you don’t need waiters or seating area, but only a kitchen and a delivery service;
The restaurant does not depend on location;
Less budget required as you need less staff;
Less spent on design;
A good point to start and try yourself in the industry.

Cons of running a ghost restaurant:

Delivery by third parties can be expensive;
Less communication with customers;
Foods should be adapted to delivery;
Fewer options to manage the customer experience.

Food Truck

A food truck is a movable fast food restaurant in essence. You can take your business anywhere and make it known by simply driving down the road. Food trucks serve a single type of food (e.g., tacos, burgers, hot dogs, ice cream, smoothies, etc.) and generally are from the same niche as fast-food restaurants, revolving around pre-made products.

Pros of running a food truck:

A good option to start with;
Profitable and popular;
Not tangled with the location, can change it right away;
Possibility to site at festivals, in parks, and other crowded places and earn more;
No costs associated with premises and seating;

Cons of running a food truck:

It might be difficult to find proper vehicle and truck equipment;
There are state-depending permits that should be acquired;
Finding a successful location might be harder than it seems;
Limited menu options.

Café or Bistro

Cafes focus on hot drinks and pastries. You can add tea, small breakfast options, lunch, finger foods, and desserts to your menu. Bistros, in addition to the foods mentioned, serve a wider-range menu, including full courses. Patrons make an order at the counter, pay right here and serve themselves.

Pros of running a café or bistro:

Do not require a large staff;
With the coffee machine being the main actor, the food processes are not complex;
Easy to set up;
Low investment is needed;
Low labor costs.

Cons of running a café or bistro:

Lower revenue;
The menu is limited to few positions;
Big staff turnover;
Predominantly a local/family business, vulnerable to get strangled by market giants.

Gallery

Buffet or Cafeteria

The patrons in buffets are offered an array of foods presented on a platform at a set price. They can take as much food as they want and mix it. The restaurant menu can concentrate on a specific direction, such as Asian cuisine, family-style menu, healthy food, etc. Cafeterias are known to be located in educational institutions, offices buildings, etc.

Pros of running a buffet or cafeteria:

Customers pay for the mass, not for the product. Since the price is unified, they take everything they want and do not limit themselves;
Equipping a buffet or a cafeteria usually costs less than other types of restaurants;
Products are usually ordered from the vendor in bulk, so the expenses are low;
Low labor cost;

Cons of running a buffet or cafeteria:

Leftovers that should be disposed of;
Difficulty in managing the food presentation space;
Customers tend to like table service more;
Risk of food going cold fast.

Pub or Bar

Pubs and bars are the perfect places to unwind with friends on Friday evening and maybe watch some sports. This type of restaurant business is well-known for long bar counters and top-shelf alcoholic beverages served with meat, finger foods, and snacks. Bars are usually a sports fan destination, so a TV, a dartboard, and the billiards are innate here.

Pros of running a pub or bar:

The most profitable restaurant type, since the menu is concentrated on alcohol;
Less expensive than operating a traditional restaurant;
Greenlight for creativity in concept and menu;
Meeting people from both business and entertainment;
High annual return.

Cons of running a pub or bar:

Working nights and weekends, which makes it hard to balance life and work;
High costs required to start the business;
Competing against other dining and entertainment establishments;
Handling unruly customers;
Strict regulations.

The options availablThe options available are uncountable: you can combine and fuse different kinds of restaurants creating a completely new concept. Following a business strategy laid down is the key to success in this exciting, tough, but most rewarding venture you’ve ever jumped into.

IIf you’re thinking about a career as a restaurateur, you honestly couldn’t pick a better place to start. Contact our restaurant experts to learn more about how to choose the right type of restaurant to open. We will set your idea into action and consult you on any issues you may face!

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