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Owning a restaurant may be your dream — but before you can welcome your first customers, you’ll need to decide what type of establishment you want to open. Are you imagining a casual fast-food joint, or do you want to build a fine-dining hotspot? When you go into the process with a clear concept, it’s easier to find funding, choose properties, and allocate your resources.

What types of restaurants are the most popular with customers?

Choosing a concept is one of the first steps for a successful restaurant launch. It’s critical to the success of the business — after all, not all types of restaurants are suitable for every market or owner. Taking the time to choose the right option can make the process of learning how to start a restaurant more positive and profitable.

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Quick service (fast food)

Quick-service restaurants (QSRs), which are also called fast-food restaurants or limited-service restaurants (LSRs), are all about efficiency. They’re designed to provide a fast, convenient casual dining experience for customers. To achieve this goal, fast-food spots typically have a limited menu, streamlined food-prep processes, and easy-to-clean interiors. Most offer a counter-serve model, but many also integrate drive-throughs, app ordering, and self-ordering kiosks.

Why it’s popular: Because of their streamlined operations, fast-food establishments often have a lower price point than other types of restaurants. They provide speedy, casual dining, which is appealing to customers who want to get in and out. Most QSRs offer food that’s easily transportable to accommodate guests on the go.

Why it’s profitable: By eliminating table service and keeping operations simple, fast-food owners spend less on labor. Employees can focus most of their time on repeatable, predictable back-of-house operations.

Fast casual

Like fast-food establishments, fast casual restaurants offer quick service and casual dining. However, they often have more extensive menus, more options for customization, and a wider variety of healthy options. The interiors are still relaxed but may be slightly more upscale. Most fast casual restaurants use a counter-ordering model and similar ordering technology; some deliver food to customers’ tables. Panera Bread and Blaze Pizza are both examples of fast casual restaurants.

Why it’s popular: Fast casual restaurants offer quick service and a casual but comfortable environment that appeals to a broad demographic. Practically any cuisine can be adapted to this model, giving you more flexibility in the menu.

Why it’s profitable: This restaurant concept typically has a higher price point than a fast-food restaurant — all while benefiting from limited staffing requirements and no table service. It also appeals to health-conscious diners, which can increase foot traffic.

Ghost kitchen

Ghost kitchens are types of restaurants that prepare meals only for delivery; they don’t have a storefront, a seating area, or visible signage. A ghost restaurant might operate out of a different restaurant; this might happen if the owners want to increase revenue or explore dishes that don’t fit with the primary concept. In other cases, people operate ghost kitchens from shared commercial kitchens or even food trucks. Customers can typically order with delivery apps such as Grubhub.

Why it’s popular: Ghost restaurants are completely flexible — you can change the offerings daily without informing customers or reprinting new menus. Plus, you have the freedom to try out trendy foods or limited-time offerings. Customers still enjoy delicious food and convenient delivery.

Why it’s profitable: Without the need to buy property, purchase kitchen equipment, or offer table service, restaurant owners can get a ghost restaurant up and running faster and for less money than traditional restaurant operations. They also save on marketing, advertising, and staffing costs.

Casual dining

Casual dining includes restaurants that offer full service in a low-key environment. It’s a broad category that covers everything from diners to pizzarias. Some casual dining restaurants might cater to families with kid-friendly food and unfussy interiors; others try to bring in a millennial crowd with sleek interiors and a wide variety of healthy, locally sourced ingredients. Restaurants in this category include Olive Garden, Applebee’s, and Chili’s.

Why it’s popular: Casual dining appeals to a broad range of diners, from seniors to young professionals and teens. The concept can be used for nearly any type of food and menu size, and it works with or without a bar.

Why it’s profitable: Casual dining restaurants are typically more expensive than QSRs and fast casual restaurants, but they still provide a good value for customers. As a result, people may be more likely to choose these types of restaurants over more upscale options for everyday dining. 

Upscale casual

Compared to casual dining establishments, upscale-casual restaurants provide a more elevated dining experience. They often feature innovative menus with higher-quality ingredients. Owners typically pay greater attention to interior decor and the overall vibe of the space, aiming for a stylish ambiance. Bistros and gastropubs or chains like Ruth’s Chris Steak House often fall into this category.

Why it’s popular: Customers know they’re going to enjoy delicious food, polished service, and an upscale experience. The atmosphere is a big part of the draw — it makes the restaurant an appropriate choice for dates and special occasions.

Why it’s profitable: Because they’re delivering quality across the board, upscale-casual restaurants can charge higher prices than most other types of restaurants. However, it’s important to factor in higher costs for property, decor, training, labor, and ingredients. Excellent management and careful financial management are a must for these contemporary casual restaurants.

Fine dining

Fine dining is the pinnacle of the restaurant industry. These establishments offer precisely prepared food, impeccable service, and luxurious interiors. Michelin-starred restaurants often fall into this category; you may have also heard of Noma, Le Cinq, or Eleven Madison Park. These types of restaurants are often associated with a stuffy, formal feeling, but that’s changing. Fine-dining spots such as Nobu have decided to adopt the laid-back vibe of contemporary casual restaurants while still maintaining top-notch food and service.

Why it’s popular: Fine-dining restaurants offer unparalleled quality in every aspect of the dining experience. They’re often a haven for the world’s best chefs, who work with the best ingredients and precise culinary techniques. If you’re passionate about the restaurant industry, this is an opportunity to make your mark.

Why it’s profitable: Although the serving sizes at fine-dining restaurants are much smaller than any other types of restaurants, the prices are much higher. Demand also tends to be high, with months-long waiting lists. If you can work with an established or up-and-coming chef, this category has a high profit potential.

How to select the right type of restaurant

Once you understand the types of restaurants, you’ll likely feel drawn to one or two top options. If not, think through the experience you want to offer and the problems you want to solve. If you’re passionate about providing healthy food at an affordable price point, fast casual or casual dining could be a good fit. Do you want to provide a memorable experience that brings joy to customers? The upscale-casual or fine-dining categories might suit your vision perfectly.

From there, it’s important to validate the idea further; due diligence is an essential part of creating a successful restaurant.

  • Demand. Can your local market support a restaurant in your chosen category? Conduct thorough market research to ensure customers are interested in the cuisine, service style, and restaurant ambiance you want to offer. Fast food is often an easy sell, but fine dining has specific market requirements.
  • Funding. Every restaurant category comes with different startup costs. Research the averages for your area, and make sure you can find adequate funding.
  • Experience. Do you have the experience and the connections to be successful in your chosen category? This is particularly important for fine dining, which tends to attract the most discerning customers.
  • Interest. If you’re planning to be closely involved in the restaurant, it’s helpful to have a true interest in the concept. The restaurant industry is challenging, and passion can help sustain you during tough times.

Utilize Grubhub resources

Deciding what type of restaurant you want to open is the beginning of an exciting business journey. The right concept is essential; choosing an option that works for you and the local market can help set the restaurant up for success.

As you move forward, consider how takeout and delivery will factor into the operation. A reliable partner can help, particularly if you don’t have the bandwidth or capital for in-house delivery drivers. That’s where Grubhub can help — we provide the online ordering platform and the drivers so you can focus on running your restaurant. We also offer helpful tools to help you run your business, including technology integrations and marketing and promotional resources. You can also utilize Direct, which makes it easy to create a commission-free branded online ordering website.

To discover how we can support your growing fast-food, casual, or fine-dining restaurant business, get started with Grubhub for Restaurants today.