What Type of Business is a Restaurant?

What type of business niche is a restaurant? The restaurant industry is enormous! The same can be said about the opportunities it presents. But misconceptions are common when defining this business.

While some consider it a manufacturing industry, others feel it should be classified under merchandising.

However, we will set the records straight.

As you read further, you’d have a clearer understanding of what business category it falls under.
After identifying the category, we’d also discuss at length about its other features.

Restaurant Business Types

What type of business is a restaurant anyway? This business belongs to the services industry.

To be more specific, restaurants belong to the food service industry. This is also varied with so many services on offer. You only need to read on to find further details on this and others.

Because restaurants are classified under the food service industry, you’d find many types of services.
These include fast food or quick service, casual dining restaurants, fast-casual restaurants, and fine dining restaurants. Intangible benefits are also on offer in restaurants.

These include marketing, cooking, table service, as well as interior and table decor, etc.

As a restaurant owner, all those mentioned above (tangible and intangible) services are combined. This seeks to offer clients total satisfaction and value for money spent.

So, having explained this type of business, let’s discuss the different aspects of the food services sector.

Food Service Industry

The food service industry includes any type of business (including restaurants) involved in food preparation and distribution outside the home. Restaurants are considered the first of these.

It gave birth to all other services in the industry. This concept (restaurant) began in 18th century France and has become popular worldwide.

So, what other businesses are subsumed under the food service industry?

They include pubs, ice cream shops, and bars, among others. There are also significant players within this industry. Without their input, there would be little progress.

These include wholesale distributors, food service reps, self-distributing food service, manufacturers reps, self-distributing retail, and wholesale service distributors.

  • Trends Within the Food Service Industry

The restaurant or food service business can be said to be complex. This is because its diverse clientele has individual needs. These needs have to be met if real growth is expected.

So, we’ve included as many of these trends as we can. This is meant to show you how restaurants have evolved.

i. Fast Casual Restaurants

This restaurant concept has been influenced by the need for clients to customize their meals. This has infused creativity into the whole gamut of how food is being served.

Here, menus are made available. As a client, you get to choose what you want.

However, dining in fast-casual restaurants attracts higher costs. Despite its high price, there has been a steady boom in the last decade.

ii. An Increasing Rejection of GMO

There’s a steady rise in the rejection of GMO food products. This, in turn, has resulted in food menu modification. An increasing number of food chains are cutting down on GMO use. This is due to a single reason; To win client confidence and patronage.

As a result, it is increasingly becoming a selling point for most restaurants.

iii. The Millennials

Persons within this category constitute a significant segment of the market.

As a result, this group has been primarily responsible for food customization. There’s also the quality case.

So, restaurant businesses have adjusted accordingly. There are a good number of restaurants offering all such services.

iv. Fine Dining Restaurants

These types of restaurants are elaborate and exquisite. These are meant to cater to persons within the higher to middle-class category. There’s usually an atmosphere of grace and class. To dine in such restaurants, customers have to book beforehand.

Also, there’s a dress code for customers in some of these restaurants.

Most such restaurants offer fine wine in their menu offerings. Also, only highly professional and experienced chefs are employed.

Of course, you’d expect nothing less than an expensive menu. This category of restaurants is considered exclusive.

That is, only for people within a particular class.

v. Casual Dining Restaurants

These are family-friendly restaurants. Also, there’s a more decadent menu offering. Here, you’d find servers taking orders. You also get the option of choosing a highly specialized menu.

This restaurant category is cheaper when compared to, say, fine dining restaurants.

vi. An Increasing Adoption of Technology

This trend is quite visible within the restaurant industry. Despite its spread, there are no signs of slowing down. But two significant areas are spearheading this growth.

These include mobile apps and devices and the Internet of Things IoT. You only need to observe to see the vast transformations within the industry.

You only need to download an app and register to make an order today. Your order can then be placed with ease.

Another transformation is that of tracking as well as payment. As technology improves, so will its adoption. This trend will only grow stronger with time.

vii. Steady Growth

Restaurants have become a part of our everyday lives. This translates to steady growth. This is in addition to enhanced service delivery.

Therefore, the future of this type of business can be said to be bright. So also are its inherent opportunities.


Restaurants represent a primary industry across the world. We have identified this as the food services industry.

There’s so much earning potential too! So, if you’re thinking of investing, why not take advantage of these? You can decide to start from scratch or buy an existing franchise.

Whatever the case, the potentials are massive! We hope you found this piece informative as well as revealing.

1 thought on “What Type of Business is a Restaurant?”

  1. I would like to start up a Restaurant but first I would like to deal with fritters,beef, vegetable and chicken samoosas. …help me out with a business plan

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