What Type of Business is a Restaurant?

What type of business niche is a restaurant? The restaurant industry is huge! 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 category of business 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 foodservice 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 foodservice industry, you’d find so many types of services on offer.
These include fast food or quick service, casual dining restaurants, fast-casual restaurants as well as fine dining restaurants. Intangible services 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 of the above-mentioned (that is tangible and intangible) services are combined. This seeks to offer clients total satisfaction as well as value for money spent.

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

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Food Service Industry

The foodservice 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) which began in 18th century France has today become so popular across the world.

So, what other businesses are subsumed under the foodservice industry? They include pubs, ice cream shops, and bars among others. There are also major players within this industry. Without their input, there would be little progress.

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

  • Trends Within the Food Service Industry

The restaurant or foodservice 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 much 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 cost, there has been a steady boom in the last decade.

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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 largely responsible for food customization. There’s also the case for quality.

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 of 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 certain class.

v. Casual Dining Restaurants

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

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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 2 major areas are spearheading this growth.

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

To make an order today, you only need to download an app and register. 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 major 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. Winfridah Chembe

    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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