You’re looking to open the perfect little corner of the world where people can gather and enjoy your delicious cuisine. Though you may have a concept in mind, you should consider another big choice: what restaurant type you should open. According to a 2022 survey by Statista, 62% of respondents in the United States voted casual dining as their preferred choice. Although casual dining is the most popular, does that mean it’s the right choice for your business?
Below, we’ll take a look at three major restaurant types: quick service, casual dining, and fast casual. We’ll also highlight some top performers in the industry to learn what keeps their diners coming back for more.
What are the Restaurant Types?
1. Quick Service for the Speed Queens and Kings
Let’s dive in with the restaurant type we know the best: Quick Service Restaurants (QSRs), or “fast food.” Most of us have paid a visit or two to our local McDonald’s, Sonic, or Taco Bell in the last few months. 37% of Americans (or 50 million people) consume fast food every day, according to Zippia. QSRs prioritize speed and convenience. They typically have limited menus, standardized recipes, and minimal table service; this allows for high-volume sales and low wait times. The target audience is usually busy individuals and families on the go. QSRs are ideal for those seeking a quick and budget-friendly meal.
Why Open a QSR?
The pros of opening a QSR include low overhead costs, high profit margins due to high volume, and easier operation with a standardized model. According to a report by the National Restaurant Association, the average profit margin for fast food restaurants is around 5-8%. This means that for every dollar of sales, the restaurant earns 5-8 cents in profit. Some fast food chains, however, have profit margins as high as 20%. There are some downsides to consider — a limited menu means less creativity, and there’s a potential for lower customer loyalty due to a focus on speed over experience.
2. Casual Dining: A Familiar Comfort
Casual dining restaurants offer a happy medium between fine dining and fast food. Most enjoy the full service aspect of casual dining without having to pay the higher premiums of more upscale establishments. Olive Garden, Chili’s, or your favorite local mom-and-pop restaurant may come to mind when thinking of casual dining. The focus of casual dining is to offer a wide variety of dishes in a relaxed, comfortable setting. These restaurants cater to families, groups, and individuals seeking a familiar and enjoyable dining experience. With greater labor costs, full service restaurants can fall into the 3-5% profit margin range, depending on restaurant size, menu item prices, turnover rates, and location, according to Restaurant365.
Why Open a Casual Dining Restaurant?
Flexibility in menu design, ability to cater to different dietary needs, and potential to build customer loyalty may be reason enough to settle on a casual dining restaurant type. While there are other aspects to consider — such as higher overhead costs due to larger staff requirements and potentially lower profit margins compared to QSRs — casual dining is still preferred by most diners to date. According to Statista, 50% of consumers are currently trying to eat more wholesomely. This same data also points out that 46% of those consumers find price as a block in their desire to live a healthier lifestyle. Casual dining offers diners healthier options at similar speed to fast food service.
3. Fast Casual: Where Speed Meets Satisfaction
Fast casual restaurants combine the convenience of fast food with the quality and customization of casual dining. They allow customers to personalize their meals with a focus on fresh, made-to-order ingredients served in a fast-paced yet comfortable environment. Most fast casual establishments are counter or limited service, so the ability to meet demand with speed is still achievable. Chipotle is a great example, as they use ingredients that are fresh but still obtainable for on-the-go diners. From 2022 to 2026, the fast-casual restaurant market in the US will grow from $186.27 billion (about $570 per person) at a compound annual growth rate (CAGR) of 12.41%, according to a report from Technavio.
Why Open a Fast Casual Restaurant?
Fast casual restaurants are a great balance between speed and quality, allowing for higher menu prices than QSRs. The focus on customization can also attract a broader customer base. On the other hand, fast casual restaurants are more complex to operate than QSRs due to the need of menu customization and potentially higher labor costs.
Choosing Your Path
There’s no one-size-fits-all answer when it comes to choosing the restaurant type that fits your business. Additional things to consider are your:
- Culinary Passion: What kind of food do you love to create?
- Target Market: Who do you want to serve?
- Budget: How much capital can you invest?
- Operational Expertise: Are you more comfortable with a high-volume, fast-paced environment or a service-oriented approach?
By understanding these different restaurant types and their unique characteristics, you can choose the path that best aligns with your vision and sets you up for success in the exciting yet competitive restaurant world. When you’re ready, HungerRush will be here to set you down the path of success with our all-in-one point of sale system. Click here to learn more!