How to Pick the Right Type of Restaurant and Create A Killer USP

How to Pick the Right Type of Restaurant and Create A Killer USP
Laurie Mega

By Laurie Mega

Every restaurateur starts out with the same basic ambition: To serve great food that satisfies customers, earns their loyalty, and makes their business a success.

But there’s so much you can do with that, and so many avenues to explore. It’s easy to get lost in all the possibilities.

There are three questions you need to ask yourself to form a more concrete plan:

  1. What type of restaurant will it be?
  2. What is my restaurant concept?
  3. What is my unique selling proposition (USP)?

If you can hone in on a solid concept, an appropriate restaurant type, and a killer USP, you have a really good chance of opening and maintaining a successful business.

Here’s how to get started answering those questions.

Once you have your restaurant concept it's time to start executing your restaurant's business plan and preparing for the actual construction of the restaurant.  For more information read How to Start a Restaurant: Your 13 Ingredient Recipe

What Are the Four Basic Types of Restaurants?

When we talk about types of restaurants, we’re talking about the physical structure, the means through which food is served, and the kind of staff and equipment you need.

What we’re not talking about is your restaurant’s concept. We’ll get to that in a minute.

There are many types of restaurants, but for this post we’re just going to cover the biggest ones. CPA, restaurateur, and author Roger Fields lays out the four main types of restaurants in his critically-acclaimed book Restaurant Success by the Numbers.

1. Fast Food Without Table Service

Think of your neighborhood McDonald’s or the restaurants in the food court at the mall. There’s no wait staff and no host to seat you. The menu is usually located above the counter, where someone takes your order and your money. Then you find a seat and wait for your number to be called.

Patrons of fast food restaurants don’t expect fancy or unique dishes. Instead, they want a quick, inexpensive meal that they can eat on the road or during a quick shopping trip.

These kinds of restaurants rely on pre-made food that can be heated up and assembled quickly. They may even have customers to pour their own drinks and get their own condiments.

According to Fields, fast food restaurants are furnished with hard, plastic chairs and tables that are easy to clean and encourage high turnover.

2. Takeout and Delivery

Takeout and delivery places have the smallest space requirements, when it comes to the front of the house. If they have any seating at all, it’s usually a counter against the window or a small table or two in the corner.

Takeout and delivery places are meant for people who are taking their food elsewhere, like home on their way from work, or having food delivered to avoid the time and hassle of cooking.

Virtual, or 'ghost restaurants' are a new phenomenon in this space, these concepts take takeout and delivery to the next level. This type of restaurant may have no public space at all, or may operate as a separate concept out of an already existing restaurant.

Customers order through an app and the food is prepared in a commissary or restaurant kitchen. Then, it’s delivered to the customer.

The rise of third-party delivery apps like Uber Eats, Doordash, and Grubhub have fostered this market in two ways. First, an existing restaurant can branch out and offer a whole new food concept through a virtual restaurant, using the kitchen they already have.

Alternatively, any entrepreneur with an idea and some resources can start one up from scratch, using a commissary to cook and assemble orders and either a third-party app or their own delivery staff to get the food out.

3. Food Trucks

The modern food truck came on the restaurant scene around 2011 in L.A.¹ One of its first stars was Roy Choi, who founded Kogi Korean Barbecue in a beat-up truck he converted into a mobile kitchen.

In the eight years since, they have exploded in popularity, thanks to publicity from major social media influencers and entire shows dedicated to them on channels like The Food Network.

Food trucks are now found in nearly every major U.S. city, and a lot of smaller ones, too. The food truck industry is projected to be worth almost $1 billion by next year.²

There are three things that make food trucks so attractive to customers: affordable food, quick service, and convenience. Just like a takeout and delivery or a fast-food establishment, food is prepped ahead of time and assembled to order for the customer.

Menu items are usually affordable, targeted toward the average office worker on break for lunch, or the weekend daytripper looking for something to eat.

But what makes food trucks unique is their food. They offer more than your average burger or pizza. They also change location from day to day. That means one day you could hit up the gourmet soup truck and the next day see what the vegan stir fry truck has for lunch.

Food trucks are a great way to start small in the restaurant business, especially if you’re planning to serve food that’s easy to make and transport.

Many brick-and-mortar restaurants also use food trucks to expand their reach and brand beyond their neighborhood.

Pro Tip: Because you’re already mobile, you can also offer catering services. Food trucks are even becoming popular features at outdoor weddings and other events.

4. Table Service À La Carte

When you think of a restaurant, this is probably what you picture. Any restaurant that takes orders at the table, gives those orders to the kitchen, and then provides meal service to their patrons is a table service à la carte establishment. This restaurant type includes upscale fine dining bistros and the local greasy spoon.

These restaurants are the most versatile when it comes to the kinds of concepts and types of food they can serve. Because patrons expect to come in, sit down, and spend some time with their meal, they also have more flexibility with food preparation.

In fact, in a lot of cases, your patrons will expect the food to take longer to prepare, and they’ll expect it to be of higher quality. They’ll also expect to spend more than in a takeout or fast food restaurant.

You’ll notice we hinted at the kinds of food that work best for each type of restaurant. And Fields agrees that the type of restaurant you choose is very closely related to the kind of food you plan on serving.

Imagine you have a nice large space perfect for a table service establishment, but your menu lists Chinese food. When you open, your patrons are going to expect higher quality food than you would get in your average takeout place.

Conversely, if you have a food truck, delicate European desserts that require time and careful plating are probably not practical, unless you’ve found a way to prep them ahead of time and serve them quickly.

This is where your concept comes in. Your restaurant concept will help you pull your food and restaurant type together into a concrete business plan.

Restaurant Types and Restaurant Concepts

Your restaurant type and your concept are very much entwined, but there is a difference.

When you decided to open a restaurant, you probably had an idea of the kind of food you would serve and the atmosphere or theme of your restaurant. Maybe your neighborhood badly needs a café where locals can linger over a morning coffee and a scone. Or maybe it’s sorely in need of a good takeout place that’s open late. Or maybe you just want to share your grandmother’s famous soups and stews with the world.  

These are all basic concepts you can use as a framework to begin to build your business.

A restaurant’s concept is the image it projects, the way you present it and the way the public perceives it.

Roger Fields cautions:

Until you have a basic concept, it will be difficult to answer crucial questions about your space, equipment, and staffing needs. This initial concept will also help you conduct meaningful market research so you can identify a workable location, prepare a realistic financial feasibility study, and work through your business plan to see if it makes financial sense.

Once you have a concept fleshed out, you can choose the kind of establishment that will best suit you. If you’re opening that café, you might have a table-service-style restaurant, or you may want to set up more like a fast casual restaurant, where customers order and pick up pre-made baked goods, light sandwiches, and coffee from the counter and then find a seat.

If you want that late-night takeout place, it’s pretty obvious what you’ll choose: the takeout and delivery model with very few, if any, seats.

Finally there’s Grandma’s soup. You may decide a fast-food model in a brick-and-mortar store might work best. Perhaps the soups are set out buffet-style, and patrons help themselves. Or you could set up a take-out-and-delivery (even a virtual) restaurant, since soup is easy to make in batches.

Or, if you truly want to get mobile, you could open a soup truck that roams the streets of your city in search of hungry crowds.

Pro Tip: There are lots of apps that let customers follow their favorite food trucks — Diamond Plate, Street Food Finder and WTF?! Where’s the Food Truck are just a few. Once you have a following, you can let people know where you are on any given day with one of these apps.

Getting your restaurant type and concept sorted will help you define your unique selling proposition (USP). According to Fields, “Put simply, your USP will set your restaurant apart from your competitors.”

Your USP is the differentiator that makes you special, whether that is service, your unique menu items, your low prices, or your funky decor and ambiance.

Whatever it is, it’s something customers don’t get with any other restaurant in your service area. It’s the thing that makes them keep coming back.

What's the Best USP for A Restaurant?

When someone mentions a restaurant by name, you probably respond with something like “That’s the place that does steak right” or “That’s the one with the relaxed atmosphere.”

Those are both USPs. They are part of each restaurant’s concept and the traits that stick in customers’ minds.

So how do you find the USP that will attract patrons and turn them into repeat customers?

Here are 5 questions you need to answer to find the best USP for your restaurant.

1. Are You Homogeneous or Differentiated?

A homogeneous restaurant is one that offers food or services that are similar to other restaurants, for instance, if you’re one of many pizza delivery places. In the case of a homogeneous menu or concept, there are only a few levers you can pull to create a strong USP: mainly price.

A differentiated restaurant is one that offers food or services that is unique to the competition.

Fields points out:

A product that customers perceive to have the greatest difference will develop the greatest demand and the most loyal customer base. Research also shows that customers seeking differentiated products — destination restaurants, for example — are often prepared to travel longer distances, and, in some instances, pay more to get them.

Think about those must-go-to places in every American city, like Katz’s Deli in New York or Cheers in Boston. They stand out for their notoriety, a differentiator that people find fun or enticing.

Further, Fields warns:

In the restaurant business, the more homogeneous the concept — burger joints and pizzerias, for example — the more resistant the menu items are to price increases. Fine dining or upscale restaurants, however, can charge more because customers differentiate their products by identity, not by price.

Be careful in what you define as your USP. There are some popular differentiators that seem like they’ll make you stand out, when really they turn you into a homogeneous establishment.

The farm-to-table movement is a good example. A trend that began about 30 years ago has grown rapidly in the last 10 years.³ And while restaurants that source their food locally are very popular, a crowded market could mean the downfall for a newcomer.

2. Who Is Your Audience?

Once you know what you are, you need to do some deep research into understanding who your audience is.

You probably had to analyze your audience with market research for your restaurant business plan, but now it’s time to do a really deep dive.

How old are they? What do they spend their money on? What causes do they believe in? Do they have kids?

All of these questions can help you create a USP that attracts and keeps the right customers.

3. Does Your Concept Have Broad Market Appeal?

Once you know who your audience is, you should have a good idea whether your concept will appeal to them. First of all, you should be serving food you know they will like. And you should be serving it in a way that works for your community.

Let’s go back to our café. If yours is a community of young professionals, you may find they appreciate a café with free Wifi, so they can plug in while they have their coffee. If no other café in your area has free Wifi, that becomes part of your USP.

4. How Easy Is It to Duplicate the Concept?

In other words, what makes you special? Do those soup recipes from Grandma’s kitchen have  a secret ingredient no other restaurant can pin down? Do you have a novel approach to staff training that gives them an edge on customer service? Or maybe you have a chef with a loyal following.

Whatever it is, there should be something about your restaurant that’s hard to compete with, something other places will have a hard time replicating to take away your business.

5. Can You Follow Through on Your USP?

The final piece of the puzzle is follow-through. You may have to tweak your USP here and there to adjust for customer feedback, but it should mainly remain consistent.

Restaurants that promise one thing and deliver another, or change their concept as they go don’t often last very long.

Know Your Restaurant Type and Your USP

When you’re starting a restaurant, there are so many options to choose from. You can feel like a kid in a candy store, overwhelmed by the possibilities and not sure where to begin.

Remember to answer these three crucial questions first to focus your ideas and your resources:

  1. What type of restaurant will it be?
  2. What is my restaurant concept?
  3. What is my unique selling proposition (USP)?

And creating that killer USP in the perfect restaurant space will help you hit your restaurant idea out of the park.


Sources:

  1. How America Became a Food Truck Nation
  2. Value of the U.S. food truck industry from 2014 to 2020 (in million U.S. dollars)
  3. Local Food Trends for Restaurants: The Farm to Table Movement

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Laurie Mega
Laurie Mega

Laurie is a writer with family in the restaurant industry. She lives near Boston with her husband and two boys and has been published in HomeandGarden.com, The Economist, and more.