Sales Determinants of Restaurant Chain Business: Focused on Family Restaurants in Korea

Food service industry is one of the most promising business fields in Korea. The ups and downs of their sales often depend on location traits and operation strategies resulting in business failure. Therefore, clear understanding of sales variances in restaurant chain business will enable not only marketers and practitioners to understand their markets, but customers and business owners to meet their needs. Moreover, the precise operational strategies are essential to secure their business success. Due to the absence of related academic literature and empirical findings in Korea, this paper has its own contribution, in that determining factors of sales are analyzed based on location, store, and operational strategies. We analyzed 310 stores data from VIPS, Outback Steak House, and Ashley, the three major family restaurant chains. The multiple regression analysis is implemented to investigate the effect of independent variables on sales. The empirical result shows that Location traits, Operation traits, Store traits have significant influence on family restaurant sales. When considering launching a new restaurant branch, an exclusive building type of family restaurants in provincial cities with premium and accessibility is highly recommended. Also, as for operation strategies, unlimited complimentary wine service, lactation room could be an effective way for their sales increase. Understanding of variances affecting sales in restaurant chain business will enable not only researchers and market practitioners to comprehend their markets and businesses but also business owners to meet their customers' needs.