The restaurant industry is the most popular and highly profitable business. It is a place where food is prepared and served to people and it works round the clock. There are different types of the restaurants ranging from the simple dining places to the expensive and spacious restaurant, where you can enjoy with your friends and family. The simple restaurant is best for single people or for the tourists, who look for the food at the reasonable price. The restaurants have different menus and they charge from the clients according to their menu. The system of the restaurant is different from country to country as the eating habits of the people are changed. The change of the products and recipes of the food can bring change in the pricing of the foods. Now various fast food restaurants are also developed, where people come to enjoy with their family.

Political Factors

The political factors have great impact on the restaurant industry as the government wants to have influence over the business and they announces various regulations from time to time taking care of the health of the people. They need to check the standard of cleanliness in the restaurants and following the rules like tax rates and the following of labor laws (Wendel Clark, 2012).

The government wants to check the quality of the food and ingredients, which are used in preparation of food as the cholesterol can affect health of people and they can become suffer from obesity and other stomach issues. Most of the restaurants do not take care of their kitchen, where they cook food and wash the dishes. The food preservation is also necessary by keeping the place clean and tidy (Rodrigo, 2012).

The government imposes some employment laws for safety of rights of employees, and environmental regulations to adhere with the environmental policy and follow the trade restrictions along with tariffs and political stability to maintain the standard of food (UK Essays, 2015).

Economical Factors

The government fiscal policies can affect the business of this industry. If they impose taxes on the consumer items, then restaurants will have to enhance the rate of the food items. The change in the inflation rates can also affect the business as the prices of the ingredients can be increased and resultantly, the restaurants will have to increase the rate of their food items, which can minimize their margin of profit (Rodrigo, 2012).

When the economic changes are happened in other countries, it can have bad impact on the restaurants, which have outlets in various countries. The slow and stable growth in the economy of the country and risky economic markets can be great threat for this industry. If the economy of any country is strong then this industry can flourish there quite rapidly. The business of the multinational food restaurant chain is becoming strong in Europe because the economic situation is now becoming stable there (Roberta Greenspan, 2015).

Social Factors

In the social sector, people are now becoming educated and they are now health conscious about the food products. They look for quality food and the population growth rate is the major factor of this business as with the increase in population, the number of restaurants is also increased. Now people are becoming aware of the food products and they also check the food products, which are used to prepare the food (UK Essays, 2015).

In the health conscious market, the restaurants offer healthy foods to the people but where people look of high fat food, the restaurants prepare food according to their choice. In certain cities, people like to dine out and there is huge number of restaurants but in some areas, people like to stay at home and prepare their food in their kitchens (Wendel Clark, 2012).

Technological Factors

Various popular restaurants use the television and IT technology for their publicity. The TV channel is costly so they develop their website and give the detail of their food products and mention their specialty, if any, to grab the attention of their customers. You can check their list of food products online and get information about the availability of the food. They also improve their inventory system to keep update the clients. Some food chain use mobile phone by sharing SMS about their popular food chain and also offer some incentives to their clients (Rodrigo, 2012).

Some leading restaurant chains carry out research and development activities and business automation is also increased. Some food chains and restaurants start the mobile delivery of the food products to the clients at their doorstep, which is now increasing and it getting more profit. The customers can give online order to the food chain or make a call or simply send a SMS and the restaurant staff will provide the ordered products to your home in short time (Roberta Greenspan, 2015).

Environmental Factors

There are some ecological external factors, which are implied on the consumers of the food companies and they have to refer to the environmental issues. The governments have made various rules and regulations to keep the food healthy and nutritious for the health of the people. They have to check the rising rates for corporate environment programs and adopt the sustainable strategies to grow the business. The climate change is also big issue for the restaurant industry (Roberta Greenspan, 2015).

The environmental issues are now growing severe and it is great concern for the atmosphere. All of the businesses are more or less contribution in the environmental problems and businessmen should aware of these environmental threat and try to avoid them by following the government policies regarding protection of the environment (UK Essays, 2015).

Legal Factors

There are various government agencies, which are working for the regular supply and quality of the food products. They have implemented some specific rules and regulations to control the supply and provision of food products in the market. The restaurants have to face the regulations not only about food but also wages and welfare of their employees. They have to follow all these rules so that they can create the lawful atmosphere in the specific area. They have to keep the quality of their food high, which can be healthful for the people and take care of the welfare of their employees. 


Roberta Greenspan (2015), McDonald’s PESTEL/PESTLE Analysis & Recommendations, available at

UK Essays (2015), PESTEL Analysis of McDonalds and the food industry, available at

Rodrigo (2012), Strategic Analysis (SWOT, PESTEL, Five Forces) of McDonalds, available at

Wendel Clark (2012), Restaurant Pest Analysis, available at

UK Essays (2015), SWOT and PESTEL Analysis of a Seafood Restaurant, available at

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