It is a combination of two words, Service and Quality where we find emphasis on the availability of quality services to the ultimate users. The six dimensions of physical environment on which this research is focusing are servicing staff, facility aesthetics, layout, ambience, dining equipment and lighting. For the majority of customers having a memorable experience especially for dining, not just eating out of home, seems to be very prominent. It is asserted that they seek quality food and services to have an unforgettable experience at restaurants. This study concludes that all the dimensions of service quality have significant relation with overall service quality and the overall service quality has strong association with customer satisfaction. Therefore, this study has also tested whether the customer satisfaction leads to customer loyalty or not. After analysis researcher found that there is a strong association between customer satisfaction and customer loyalty.
Key words: Restaurant industry, physical environment, price perception, customer loyalty, customer satisfaction
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