At the time of globalization,when demand for healthy and quality foods is increasing in China,more foreign individuals decide to invest in the f&b industry in China.The shortage of domestic supply due to urbanization,arable soil erosion,and pollution make the demand higher than the domestic supply.Besides,the increase of the middle-class population and recent food safety issues make Chinese netizens think about overseas food options.Foreign individuals see this problem as a golden opportunity to establish small to medium-sized restaurants in China.In theory,they might just be the solution to the food supply in China because they offer a tasty and healthy range of items in their menus at an affordable price.However,it is much tricky in practice because of variables that were not considered or thought insignificant by foreign investors.Thus more than 65% percent or individuals who started restaurants in China close in the next seven years.According to earlier literature,individual owners might just be failing to apply the universal business law,which is to sell what customers want and not what restaurants want.When foreign investors start a restaurant business,most of them provide the same products as in their home countries and use the same marketing strategy to promote themselves.They fail to understand that there are many other factors which locals consider beside quality.Locals think about food not only about nourishment,but about medicine,and they attach to it a robust and deep culture and philosophy.Additionally,according to where a restaurant has to be established,the tastes and food preferences change in China.Furthermore,the likelihood of success depends on whether it is a tier-one city or other-tiers.Moreover,on top of that,even if an investor understands all the problems cited above,he or she should remember,locals will always be the biggest group of customers and not the expatriate group.Thus,it is necessary to bring an “exotic” cuisine while giving importance to local customers’ perspective.In order to understand the current situation,an extensive literature review is done by the researcher.The literature review allows the author to construct a theoretical framework,build on his ideas,and generate new knowledge.Accordingly,most of the success factors and reality reviewed in the literature review are for big restaurant chains with few available information about small to medium-sized restaurants.Because they are not corporations,but owned by one or few individuals,thus there is not enough information on this category.Even this category of restaurants（small & medium-sized）does not have the adequate information about themselves,and they are obliged to assume success factors for big restaurant chains as valid for them.This might just be another mistake because the two different categories do not have the same experience,credibility,and capital.This research provides an empirical study of factors which make successful foreign small to middle-sized restaurants from local customers’ perspective.The purpose of the study is to help more foreign individuals invest in the f&b sector by providing up-to-date information about what local customers want,consumption behavior & opinions,and degree of C.E.Consequently,the theoretical framework sets the ground for two objectives in this research: first,many authors emphasized the importance of education,income,marketing strategy,and consumers’ opinions as success factors for F.O.R.Thus,the objective is to find whether these assumed success factors are valid and effective.Secondly,the other objective is whether local customers’ in Shanghai exhibit a low to non-existent C.E,which is a real threat to F.O.R.As the nature of the research is exploratory,the author elaborates a structured methodology to meet the research objectives.He chooses a deductive approach as he formulates theories first before collecting data.The research theories suggest success factors for big restaurant chains hold for smaller ones,and the level of C.E is shallow to non-existent in a tier-city like Shanghai.Thus the deductive approach is to collect data from local customers and confirm or reject the prior theories.The deductive research approach influences the author to choose a quantitative research design because they work well with each other.The quantitative design allows the researcher to collect data from local customers and use inferential statistics to find whether the theories hold.Additionally,he chooses a survey as a research strategy by formulating a questionnaire and collecting data from local F.O.R local customers.As the entire population,which represents the frequent customers for F.O.R is unknown,a snowball sampling technique is chosen.The snowball technique is a nonprobability technique which allows in this case to find representative individuals who would have been impossible to find otherwise,because there is no list of F.O.R local customers and where to find them.It involves finding a few selected respondents who are preferably different from each other and ask them to find others who also eat frequently at foreignowned restaurants.Besides,as the author is not Chinese,the snowball sampling technique allows the author to have more trust and credibility because respondents are recommended to him by other respondents.Thus,with the use of a mono-method design incorporating a survey questionnaire,data were collected from 92 respondents during three months.The researcher uses mainly IBM SPSS and wjx.cn（data modeling platform in China）to make inferential statistics.Success factors: income,education,marketing strategy,customers’ opinions,and C.E are coded in an ordinal and nominal measurement way.Therefore,the author used a Spearman correlation method（when possible）to look for any relationships between the variables cited above and consumption at F.O.R.The results provide support that income,marketing strategy,and customers’ opinions are correlated with food consumption in F.O.R,but except for education.Interview data indicate that respondents with higher incomes eat more frequently foreign foods;they also indicate the importance of F.O.R marketing strategy and how respondents are more willing to frequent F.O.R,who take into account their opinions and preferences.More precisely,opinions show a meat-based menu preference,with the majority of respondents preferring Japanese,Korean,and American who provide a broader range of meat products.On the contrary Middle-eastern,Indian,and other restaurants who offer a plant & cereal-based diet are not the favorite.Moreover,respondents describe how an online marketing strategy and a geographical location can be critical success factors for F.O.R.On the other hand,there is little to no evidence to conclude that the more educated local customers are,the more often they eat at F.O.R.The author also found evidence about an existing low C.E among respondents.Implying a certain number of local customers will reduce or stop going to foreign-owned restaurants if potential bad international politics are considered.However,it is not significant enough to be a threat to foreign-owned restaurants in Shanghai because the majority of local customers sampled do not exhibit C.E.This thesis has some practical implications and originality.The findings describe how F.O.R should adapt to the current business environment by looking at their customers’ perspective.Even though what F.O.R offers is generally healthy and of good quality,they should adapt to local customers’ preferences because they are the larger group from their total numbers of customers.At present,meat products are popular,with a focus on the overall experience while eating.Also,businesses are encouraged to prioritize an online marketing system via platforms such as E’lema,Meituan,Dianpin,which represent the most effective way to be known by locals.The findings also emphasize the advantages of establishing an f&b business in a tier-one city where people have more income and lower C.E.The present research was limited to a certain level because of the non-random sampling method used.While measuring the relationship between education and consumption at F.O.R,nothing was found.That is because “education” as a variable was not able to be controlled effectively and be diversified.Even though the author used a purposive sampling method after the snowball one,he could not diversify the “education” factor.The respondents brought other respondents with similar educational background.Additionally,the author was limited by resources,and because he is not Chinese,therefore he could not get respondents by himself with ease.The author recommends future research based on this thesis involving a more significant number of respondents in order to generalize the results more appropriately.