The primary objective of this study was to empirically determine the relationship between restaurant images and loyalties toward seven competing casual dinner house restaurant chains, and to understand the nature of their competition by matching patronage behavior toward alternative restaurant chains with perceptions of alternative restaurants) on particular image attributes.

The canonical correlation analysis revealed that the measures of image had significant impact on both loyalty measures toward selected casual dinner house restaurant chains: (1) patronage intentions and (2) proportions of patronage. Furthermore, the interpretation of the canonical functions revealed the nature of competition in terms of market segments and positioning. The research findings of this study imply that the obtained restaurant image is not only an analytical device to diagnose the weaknesses and strengths possessed by each restaurant relative to other restaurants, but also a predictive tool for loyalty patterns toward alternative restaurants.

This study contributes to the existing consumer patronage behavior literature by providing empirical research results for the interrelationships between multi-store image measures and multi-store loyalty measures. Further, this research illustrates the usefulness of canonical analysis, which is a powerful technique for exploring the relationships between one set of variables and a second set of variables. Lastly, this study is of empirical value to restaurant management. In terms of offering strategic guidelines, this study shows the magnitude of the relationships and explains the nature of competition in a local market by linking consumer's loyalty behavior toward one or more restaurants with the image strengths/weaknesses of alternative restaurants on salient image dimensions. As a consequence, restaurants can use this information in their repositioning strategies to improve or change their image.