The purpose of this study is to examine the correlation between differentiation strategy of customer’s satisfaction and the effects on performance in family restaurants. Above all, looking into a device to take an internal competitive domination factor of family restaurants is the core purpose of this study. To achieve the purpose, a survey was conducted to 278 customers of family restaurants in Seoul. The result of this survey is as follows. First, the interior of family restaurants and responsibility of their employees had an effect on customer’s satisfaction. Secondly, menu/atmosphere satisfaction and employee’s appearance influenced quality performance of restaurants. In searching information on restaurants, reference group and visiting experience were highly recommended, leading to the importance of word of mouth.