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The restaurant industry is dealing with diversity in terms of its workforce, international customers and multinational business operations. Acknowledging diversity through multicultural training is beginning to appear in some restaurant companies. This study investigates how franchised restaurants utilize multicultural training programs from a training cycle approach. The findings indicate that high employee turnover rates are the primary reason that the majority of companies do not have a cultural diversity training program. Companies with a diversity training program report that such training is successful in improving interpersonal cross‐cultural skills.

The purpose of this paper is to provide experimental evidence supporting the view that internal service quality has a direct effect on external service quality.

The study focuses on the restaurant industry in Greece. Waiters are considered as internal customers and kitchen personnel as internal suppliers. Inferential analysis included factor analysis on individual waiter and customer data as well as canonical correlation analysis on a restaurant level.

Factor analysis of external service quality revealed six factors including product, organizational image, safety and choice, empathy, reliability as well as responsiveness. Internal service quality factors, additional to those found in external service quality research, included professionalism and internet. Canonical correlation revealed that the internal service quality dimensions of safety, reliability and internet exert a direct positive influence on the external service quality dimensions of organizational image, empathy and responsiveness.

The paper shows that service firms should focus on internal service quality in order to improve external service quality.