The purpose of this study was to understand the interrelationships between customers' perception of service encounter elements, customers' emotional response and customer satisfaction in a family restaurant. Based on a total of 408 samples, this study reviewed the reliability and fitness of the research model and verified a total of 4 hypotheses using the Amos program. The hypothesized relationships of the model were tested simultaneously using a structural equation model (SEM). The proposed model provided an adequate fit to the data, χ2=821.151 (df=333), CMIN/df 2.466, GFI .878, NFI .927, IFI .955, TLI .949, CFI .955, RMSEA .060. The results showed that human factor (β=.426) and physical factor (β=.266) as service encounter elements in family restaurants were indicated to have a positive (+) influence on customers' positive emotion. For influence of customers' negative emotion, human factor (β=-.157) was surveyed to have a negative (-) influence. Also, customers' positive emotion (β=.716) and negative emotion (β=-.081) had significant effects on customer satisfaction. Limitations and future research directions are also discussed.