Hello @maggieRay

If you want to open your own restaurant it would best to start a small one so that the initial cost will be less since the size of the actual restaurant and everything that goes along with it is smaller compared to starting up a big one.
Another advantage is that many operational things will be simpler since you will plan things on smaller sale. One disadvantage though that you should be aware of it that it will be a little difficult to make money in a small restaurant. Many people like to eat where there are many people eating and people will be turned off because people would think that small establishment is not so popular.
When deciding to open up a restaurant, you have to consider a lot of things and there are advantages and disadvantages in a small or large restaurant. One thing for sure, running a restaurant whether it is a big one or small is never easy. It is important that you have to focus on its operation no matter how big or small the restaurant is.

Source:
http://ezinearticles.com/?Starting-A-Small-Restaurant---Where-Do-I-Begin?&id=899303

This really depends on what your future goals are for the restaurant itself. One of the biggest factors of deciding how big you want your space to be is how many employees you can afford. While more employees ensure more work in less time, they also require heaps of money and managing skills. This can often turn out with the owner devoting their lives to the business while making the same amount of personal money they would if it was a smaller operation. Many people who open a restaurant aim to make as much money as possible, while this seems ideal the stress involved can be immense. A common mistake is thinking that the larger the restaurant is, the more money the owner will be making. Ultimately you will be allowing yourself to pay more people, which is good for your community, but will not see much more gain for you personally.

Another huge factor is how long you can afford to stay afloat without turning a profit, more space means more food and more employees. This in turn means a lot more time before you turn a profit. Also a larger space can mean more waste, having to send employees home if there is no work, and a significantly increased amount of over head. With a small restaurant, keeping these things to a minimum will be easier and will make success seem like a more possible goal.

From my experience working with new and established restaurant owners I would say the stress and devotion required for a larger operation is not worth the benefits. For an individuals first restaurant I would almost always say start small. You said "starting small could mean reworking the facility and more sunk costs later", but really this is a good thing. If your business is doing well enough for you to have to expand or re work your restaurant, you could instead leave the company as is and work on a new larger restaurant. As with any area of life, once you have completed something on a small scale, it will seem much easier once you try it a second time a bit larger.

With all this said there is still much more to consider when starting a restaurant, as I'm sure you are aware of by now. While a lot of restaurants fail in the first few years, if you have a solid plan and quality food, you will ensure a healthy living off your business.

http://www.youtube.com/watch?v=_-VNshDyoY4&feature=channel