The company is backed by Belgravia Group, an $80-million business built by former Elders IXL and Foster's Brewing Group board member Geoffrey Lord.

The council's decision at last Tuesday night's meeting was in line with a council officer's recommendation despite a panel finding Belgravia lacking "warmth and passion" for the Hepburn Springs business.

"Belgravia did say (an) `internal and external network of personnel and their associated hospitality knowledge ensures our understanding of the restaurant industry is more than appropriate'," the panel reported.

At the council meeting, Cr Heather Mutimer said she was concerned the Pavilion Cafe Kiosk could become "a cloned business" under Belgravia Health and Leisure Group.

The panel, consisting of former shire corporate services director Chris Cowley, shire resource officer Richard Pekin and Keira Lockyer, listed as a "food/restaurant expert", said it was impressed by the "strength of passion, drive, commitment and vision" of Mitchel Watson and Brylie Rankine trading as Daylesford & Hepburn Mineral Springs Company.

"As a two-person team, one an experienced chef and the other an experienced front-of-house management, the panel considered this, along with the commitment and local knowledge, advantageous."

Mr Watson said it was unfortunate a local business had been unable to secure the tender.

Belgravia Health and Leisure Group was not available for comment.