Since we opened we have had a no-reservations policy. That changed to accepting reservations for parties of 6 or larger because we were getting our asses kicked by large groups. We have a huge dining room, tables spaced widely apart and since we encouraged people to just show up, they did but in groups of 12, 17, 22 and we just weren't prepared for them.
Things work pretty well this way although some get miffed we don't take reservations for deuces. From the diners perspective I understand why they want reservations, they want to know they're getting seated. From our perspective however, we wanted to be a locals friendly place where our year round residents aren't bumped out of the dining room in favor of out of towners. Also, reservations require confirmation and juggling of tables and because many diners don't keep their reservations (making multiple reservations at 4 or more restaurants and deciding at the last minute where to go) careful overbooking. We don't have the staff to deal with this and since our space is so large seating is rarely an issue. Yes, sometimes people have to wait but usually no more than they do in a busy place where they have reservations.
The downside of course is we never know how many people are going to show up. We've tracked our numbers every year and have system of averaging customer counts which is relatively accurate and we'll notice trends like for a few weeks being 15% over the average, etc. Then there are the mid-winter nights we expect to do 40 and 85 show up. As an old friend used to say "Honey, you've got high class problems now."
Believe me, I'd rather have more show up than less, but in the middle of it when you're wondering why everyone in town decided to show up on this particular night, it's not much fun. Still, it's more fun than sitting in a cubicle.