We usually eat here every time we go to Highlands, and it's always excellent, and has been for years. It was probably the first "good" restaurant in the area and has remained so.
There are a few newer, flashier in-town restaurants, and yes we like the food at Wolfgang's and Madison's and Paoletti's, and Canyon Kitchen, but On the Veranda is right up there and offers the full package whereas a couple of those others don't (think pretentious). I'm not sure it's #1 in Highlands as it's currently ranked, but it's certainly in the top few.
We also enjoy the servers as they're usually locals and often students at nearby WNC and can give you insight as to what it's like to live where others can only vacation.
It's fairly relaxed, no pretense, jeans are probably just fine, but you won't be uncomfortable if the occasion calls for taking it up a notch.
And by the way, a seat on the veranda gives you one of the only lake view tables in Highlands, but don't forget your sweater.
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