The lakeside restaurants in and around the harbour are the obvious choice in summer. Look for the smoked Vättern char (röding) or the smaller whitefish (sik), both local catches. A handful of cafes in the wooden town centre do good cinnamon buns and open sandwiches at lunchtime.
Beyond the central blocks, options are limited — Hjo is small. For more variety, drive to Skövde or to Jönköping.