Developer Redstart had applied for planning permission to build a new eatery on the western edge of Market Drayton, adjacent to the Tern Valley Business Park.
It was due to be discussed at a meeting of Shropshire Council's planning committee this week, but ahead of the meeting the developer confirmed that it would withdraw the application.
A number of residents had written to the council to object to the plans on the grounds of noise, traffic and litter concerns, and council officers had recommended the application be turned down.
But the application was cancelled before councillors had the opportunity to discuss it.
After the developers withdrew their application, Shropshire Council planning services manager Ian Kilby confirmed: "We acknowledge your communication advising that the above application is being withdrawn. No determination will now be made in respect of this application."