You can do

Route::get('location/category/subcategory/item', array('uses' => 'RestaurantController@example');

and for category

Route::get('location/category/subcategory', array('uses' => 'CategoryController@example');

Small correction on the previous comment:

Route::get('{location}/{category}/{subcategory}/{item}', function($location, $category, $subcategory, $item) {
    echo "Restaurant";
    var_dump($location, $category, $subcategory, $item);
});

Route::get('{location}/{category}/{subcategory}', function($location, $category, $subcategory) {
    echo "Category";
    var_dump($location, $category, $subcategory);
});

will give you something a bit more dynamic.

Thanks for that, I really appreciate the help. I was concerned that

{location}/{category}/{subcategory}/{item}

contains

{location}/{category}/{subcategory}

but the routes obviously have to match exactly.