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Starting a Coffee Shop – Licenses, Permits & Insurance

Do you want to know the legal requirements you need to start a coffee shop? If YES, here is a checklist of coffee shop licenses, permits & insurance.

Having provided you with a:

  1. Coffee Shop Industry Overview
  2. Market Research and Feasibility
  3. Coffee Shop Business Plan
  4. Coffee Shop Marketing Plan
  5. Coffee Shop Name ideas
  6. Coffee Shop Licenses and Permits
  7. Cost of Starting a Coffee Shop
  8. Coffee Shop Marketing ideas

We will consider what it takes to get operating license and permit for your coffee shop business including insurance coverage and intellectual property protection.

Starting a Coffee Shop – Licenses, Permits & Insurance

  • The Best Legal Entity to Use for a Coffee Shop

It depends on what you want and the type of business model that you intend building; you have the options of either choosing a limited liability company which is commonly called an LLC, or a sole proprietorship. Ordinarily, sole proprietorship should have been the ideal business structure for a coffee shop business especially if just starting out with a moderate capital. But people prefer limited liability Company for obvious reasons.

As a matter of fact, if your intention is to open several outlets of your coffee shop in the different cities and to sell franchise, then choosing sole proprietor is not an option.

For example, setting up an LLC protects you from personal liability. If a customer that patronized your coffee shop suffers an allergy attack from your coffee, his lawyers can’t go after your property or properties. It is only the money that you invested into the limited liability company that will be at risk.

It is not so for sole proprietorships and partnerships. Limited liability companies are simpler and more flexible to operate and you don’t need a board of directors, shareholder meetings and other managerial formalities.

Is Professional Certification to Run a Coffee Shop?

From a general perspective, you might not have need for professional certification before you can be allowed to operate your own coffee shop business in the United States of America, Canada, and Australia and even in Europe. But you would need to get clearance from local health authority and foods and drugs agencies before you can be allowed to open and operate a coffee house.

This is so because the coffee house business is considered as a delicate business; it involves foods and drinks. You will also need a kitchen clearance certificate, food handler certificate and perhaps other relevant certification as it applies to your country or even your state.

List of Legal Documents You Need to Run a Coffee Shop

The legal requirements for a coffee house business may vary slightly from country to country, states to states and even from cities to cities. So it is important to contact your local authority to know the legal requirements that you would need in order to successfully open your own coffee shop business in your country without stress.

These are some of the basic legal requirements needed before you can successfully start and run your own coffee shop business;

  • Business and liability insurance
  • Foods and drinks handler certificate
  • Health inspection Certificate
  • Proof of district-issued food and drinks manager identification card
  • Food purchase record storage and record keeping (If you are also involved in the sale of snacks)
  • Depot, commissary or service support facility meets vending unit operation needs
  • Copy of license for the service support facility and/or a recent inspection report
  • Tax Payer’s ID
  • Fire certificate
  • Kitchen insurance
  • Certificate of Incorporation
  • Business License
  • Business Plan
  • Non – disclosure Agreement
  • Employment Agreement (offer letters)
  • Employee’s Handbook
  • Operating Agreement for LLCs
  • Building License
  • Liquor License (optional)
  • Cabaret License
  • Music License
  • Franchise or Trademark License

The Best Insurance Needed for a Coffee Shop Business

When it comes to starting a coffee shop business there are key insurance policies that you must have in place same applies to any other industry you intend starting a business. It is important to note that you can’t be permitted to run a coffee shop business in the United States, in Canada, Australia and in Europe if you don’t have the basic insurance cover for your business; the food and drinks industry is a delicate business hence the need for the industry to be highly regulated.

These are some of the basic insurance cover that you should consider purchasing if you want to start your own coffee shop business in the United States of America and also in most parts of the world;

  • General insurance
  • Health insurance
  • Liability insurance
  • Kitchen Insurance
  • Workers compensation
  • Overhead expense disability insurance
  • Business owner’s policy group insurance

Intellectual Property Protection and Trademark for a Coffee Shop

If you are running a franchise / chains of coffee shops model, it is compulsory that you file for intellectual property protection. It will become handy and very useful as your coffee house brand begins to expand far beyond your reach.

The truth is that even if you are starting your own coffee shop business from the scratch, you would still need to secure your brand name from an intellectual property clearinghouse. It is quite challenging to build your coffee shop brand from the very scratch, and then watch the brand name slip off your hands. Even if you intend buying a coffee house franchise, you would still need to contract the trademarks and service marks from the franchising company.

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