Are you about starting a restaurant business? If YES, here is the requirement plus a guide on how to get your restaurant license and health permit without stress.
Opening a new restaurant is no walk in the park due to the fact that the industry is highly regulated. New restaurants have to face the normal difficulties that new businesses face such as sourcing startup funds, location, staffing et al. But they also have to face additional hurdles such as complying with a web of local, state and federal regulations.
Getting all the licenses you need to ensure that your restaurant will take off smoothly takes time so it is advisable to start off as early as possible.
It’s equally important to work closely with a legal counsel who can help you get your restaurant permits step by step, particularly because a lawyer will be most familiar with the terrain. You will find out that it is easiest to apply a top to bottom approach when acquiring your licenses and ending with location-specific permits.
What is a Health Permit?
A health permit is a permit that gives you the authority to sell food that you have prepared to the public. Health permits are typically part of the domain of a county health department. Regulations governing requirements for types of food businesses that require health permits vary widely.
9 Licenses You Need to Start a Restaurant And How to Get Them
There are some licenses and permits that are very important to have in order to start a restaurant. If for any reason you do not those licenses and you still go ahead to open a restaurant, you can be penalized by multiple agencies or can even be prevented from kicking off business at all.
Receiving legal counsel may help you map out the steps and ensure that nothing is missed according to the laws in your restaurant’s city and state.
1. Business License
A business license gives you the authority to operate in a particular jurisdiction. The exact form that the business license can take will depend on your restaurant’s location and address. In addition, if you plan on selling alcohol then you will need federal business licenses as well as state business licenses.
In order to get a business license, you will have to go through your city and state government. The easiest way to start would be to search your state’s name plus the term “business license” in an online search engine.
This will lead you to your state government’s website where the application and its procedures can be found. You can also check out the US Small Business Administration’s website to see the rules for receiving a business license that is specific to your city.
A business license will cost you about $50 to get it registered. However, the cost of the license will differ due to the business type, location, and expected profit. This license does need to be renewed periodically. Other business licenses and permits that you will need in order to operate your restaurant successfully include;
2. Employer Identification Number
An employer identification number (EIN) basically tells the federal government that you are an employer of labor and it provides you with a tax ID. An EIN allows you to hire employees and to legally have them on your payroll. Your state will give you an employer identification number that is separate from your federal number which helps legitimize your business’s standing.
In order to get an EIN, you will need to visit the IRS website and follow the application procedures that are listed there. This can take quite some time mainly because the IRS only issues one employer identification number per responsible party per day.
Be sure to apply as early as possible. You can also fax, mail, or call the IRS to submit your application. Getting employer identification number is totally free of charge.
3. Food Service License
It only natural that your restaurant business will need a food service license because your business involves serving food. In many states, however, the type of licenses you need depends on the type of restaurant you have. For instance, dine-in restaurants might be licensed by the number of seats they have. Take out or food trucks actually still require a food service license, but it might be called a food vendor’s license instead.
Food service licenses are issued by your state health department – which means they’ll also vary depending on where you’re located. You will have to start by reviewing the food vendor’s application requirements for your specific state with the U.S. Food and Drug Administration.
They will also require an in-person visit from the health department to ensure that your restaurant conforms to the restaurant food safety regulations. Also, they will come from time to time to check on you. The process for how to get a food service license is pretty simple: you can apply online with the name and location of your restaurant.
A food service license costs from $100 to $1,000 depending on the classification and size of the restaurant, as well as your location.
4. Sign Permit
A sign permit allows you to display or modify permanent signage outside your restaurant’s building. Receiving the permit indicates that you have met the standard and codes required and can proceed in adding the sign.
To apply for a sign permit, you will want to visit your local county government’s website for the steps and application. Requirements may vary depending on the size and type of sign. The cost of a sign permit will be dependent on the size of your sign. You can expect a typical starting range of $20 to $50.
5. Liquor License
A food license was never designed to cover the sale for liquor in your restaurant and as such, you will need to get an additional license for that. Even though liquor laws can vary from state to state, selling alcohol without a license will result in a lot of penalties, fines and even getting your business shut down.
You’ll want to start this process early if you intend to serve alcohol as liquor licensing authorities usually have various levels of licenses you can apply for.
The location of your restaurant and the type of alcohol you will be selling will go a long way to determine the type of license you will go for. Each state has its own Alcohol Beverage Control (ABC) Board. If you want to get a license, then this is the place to start.
This agency is in charge of regulating the sale of alcohol. You will want to determine how to contact your state’s control board and then set up a conversation to understand your state’s laws and the process of how to get a liquor license. There are two major types of liquor licenses; on-license and off-license.
- You will need an on-license if the liquor you want to sell will be consumed in your restaurant. On the other hand, you will need an off-license if the liquor you sell is intended to be consumed off the premises – for example, a liquor store or Grocery Store.
- As a restaurant owner, you should go for an on-liquor license. Be that as it may, a lot of states have several classes of liquor licenses so you’ll want to go over all of these requirements
6. Live Entertainment and Music License
If you own a restaurant, you can’t just plug your smartphone into a speaker and play music in your restaurant or get a friend to play live music. At least not legally. Restaurants need a license from performance rights organizations such as BMI, ASCAP, or SESAC to avoid copyright infringement, which can cost between $250 and $500 for background music.
The rates will vary depending if the music is live, recorded, the number of nights music is playing per week, and whether there’s an entrance fee, amongst other factors. For live music, you’ll also need to check for additional safety and zoning permits, which vary by city and state. If you decide to play a copyrighted music without a license, you can be fined about $750 to $30,000.
7. Resale Permit
Also known as a seller permit, a resale permit is usually only needed if you are starting your restaurant in a state that issues sales permit. It prevents double taxation on a product by collecting tax when your customer buys the product, rather than when you purchase the product initially.
You can register online with your local government to be provided with a tax exempt certificate. The fees vary depending on your security deposit amount but can be anywhere from $0 to $50.
8. Dumpster Placement Permit
Your restaurant will most likely need a dumpster in order to help in the disposal of refuse. In that vein, you will need a dumpster placement permit. This would allow you to place a dumpster outside your facility that can then be used for food waste and trash disposal. The price of the permit will vary depending on the size of the dumpster and where the restaurant is located.
9. Valet Parking Permit
The need to have valet parking permit can vary from state to state. If you would like to have valet parking for your restaurant then you should check with you local government to see if a permit is required.
If so, you may be asked to present a detailed plan of your valet service, indicating the pick-up and drop-off points, the number of parking spaces needed, how payment will be collected, and letters of agreement from your designated drivers. The fees associated vary depending on your state.
How to Get a Restaurant Health Permit
In order to get a health permit, you should contact your local county health department for the requirements for a health permit. Health inspections are conducted differently in each state, but there are some basic items that inspectors are looking for.
Environmental health inspectors check that safeguards are in place to protect food from contamination by food handlers, cross-contamination, and contamination from other sources.
This implies that they will check to make sure that raw meat isn’t in contact with surfaces, that employees wash their hands, and that rodents and other pests that can cause illnesses are not in evidence. They may also look for packaging and items that come in contact with foods to make sure that mold or bacteria aren’t transmitted.
Employee Health Permit
The employees handling food and beverages in your restaurant will also need a health permit. The FDA has specific training resources for employee health and food protection.
Usually, employees must complete a state-approved food handler’s course and purchase a food handler’s permit. The food handler’s course teaches employees about proper sanitation practices, food storage and food handling, to avoid spreading foodborne disease.
In order to get an employee heath permit, you should Google “your state” and “employee health permit” to learn more about your state’s specific requirements. An employee health permit can cost from anywhere between $100 to $500 depending on the state where you are applying from.
Is Professional Certification Needed to Start a Restaurant Business?
Generally, you might not have need for professional certification before you can be allowed to operate your own restaurant business in the United States of America, Canada, and Australia and even in Europe. But you would need to get clearance from local health authorities and foods and drugs agencies before you can be allowed to open and operate a restaurant.
This is so because the restaurant 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.
The Best Insurance Needed for a Restaurant Business
When it comes to starting a restaurant 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 restaurant 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 industry (restaurant business) is a delicate business.
These are some of the basic insurance cover that you should consider purchasing if you want to start your own restaurant business in the united states of America;
- 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 your Restaurant
If you are running a franchise restaurant Business model, it is compulsory that you file for intellectual property protection.
It will become handy and very useful as your restaurant brand begins to expand far beyond your reach. The truth is that even if you are starting your own restaurant from the scratch, you would still need to secure your brand name from an intellectual property clearinghouse.
It is a difficult to build your restaurant from the scratch, and watch the brand name slip off your hands. Even if you intend buying a restaurant franchise, you would still need to contract the trademarks and service marks from the franchising company.