Licenses and Permits Required to Open a Restaurant

Planning to start a restaurant? You probably have the location, theme, décor, menu, staffing, and many other details figured out. That alone is not enough. Opening a restaurant involves a lot of paperwork, legal formalities, and licenses and permits before you can finally open your doors.

You are likely aware of liquor licenses, but a number of other licenses and permits are required depending on the location and type of restaurant you want to open. Failing to obtain these can result in steep penalties and legal battles, and in some cases your restaurant may never open at all. Here is a list of the licenses you need to start a restaurant in the US. Let us dive in.

Business License

A business license is a permit issued by the government that lets an individual or company conduct business legally within a geographic jurisdiction such as a city or state. The process for obtaining one differs from city to city, so apply for a permit in the city where you plan to open your restaurant. According to the US Small Business Administration (SBA), complete details on state and city rules and regulations for obtaining a license are available on the SBA website. Costs vary from one city or state to another.

Employer Identification Number

The next license any business needs is an Employer Identification Number (EIN) to operate in the US. The EIN is a nine-digit tax ID that lets a business owner file taxes properly and on time. It is your legal business identity. Regulatory bodies issue only one EIN per day, so it is best to apply well in advance because the waiting period is long. According to the IRS, you can apply for an EIN online in three steps:

1. Determine your eligibility by filling out the questionnaire.
2. Complete the online application.
3. Submit the application.

Certificate of Occupancy

Safety of employees, owners, and guests is a top priority for any restaurant owner. That is why owners put so much effort into making sure the food served is both tasty and safe to eat. Owners also need to make sure the building they operate from is safe. A Certificate of Occupancy confirms that the building where a restaurant is located has passed its final inspection and is safe to operate in. Restaurant owners must obtain one before they start operations. The process to obtain a certificate of occupancy is as follows:

1. Search for your state name along with the term “certificate of occupancy” in a search engine.
2. Set up an appointment with your local zoning or inspection officer.
3. Arrange for an inspection of your premises by the local building or zoning department.

Most states include a city and fire permit in the certificate of occupancy.

Signage Permit

Prominent signage is essential for people to find and reach your restaurant. Putting up signage requires a permit from the relevant city authorities. Each city has its own standards for the size, location, and lighting of signage, and all outdoor signage in particular must be approved by the local governing city authorities. If you run your restaurant out of a rented or leased premises, it is a good idea to get written permission from your landlord in addition to the official government-issued sign permit.

Food Service License

The core job of any restaurant, big or small, is to serve food, so one license you must get is the food service license. The license you need depends on the type of establishment you are setting up. For example, someone setting up a food truck will need a food vendor's license instead of a food service license. These regulations vary across states. The food service license is issued by the state health department, and according to the US Food and Drug Administration (FDA), you can find complete details on state-specific requirements on the FDA website. The process to obtain a food service license:

1. Check your state-specific requirements and complete the application process.
2. After you apply, a health department visit will be arranged. Prepare for the inspection.
3. The inspector will check whether your restaurant complies with food safety regulations.
4. If all goes well and the report is submitted, a license will be issued.

The cost is determined by your restaurant's location, type, and size, and varies by state. The food service license needs to be renewed periodically.

Food Handlers Permit and Employee Health Permit

A food handlers permit, also called an employee health permit, is given to an individual on successful completion of a food safety certification program. The program teaches your staff the regulations for food sanitation, storage, protection, and preparation. Each staff member needs to apply for the food handlers permit individually. Each state has different certification courses and validity periods. For complete details on state-specific requirements, visit your state Department of Health website. Costs vary by state.

Building Health Permit

A building health permit is typically required if you are opening your restaurant in a newly built premises. Some counties may require a building health permit for older buildings too, so check the rules for your area. The permit ensures that the building your restaurant operates from complies with all sanitation regulations. It is issued by the local government body of your county. The building will usually be inspected from time to time to ensure there is no lapse that could lead to an unforeseen problem. Costs vary by building age and location.

Other Licenses to Consider

Beyond these mandatory licenses, you may need a few additional ones if you plan to serve alcohol, play live music, provide valet parking, or run a games room. Here is a quick roundup of other licenses restaurants commonly apply for:

• Liquor license
• Music license
• Resale permit
• Seller's permit
• Dumpster placement permit
• Pool table permit
• Valet parking permit

Starting your entrepreneurial journey with the law on your side is essential to your restaurant's success. Failing to comply can result in steep penalties and even the closure of your business.