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Restaurant Licenses and Permits

Restaurant Licenses and Permits

Last updated on 4/26/2019

Starting a restaurant takes more than just the startup cash. It even takes more than the location, staff, and menu. It requires a foundation established with restaurant licenses and permits. Getting the writs and proofs you need for each restaurant license takes time, so it's important to start the process as early as possible.

Below is an overview of what you can expect with each of the following business licenses and permits as you work towards opening your restaurant. You may use the following links to jump to different sections of this article.

What Licenses and Permits Are Required to Start a Restaurant?

There are some licenses and permits that are absolutely required in order to open a restaurant. Failure to obtain them can result in penalties from multiple agencies or even prevent you from opening your location 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. It’s easiest to work your way down from the top, starting with the required restaurant business licenses and ending with location-specific permits you may encounter.

Business License

person signing a contract for a business license

What Is a Business License?

A business license gives you the authority to operate in your jurisdiction. The exact form of this license is dependent on your restaurant’s location and address. If you plan on selling alcohol, you will need a federal business license as well as a state business license.

How to Get a Business License

To get a business license, you will want to work 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 bring up your state’s government website where the application and procedures can be found. For more information, you may use the US Small Business Administration’s website to look up your state and city-specific rules for receiving a business license.

How Much Does a Business License Cost?

A business license can cost around $50 to register, however, the cost of the license itself varies depending on your business type, location, and expected profit. This license does need to be renewed periodically.

Employer Identification Number

What Is an Employer Identification Number?

An employer identification number (EIN) essentially tells the federal government that you are an employer and provides you with a tax ID. This number allows you to officially hire employees and have them on a legal payroll. Your state will give you an employer identification number that is separate from your federal number which helps legitimize your business's standing.

How to Get an Employer Identification Number

To obtain an EIN, you will want to visit the IRS’s website and follow the application process listed there. This can take a while since the IRS only issues a limited number of employer identification numbers per day. Be sure to apply as early as possible. You can also fax, mail, or call the IRS to submit your application.

How Much Does an Employer Identification Number Cost?

An EIN is free but takes time to obtain.

Certificate of Occupancy

What Is a Certificate of Occupancy?

A certificate of occupancy indicates that the building where your restaurant is located has passed its final inspection. It deems the building safe to operate in.

How to Get a Certificate of Occupancy

To receive a certificate of occupancy, your location will need to be inspected by your local building or zoning department. To arrange the appointment, search your state’s name plus the term “certificate of occupancy” in an online search engine to find the information on your state government’s website. This certificate may also include a city and fire permit issued by your local fire marshal.

How Much Does a Certificate of Occupancy Cost?

A certificate of occupancy will generally cost around $100.

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Food Service License

What Is a Food Service License?

A food service license indicates that a restaurant meets all food preparation, storage, and safety regulations, and they have been granted a license to sell food. It ensures that your location is in accordance and up-to-date with the restaurant food safety laws.

How to Get a Food Service License

A food service license is issued by the city or county Health Department and requires an inspection to take place. Depending on your county, the completion of a food safety training program or a food handler’s permit may be required to be approved for your license. The Health Department will continue to make regular visits to inspect your restaurant to make sure that the expected standards are being maintained. To apply, start by reviewing the food vendor’s application requirements on your state government’s website. You may then apply directly online.

How Much Does a Food Service License Cost?

The fees for food service license can vary by location and number of employees, but generally, they can range from $100 to $1000. These licenses also need to be periodically renewed.

Sign Permit

neon red restaurant sign

What Is a Sign Permit?

A sign permit allows you to display or modify permanent signage outside your restaurant’s building. In many counties, signage size, brightness, and location are regulated and need to be approved beforehand. Receiving the permit indicates that you have met the standard and codes required and can proceed in adding the sign.

How to Get a Sign Permit

To apply for a sign permit, you will want to visit your local county government’s website for the steps and application. This will involve working with a sign contractor and the Zoning Department. You will be required to provide a scale drawing of the signage, and oftentimes you will need variations to be submitted for approval. If your sign includes lighting, you may also need to provide the wiring and circuit plans you intend on establishing. Requirements may vary depending on the size and type of sign.

How Much Does a Sign Permit Cost?

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.

Building Health Permit

What Is a Building Health Permit?

A building health permit indicates that your restaurant building and practices comply with sanitation regulations. This is typically only needed when the building is a new construction, but may be required regardless in certain counties to ensure a sanitary work and dining environment.

How to Get a Building Health Permit

A building health permit is issued by your local government. To confirm if one is needed and to apply, search your state’s name plus the term “building health permit” in an online search engine. To maintain this permit, your location will be subject to routine inspections.

How Much Does a Building Health Permit Cost?

You can expect a building health permit to cost somewhere between $50 and $1000. Some factors that can impact the cost are the building’s age and location.

Employee Health Permit

What Is an Employee Health Permit?

An employee health permit, also known as a food handler’s permit, indicates that a specific employee has passed a course educating them on proper health and safety practices in a commercial kitchen. The course teaches employees about proper food storage and food handling practices along with proper sanitation practices to avoid cross-contamination.

How to Get an Employee Health Permit

An employee health permit is provided after an employee successfully completes a state-approved food handler’s course and passes the final test. To find the course selected by your state, search your state’s name plus the term “employee health permit” or “food handler’s permit“ in an online search engine.

How Much Does an Employee Health Permit Cost?

An employee health permit can cost anywhere from $100 to $500 and must be periodically renewed.

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Other Restaurant Permits and Licenses to Consider

Aside from the required permits and licenses, there are others you may need to obtain depending on what additions you are looking to make to your restaurant. It is important to familiarize yourself with the following permits, in case you run into them down the line.

If you’re ever concerned that you may accidentally miss a permit, be sure to divulge your full business plan with your legal counsel so they may identify permits you still need to apply for. Below is a quick review of just some additional permits you may encounter.

Liquor License

three cocktails on a bar

The process for obtaining a liquor license can vary from state to state and city to city. You will want to check with your local government for the processes and regulation you must abide by in your jurisdiction in order to obtain your bar license. A liquor license tends to be one of the most regulated and strict licenses you may encounter.

In some locations, you may be required to get both a liquor license and a beer and wine license if you are looking to serve all three. Remember to apply early, since the application process can take as long as a year. The fees will vary depending on your location, and the bar license will need to be renewed each year.

Music License

Choosing the right music for your restaurant can be a challenge, but before you can play any music at all you need a music license due to copyright laws. You can work with a number of companies to be able to use the music they have rights to, such as the American Society of Composers, Authors and Publishers, or Broadcast Music Incorporated. Regardless of if you’re using a CD or a streaming service, a license is needed. The pricing can vary but is usually between $250 and $500. A similar permit you may also be interested in researching is a live entertainment license.

Resale Permit

A resale permit, also known as a reseller permit or a resale license, prevents double taxation on a product by collecting tax when your customer buys the product, rather than when you purchase the product initially. A resale certificate is generally only needed if your restaurant is located in a state that issues sales tax, such as California where a California resale certificate is needed. 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.

Seller's Permit

A seller's permit, or a sales tax permit, indicates to the state that your business collects sales tax during customer purchases. In various states, a seller's permit is needed along with the resale permit for proper taxation documentation. A sales tax permit can be obtained from your local government's website and only requires a security deposit determined at the time of your application.

Dumpster Placement Permit

If you are going to need dumpsters for your restaurant, you may also 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 costs for the permit can vary depending on the placement and size of the dumpster, along with the location of your establishment.

Valet Parking Permit

person playing billiards on a pool table

The need for a valet parking permit can vary from state to state. If you’re planning to have valet parking for your restaurant, be sure to check with your 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.

Pool Table Permit

One license that can easily be forgotten is a pool table permit. Some states do regulate billiard tables and require business owners to register them before they can be used. A pool table permit can limit the hours of operation of the billiard area and even the number of pool tables in an establishment. The fees can vary on your location and how many tables you are interested in adding. The permits also need to be renewed annually.

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Whether you're starting a restaurant, buffet, or catering business, the restaurant permits and licenses you acquire are essential to your success. With penalties that can affect your bottom line or even close your doors, you will want to make sure you are thoroughly researching the restaurant licenses you need and starting the application process early to allow them time to be issued.

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