When you open a new restaurant there is a whole laundry list of things to consider. What color should the walls be? Which restaurant POS should I use? What will the menu design look like? With all the decisions that you’ll need to make, one thing is for sure: you absolutely must get all the permits and licenses needed to do business.
The rules for restaurant licenses and permits vary from state to state, but no matter where you live there are going to be a few universal food and beverage licenses that every new restaurant owner must get.
5 Restaurant Licenses and Permits You Need to Open Your Business
1. Restaurant Business License
A restaurant business license is a permit issued by the government that allows an individual or company to legally conduct business in a specific geographical jurisdiction. This could be a state, city, or county. In the United States, every business must have a license in order to operate legally.
How do I get a restaurant business license?
Depending on where you live, the process for how to get a restaurant business license differs. Your business license will need to be obtained in the city where your restaurant is located, so use your restaurant’s address to search the US Small Business Administration (SBA)’s website to find out the state- and city-specific rules for obtaining a restaurant business license.
How much does a restaurant business license cost?
The cost to obtain a restaurant business license also varies by city and state, though it is generally around $50 for most applications. However, other costs associated with obtaining your business license can vary from as much as $25 to $7,000.
2. Restaurant Food Service License
Any business that serves food will also need a food service license. In many states, the type of licenses you need depends on the type of restaurant you have. Food trucks, for example, may need what’s called a food vendor’s license instead of a food service license, so check to find out exactly what you need for your type of restaurant.
How to get a Food Service License
Food service licenses are issued by your state health department, so start by reviewing the food vendor’s application requirements for your specific state with the U.S. Food and Drug Administration. Obtaining your restaurant food service license also will require an in-person visit from the health department. They’ll be ensuring you are in accordance with restaurant food safety regulations and will come back to check in on that from time to time. The process for how to get a food service license is pretty simple: you just apply online with the name and location of your restaurant.
How much does a Food Service License cost?
Food service license fees are often based on the classification and size of the restaurant, as well as your location. As a rule of thumb, you should expect a food service license to cost between $100 to $1,000 depending on your state.
3. Restaurant Liquor License
Your food service license won’t cover the liquor you intend to serve at the bar – you’ll need a liquor license for that. Although alcohol laws will vary from state to state, attempting to open a bar without a liquor license is going to lead down a road of penalties, fines, and closed doors. Start this process early if you intend to serve alcohol, as liquor licensing authorities usually have various levels of licenses you can apply for and are known for taking the longest amount of time to obtain.
How do I get a restaurant liquor license?
There are different types of restaurant liquor licenses; which one you need will be determined by the type of liquor you intend to sell (full bar, beer and wine only, BYOB, etc.) as well as, once again, your location.
Each state has its own Alcohol Beverage Control (ABC) Board that is in charge of regulating the sale of alcohol. This is where you are going to start your process. To get your liquor license, first contact your state’s ABC Board to set up a conversation to understand your state’s laws, determine which type of liquor license you’ll need, and the next steps in the process.
What type of liquor license do I need?
A good background to know is that there are two main types of liquor licenses: on-license and off-license.
- You will need an on-license liquor license if the alcohol you sell is intended to be consumed on the premises of your business – for example, a bar or restaurant.
- You will need an off-license if the alcohol you sell is intended to be consumed off the premises – for example, a liquor store or grocery store.
As a bar or restaurant owner, you’ll always be looking to obtain an on-license liquor license. Nonetheless, most states have several classes of liquor licenses so you’ll want to go over all of these requirements.
4. Food Handler’s Permit
Sometimes also referred to as an Employee Health Permit, a Food Handler’s Permit ensures that your staff has completed a food safety certification. This permit ensures your staff understands important regulations for food sanitation, storage, protection, and preparation. This permit is relatively easy to obtain, but you and each person on your team will need to apply for their own personal permit.
Every state varies in its requirements for food handler permits and the courses required to earn the certification. You’ll want to check with your Department of Health to learn the state required certifications and courses. Depending on your state, a Food Handler’s License can cost anywhere from $10 to $600. Additionally, a Food Handler’s Permit does expire, and the length of time they are good for also varies based on location.
5. Employer Identification Number (EIN)
While this isn’t exactly a permit or license in its own right, an EIN is needed when applying for any permits, licenses, and filing other paperwork with the state. An EIN is assigned by the IRS and it is essentially a tax ID number – think of it essentially as your restaurant’s social security number. You can apply for an EIN through the IRS website, or by fax, phone, or mail.
9 More Restaurant Licenses and Permits You Might Need
Besides the five big ones above, what other restaurant licenses do you need? Well, that could vary by your state, but it also all depends on your restaurant and your needs. Here is a list of the other permits to keep in mind.
1. Live Entertainment and Music License for Restaurants
Restaurants and bars 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. Rates vary further depending on if the music is live or recorded, as well as the number of nights music is playing per week and whether or not 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. Playing copyrighted music without a license can cost anywhere from $750 to $30,000 in fines.
Recently, Spotify has created a service called Soundtrack Your Brand, which includes pre-licensed soundtracks that you can play in your business, all covered by the monthly subscription fee. However, before signing up, we still recommend checking in with your state laws to ensure that this service has you completely covered.
2. Pool Table License for Restaurants
If you want pool tables, certain states and counties require a pool table license, which costs an annual fee of $10 to $15. In some areas, you are limited to how many tables you’re allowed and the hours that the tables can be used.
3. Dumpster Placement Permit for Restaurants
A dumpster placement permit allows you to have a state dumpster outside your kitchen to dispose of food waste. These permits have varying stipulations and costs depending on where the dumpster is placed, the bar location, and the dumpster’s size.
4. Sign Permit for Restaurants
Before you put up your carefully designed restaurant sign, you’ll need a permit. While a sign permit for your restaurant may seem like a minor detail, when you think about how important it is in the grand scheme of your restaurant design, it’s best to make sure it’s squared away.
When it comes to your sign: sizing, location, and even lighting is determined by your city, not your state. This can make things a bit trickier to navigate.
First things first: Does my restaurant need a sign permit? Sign permits may be required for:
- Permanent restaurant signs
- Ground and tract signs
- Signs erected on walls
- Awning signs
- Signs in shopping centers or at multi-tenant buildings
- Internally illuminated signs
- Special events signs
The cost for a sign permit can range anywhere from $20 to $50.
5. Restaurant Certificate of Occupancy
A restaurant’s Certificate of Occupancy means that your building has passed local and/or state inspections standards and that everything is up to code. It’s best to set up some time with your city’s building inspector to go over any plans you have for the space because you may need to have more than one inspection done before obtaining your license. For example, if you plan to have all the electrical work re-wired, the inspector will likely have to look at that before you can move on to the next phase of renovation.
6. Restaurant Sales Tax Permit
Sometimes also called a Sales Tax License, this allows you to legally collect sales tax in your state. This can also be called a Sellers Permit or Sales Tax License.
7. Restaurant Resale Permit
A Resale Permit allows you to purchase wholesale goods from your vendors tax-free. Since sales tax is added on to your final product and paid by the consumer, you’ll want to remove it from your wholesale purchases to avoid the product essentially being double-taxed, saving you money.
8. Restaurant Building Health Permit
A Building Health Permit indicates that your restaurant building complies with sanitation and safety laws, and is generally only needed for new constructions, though some states or cities may require it for every business.
9. Restaurant Valet Parking Permit
If you’re going to offer valet services, you’ll need a Valet Parking Permit license if you plan to have your valet drivers park anywhere besides a private parking lot. There may also be other permits and licenses needed for designating a curbside valet spot in front of your restaurant, so check with your state or city for local laws.
Restaurant License Resources, by State
As you may have noticed, the one common theme of restaurant licenses and permits is that “it varies by state.” To make your life easier, we’ve compiled a list of all 50 state food service codes and regulations from the U.S. Food and Drug Administration so you have a jumping-off point on your journey to obtain all the restaurant licenses and permits you need.