19 Licenses and Permits Needed to Open a Restaurant

Opening a restaurant involves a significant amount of paperwork, which can sometimes be so confusing and overwhelming that many restaurateurs abandon the process altogether. This article aims to clarify the restaurant regulatory landscape by providing a list of essential restaurant licenses and permits and guidance on how to obtain them. Remember that this guide focuses primarily on the United States, and requirements may vary by state, city, or county, so always consult local authorities to confirm what applies to your situation.

Here are the essential licenses and permits needed to open a restaurant:

1. Business License

A business license is the first and most essential permit required to operate a restaurant. Issued by your local city or county, this license legally authorizes you to conduct business within a specific jurisdiction. It signifies to the government that your restaurant is operating lawfully.

How to Obtain It:

• Apply through your local city or county office.
• Provide business details, such as name, address, and ownership structure.
• Pay an application fee, which varies by location.

Importance:

Operating without a business license can result in fines or forced closure. Additionally, this license helps local governments track businesses for tax and regulatory purposes.

2. Employer Identification Number (EIN)

An Employer Identification Number (EIN) is a unique number issued by the Internal Revenue Service (IRS) for tax purposes. It is required if you plan to hire employees, open a business bank account, or file taxes as a business entity.

How to Obtain It:

• Apply online through the IRS website.

Importance:

An EIN is required for tax reporting and is critical for payroll, tax filings, and business compliance with federal regulations.

3. Certificate of Occupancy

Before you can open your restaurant to the public, you need a certificate of occupancy. This document certifies that your building complies with local building codes and is suitable for commercial use.

How to Obtain It:

• Apply through your local building department.
• Schedule inspections to ensure the building meets safety and structural codes.
• Pay any required fees.

Importance:

This certificate ensures your restaurant space meets safety standards and local zoning laws. Operating without it is illegal.

4. Food Service License

A food service license is issued by your local health department to certify that your restaurant meets safety and health standards for food preparation and handling.

How to Obtain It:

• Pass a health inspection by the local health department.
• Submit details about your menu and food preparation processes.
• Pay the application fee, which can vary by location.

Importance:

A food service license is necessary to legally serve food to customers and ensure compliance with health and safety regulations.

5. Food Handler’s Permit

In addition to the food service license, all employees who handle food must have a food handler’s permit. This permit ensures staff are trained in safe food handling practices to prevent contamination and foodborne illnesses.

How to Obtain It:

• Employees must complete an accredited food safety course.
• Pass a test demonstrating knowledge of food safety practices.
• Receive certification upon completion.

Importance:

This permit ensures that food is prepared safely and hygienically, reducing the risk of health violations.

6. Building Health Permit

A building health permit is required to confirm that your restaurant building complies with health and sanitation regulations. This includes ventilation, waste disposal, and proper plumbing to prevent contamination.

How to Obtain It:

• Apply through your local health department.
• Ensure your building’s layout and systems (kitchen, restrooms, etc.) meet health codes.
• Pass a health inspection.

Importance:

This permit is essential to maintain proper hygiene and safety standards in your restaurant’s infrastructure.

7. Alcohol License

If you plan to serve alcohol in your restaurant, an alcohol license (or liquor license) is mandatory. This license is issued by your state’s Alcoholic Beverage Control (ABC) board or commission, allowing you to serve alcoholic beverages legally.

How to Obtain It:

• Apply through your state’s ABC or relevant authority.
• Undergo a background check and meet state-specific requirements.
• Pay a fee, which can vary widely by state.

Importance:

Operating without an alcohol license can lead to severe penalties, including fines and the closure of your restaurant.

8. Live Entertainment and Music License

If your restaurant hosts live music or plays recorded music, you will need a live entertainment and music license. This is obtained through performance rights organizations (PROs) like ASCAP, BMI, or SESAC.

How to Obtain It:

• Contact the relevant PROs and apply for a license.
• Choose a license based on the types of music you plan to play.
• Pay the licensing fee.

Importance:

Playing music without the proper license can result in costly fines and legal actions from artists and record labels.

9. Sign Permit

A sign permit is required for any outdoor signage for your restaurant, such as banners, awnings, or illuminated signs. The permit ensures that your signage complies with local zoning laws and safety standards.

How to Obtain It:

• Apply through your local zoning or planning department.
• Submit a design and placement plan for the sign.
• Pay any applicable fees.

Importance:

Signage is crucial to your restaurant’s branding, but unauthorized signs can result in penalties or forced removal.

10. Sales Tax License

A sales tax license (or sales tax permit) allows you to collect and remit sales tax on taxable items sold in your restaurant. The state’s Department of Revenue issues it.

How to Obtain It:

• Apply through your state’s revenue department.
• Provide details about your business and expected sales.
• Pay any required fees.

Importance:

Failure to collect and remit sales tax can lead to fines and legal issues with the state’s tax authorities.

11. Dumpster Placement Permit

A dumpster placement permit is required to place a commercial dumpster outside your restaurant. This permit is issued by local waste management or public works departments and ensures proper waste disposal.

How to Obtain It:

• Apply through the local public works department.
• Provide details about the dumpster’s size and placement.
• Pay a placement fee.

Importance:

Improper waste management can result in fines and harm the environment, so securing this permit is essential.

12. Seller’s Permit

A seller’s permit is required if your restaurant sells goods subject to sales tax, such as retail items, packaged foods, or other taxable products. This differs from a resale permit and is issued by your state’s Department of Revenue.

How to Obtain It:

• Apply through your state’s Department of Revenue.
• Provide business details and pay any applicable fees.

Importance:

This permit ensures you can sell taxable goods and collect sales tax.

13. Resale Permit

A resale permit allows you to purchase goods for resale (e.g., food ingredients and supplies) without paying sales tax. It is issued by the state’s tax authority.

How to Obtain It:

• Apply through your state’s tax agency.
• Provide proof that you are purchasing goods for resale.
• Pay any necessary fees.

Importance:

Having a resale permit can save your business money by allowing you to avoid paying sales tax on goods you plan to resell.

14. Health Department Permit

A health department permit is often required in addition to the food service license. This permit ensures that your restaurant complies with all local health and safety regulations, including sanitation, food handling, and waste management.

How to Obtain It:

• Schedule an inspection with the health department.
• Meet health and safety codes.
• Pay any associated fees.

Importance:

This permit is essential to maintain high hygiene and safety standards in your restaurant.

15. Valet Parking Permit

You will need a valet parking permit if your restaurant offers valet parking services. Your local transportation or parking authority issues this permit and regulates valet services.

How to Obtain It:

• Apply through the local transportation department.
• Ensure that your valet service complies with traffic and parking laws.
• Pay the permit fee.

Importance:

You may be penalized or prohibited from offering valet services without this permit.

16. Fire Department Permit

A fire department permit ensures your restaurant complies with local fire safety regulations. This includes the proper installation of fire alarms, extinguishers, and suppression systems.

How to Obtain It:

• Request an inspection from your local fire department.
• Ensure that fire safety measures meet the code.
• Pay any applicable fees.

Importance:

Fire safety is crucial for protecting both your patrons and your restaurant, and failure to comply can lead to closures.

17. Grease Trap Permit

A grease trap permit is necessary for restaurants that prepare food with oils and fats. It ensures that your grease trap system complies with local waste management regulations and prevents clogs in the sewer system.

How to Obtain It:

• Install a grease trap that meets local standards.
• Schedule regular inspections.
• Pay any applicable fees.

Importance:

Proper grease management is essential for avoiding plumbing issues and environmental damage.

18. Food Truck Permit (if applicable)

You will need a food truck permit if you plan to operate a food truck as part of your restaurant business. Your local health or transportation department issues this permit and regulates mobile food vendors.

How to Obtain It:

• Apply through your local government.
• Ensure your food truck meets health and safety standards.
• Pay any required fees.

Importance:

Operating a mobile food business without a food truck permit is illegal and can result in fines or vehicle impoundment.

19. Liquor Liability Insurance

While not a license or permit, liquor liability insurance is essential if your restaurant serves alcohol. This insurance protects your business from claims related to alcohol service, such as over-serving patrons or alcohol-related accidents.

How to Obtain It:

• Contact an insurance provider specializing in liquor liability.
• Choose a policy that meets your business needs.
• Pay the insurance premium.

Importance:

This insurance safeguards your restaurant from financial loss due to alcohol-related incidents.

Conclusion

Opening a restaurant requires navigating a complex web of licenses and permits, each vital to ensuring your business’s legal and safe operation. From essential business licenses to specialized permits for alcohol, food safety, and entertainment, understanding these requirements is crucial to avoid fines, delays, and potential closures. Make sure to consult local authorities and legal experts to ensure you meet all the necessary obligations and focus on providing an exceptional dining experience for your customers.