There are many permits and licenses that are required when you open a retail food establishment. Different city and county has different regulation on the type of licenses required. Most city governments in the San Francisco bay area require early registration and collect a fee from each registration. There are a few cities in the nation that do not require a business to register if the business is not incorporated, unless the business is under an assumed or fictitious name. To learn about what type of licenses and permits you will need for the area your restaurant will be located in, the best way to find out is to talk to your county or city clerk. You will also want to check out the zoning ordinances and sign regulations that may apply to the type and location of your restaurant.
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Regardless, there are a number of licenses, permits and insurance that are certainly required before you can open a restaurant of your own. Listed below is a check list:
- Apply for a Federal Employer Identification Number or EIN. One of the ways to apply is to visit the IRS website. They will ask a few questions and you will be issued an EIN. This number identifies you to the government (IRS) as a business owner. Everyone who owns a business must have an EIN.
- Business License– Depending on your restaurant business location, you may be charged a percentage of your gross sales, or a simple yearly fee to operate your business.
- Seller’s permit- Allows you to buy wholesale goods without paying sales tax
You must obtain a seller’s permit if you:
- Are engaged in business in California
- Intend to sell or lease tangible personal property that would ordinarily be subject to sales tax if sold at retail (this includes wholesalers, manufactures and retailers.)
- Will make sales for a temporary period, normally lasting no longer than 30 days at one or more locations (for example, fireworks booth, Christmas tree lots, garage sale)
Restaurants are considered retail food facilities. There are many ways to apply for the seller’s permit. You can either visit their field offices in Oakland, San Jose, San Francisco, Fresno, Santa Rosa and Suisun City or apply by mail. To see a detailed list of their field offices and more information, visit : http://www.boe.ca.gov/info/reg.htm
- Worker’s Compensation Insurance: California employers are required by law to have workers’ compensation insurance, even if they have only one employee. This insurance entitiles employees to receive prompt, effective medical treatment injuries caused at work no matter who is at fault. On the other hand, employers are protected by this insurance from being sued over those injuries. Workers’ compensation insurance provides six basic benefits: medical care, temporary disability benefits, permanent disability benefits, supplemental job displacement benefits or vocational rehabilitation and death benefits. Failing to have workers’ compensation coverage is a criminal offense. Section 3700.5 of the California Labor Code makes it a misdemeanor punishable by either a fine of up to $10,000 or imprisonment in the county jail for up to one year, or both. Additionally, the state issues penalties of up to $100,000 against illegally uninsured employers. For more information, visit: http://www.dir.ca.gov/dwc/faqs.html
- Health Operational Permit – This is necessary for the selling of edible goods. Each state and county have their own set of rules and amount of fees charged. To apply for one, simply visit the local health department, fill out a form and pay the fees. You will be required to fill in the business license number, therefore, apply for a business license prior to visiting the health deparment. This permit entitles you to periodical inspections by the city’s health inspector to see if you are operating a safe and clean retail food facility. Written reports will be given for a list of violations and tasks to be completed before the next inspection. (Please note: no blueprints are required for this permit)
- Food Handler’s Permit– It is required that each food facility shall have an owner or employee who has successfully passed an approved and accredited food safety certification examination even that the certified owner or employee need not be present at the food facility during all hours of operation. The health department inspector who is responsible for your restaurant should be able to hand you information about the class schedule, class locations and any other information in regards to this permit. A grace period will be given upon the opening of your restaurant for obtainement of this permit.
- Sign Permit– Before you put up any signs for your restaurant business, contact your city officials to see if there are restrictions on the type of sign, size, location, and how the sign is lit. You should also get written approval from your landlord before you put up any sort of sign.
Alcoholic beverage license (ABC License) — If you plan on selling alcoholic beverages at your premise, you would either need a beer and wine license, or a full liquor license. Beer and wine license does not permit your restaurant to sell or serve any hard liquors such as wisky, vodka, gin, rum, tequila and any other acholic beverages that are distilled rather than fermented. It’s relatively easier to apply for a beer and wine license. To obtain one, simply fill out the application and conduct a posting for 30 days. If no one files a complain or disagreement against your restaurant selling beer and wine, you should receive a license within 6 weeks. There is a one time charge and annual fees to follow. As far as applying for a hard liquor license, first contact the ABC department to see if the quota for such license have been met in your area. If you are lucky, you may apply for an original license. If not, look for another permit holder in the area who wants to sell his/her license. It is also a good idea to look for brokers who are familiar with the area to help you look for an available license. The cost for the full liquor license varies and is depended on the county and the market. For more info, visit http://www.abc.ca.gov.
A Music License– Any establishment that plays copyrighted music, will need one of these. Whether you have a band, DJ playing CDs, or Karaoke. The fines can be steep for not having a music license. They usually run from $5,000 to $20,000, so it’s a good idea to obtain this license.
In order to receive a legal building permit for your new construction or tenant improvement project, a set of blue prints will need to be submitted and approved by the following city deparments:
- The Environmental Health Department
- The Planning and Zonning Devision
- The Building Department
- The Fire Department
- The Sanitay and Public Sewage Department
These departments may all be located in the same building or they could be in five different locations that are far away from each other, depending on which county and city your restaurant is located. Some cities offer a one-stop plan check process in which they would route the different sets of blue prints to different departments, while some cities require the applicants to take their blue prints and submit them to separate departments in a specified order.
Plan check fees vary from city to city as well. Each local government and department has its own set of rules and formulas in calculating the plan check fees. This fee could range from $500 – $10,000.