What are the Essential Permits and Licenses for Your New Restaurant in the US?

Opening a restaurant is easier than you think, but if you follow the right steps! 

If you're planning to launch your own restaurant in the U.S., congratulations! The food industry is an exciting and rewarding space, full of opportunities for success. But before you start serving your first customers, you need to take care of the legal side of things. 

Getting the right permits and licenses is an important step in making sure your restaurant runs smoothly without any legal hiccups. 

In this guide, I'll walk you through the essential permits and licenses you need to open a restaurant in the United States. Let’s have a look.

1) Employer Identifier Number (EIN) Number

An Employer Identification Number (EIN) is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to businesses operating in the United States. It functions similarly to an individual's Social Security Number but is used to identify a business entity for tax filing and reporting purposes. Obtaining an EIN is essential for tasks such as paying employees, filing business tax returns, and opening business bank accounts.

How to Apply for an EIN?

The IRS offers several methods to apply for an EIN:

• Online Application: This is the preferred and fastest method. The online application is available to entities whose principal business, office, or agency is located in the United States or U.S. Territories. Once the application is completed and validated, an EIN is issued immediately.
• Fax Application: You can fax a completed Form SS-4 to the appropriate IRS fax number. If the form contains all the required information, an EIN is assigned, and a confirmation is sent back via fax within four business days.
• Mail Application: Mail the completed Form SS-4 to the IRS. Processing times for EIN applications received by mail are approximately four weeks.
• Telephone (for International Applicants): International applicants may call 267-941-1099 (not a toll-free number) between 6 a.m. and 11 p.m. (Eastern Time) Monday through Friday to obtain an EIN. The person making the call must be authorized to receive the EIN and answer questions concerning the Form SS-4.

Official Fee

Applying for an EIN is free of charge when done directly through the IRS. 

Note: Be cautious of third-party services that charge a fee to obtain an EIN on your behalf, as the application process is straightforward and does not require any payment.

2) Business License

A business license grants you legal permission to operate your restaurant within a specific jurisdiction, such as a city or county. This license ensures your business complies with local regulations and standards.

How to Apply for a Business License?

Contact your city or county government’s business licensing department or visit their official website to obtain the necessary application forms. Submit the completed forms along with any required documentation, which may include proof of occupancy, health permits, and identification.

Official Fee

The cost varies widely depending on your state and the size of your establishment. Typically, application fees range from $15 to several hundred dollars, with additional costs possible based on specific local requirements.

3) Seller’s Permit

A seller’s permit allows your restaurant to collect sales tax from customers on taxable goods and services, which you then remit to the state.

How to Apply for a Seller’s Permit?

Apply through your state’s Department of Revenue or equivalent agency. Many states offer online registration for this permit.

Official Fee

In many states, there is no fee to obtain a seller’s permit. However, some states may require a security deposit or have nominal fees, so it's essential to verify with your specific state's regulations.

4) Resale Permit

A resale permit allows your restaurant to purchase goods, like ingredients or supplies, without paying sales tax, under the premise that these goods will be resold to customers.

How to Apply for a Resale Permit?

This permit is often obtained through your state’s taxation or revenue department, sometimes in conjunction with the seller’s permit.

Official Fee

Typically, there is no fee for a resale permit, but this can vary by state.

5) Certificate of Occupancy

This certificate verifies that your restaurant's building complies with local building codes and is safe for public occupancy.

How to Apply for a Certificate of Occupancy?

After completing any necessary construction or renovations, schedule an inspection with your local building or zoning department. Upon passing the inspection, you'll be issued the certificate.

Official Fee

Costs vary by location but typically range from $100 to $400.

6) Food Handler’s Permit

Also known as an employee health permit, this certifies that your staff has been trained in safe food handling practices to prevent foodborne illnesses.

How to Apply for a Food Handler’s Permit?

Staff members must complete a state-approved food safety course and pass the associated exam. Many of these courses are available online.

Official Fee

The cost for training and the permit can range from $100 to $500, depending on the course provider and state requirements.

7) Worker’s Compensation Insurance

This insurance provides coverage for employees who may suffer work-related injuries or illnesses, ensuring they receive medical care and compensation for lost wages.

How to Apply for a Worker’s Compensation Insurance?

Purchase a policy from a state-licensed insurance provider. Some states have specific agencies or funds that provide this insurance.

Official Fee

Premiums vary based on factors like the number of employees, payroll size, and the risk associated with the job duties. It's best to obtain quotes from multiple insurers to determine exact costs.

8) Health Operational Permit

This permit ensures your restaurant meets all local health and safety regulations, including sanitation standards and food safety protocols.

How to Apply for a Health Operational Permit?

Contact your local health department to schedule an inspection. An inspector will assess your facility, and upon meeting all requirements, you'll be issued the permit.

Official Fee

Fees can range from $50 to $1,000, depending on your location and the size of your establishment.

9) Sign Permit

A sign permit allows you to legally display signage for your restaurant, ensuring it complies with local regulations regarding size, lighting, and placement.

How to Apply for a Sign Permit?

Submit your sign design and specifications to your local zoning or planning department for approval.

Official Fee

Costs typically range from $50 to $350, depending on your location and the specifics of the sign.

10) Music License

If your restaurant plays copyrighted music, whether live or recorded, you need licenses from performance rights organizations (PROs) to legally broadcast the music.

How to Apply for a Music License?

Contact PROs such as ASCAP, BMI, or SESAC to obtain the necessary licenses. Often, restaurants secure licenses from all major PROs to cover a broad range of music.

Official Fee

Fees vary based on factors like the size of your establishment and the manner in which music is played. Typically, annual fees range from a few hundred to several thousand dollars.

11) Liquor License

If you plan to serve alcoholic beverages, a liquor license is mandatory. This license regulates the sale of alcohol and ensures compliance with state and local laws.

How to Apply for the Liquor License?

Application processes vary by state but generally involve submitting detailed forms to your state's alcohol beverage control board, undergoing background checks, and possibly attending hearings.

Official Fee

The cost varies significantly by state and the type of alcohol you plan to serve. Fees can range from $300 to $14,000 annually.

Conclusion

Starting a restaurant requires several important licenses and permits to ensure legal compliance. From a basic Business License to a Health Operational Permit and even a Liquor License if you plan to serve alcohol, each document plays a crucial role in running your business smoothly. While the application process and fees vary by state, getting these permits in order from the start will save you from legal trouble later.

Make sure to check with your local authorities for specific requirements, and don’t hesitate to seek professional help if needed. Once you have everything in place, you can focus on what truly matters—serving great food and creating a successful restaurant!