Zoning and building permits
Before signing a lease or purchasing a property, it's worth confirming that the location is zoned for restaurant use. Even when restaurants are a permitted use within a given zoning category, local rules may place restrictions on aspects of the business, such as outdoor seating, late-night hours, or parking requirements.
- Zoning and land use. Zoning compliance is often verified as part of the standard business license or building permit review. If the intended use doesn't conform to existing zoning rules, special approval, such as a variance or conditional use permit, may be issued.
- Building permit. This is required to construct or renovate a restaurant space, authorizing work to ensure compliance with local building, safety, and trade codes.
- Certificate of occupancy. This confirms that the space meets safety and building codes for its intended use and can legally be occupied.
Health and food safety permits
Health and food safety requirements ensure that a restaurant's facility, equipment, and staff meet standards for safe food handling. These typically involve both an operating permit for the business itself and separate certifications for individual employees.
- Health/food-service permit. Depending on the jurisdiction, this permit may be called a food service establishment permit, retail food facility license, or health permit. Issued by the local health department after a pre-opening inspection, it requires ongoing compliance through periodic, unannounced inspections.
- Food handling and safety permit. This applies to individual workers rather than the business. It is obtained by completing a food safety course and exam.
- Allergen awareness training. Some states require food service staff to complete training on identifying, managing, and preventing cross-contact with major food allergens.
Fire safety and accessibility
Restaurants are subject to fire code and accessibility requirements aimed at protecting both staff and customers.
- Fire department permits. Issued and enforced by the local fire marshal, these permits confirm compliance with life-safety codes, including occupancy limits, fire extinguishers, emergency exits, and general safety compliance.
- Hood/suppression system permit. Kitchens with a ventilation hood over cooking equipment may need a separate permit and inspection for the fire suppression system installed above it.
- Place of assembly permit. Restaurants that exceed a certain occupancy threshold may need this permit, which addresses capacity limits and emergency egress.
- Alarm permit. Required in some jurisdictions for businesses with fire or security alarm systems, often tied to registering the system with local authorities.
- ADA compliance. Restaurants are required to meet Americans with Disabilities Act standards covering accessibility, including entryways, restrooms, and seating areas.
Employment compliance
Restaurants with employees take on a separate set of registration and insurance requirements, in addition to the EIN already obtained during business and tax registration.
- New hire reporting. Employers are required to report newly hired and rehired employees to a state directory, often maintained by the Department of Revenue or a similar agency, within a set window after the hire date.
- Income tax withholding. Employers must register with federal, state, and (where applicable) local tax authorities to withhold income tax from employee wages. Federal income tax withholding is mandatory nationwide, while state income tax withholding applies only in states that levy a personal income tax. Certain cities and counties also require separate local tax withholding.
- FICA (Social Security and Medicare) withholding. Employers are required to withhold Social Security and Medicare taxes from employee wages and pay a matching employer contribution, in addition to any income tax withholding.
- State unemployment insurance (SUI). States require employers to register for a state unemployment insurance account and pay SUI taxes.
- Workers’ comp insurance. Most states require workers' compensation coverage once a business has at least one employee.
Exterior and environmental permits
Restaurants making changes to a property's exterior or generating environmental by-products may need additional permits.
- F.O.G. (Fats, Oil, and Grease) permit. Restaurants that produce grease or oil waste from cooking are often required to install and maintain a grease trap and maintain a F.O.G. permit to regulate wastewater disposal and protect municipal sewer systems.
- Sign permit. To protect the character and safety of the local community, your city may have certain restrictions on the type of sign and its size, location, and lighting.
- Outdoor dining permit. Needed for restaurants offering sidewalk, patio, or other outdoor seating, particularly when it extends onto public property.
- Dumpster placement permit. Required in some jurisdictions to place a dumpster on the property or adjacent public space, often addressing placement and screening requirements.
- Air quality / environmental permit. Applies to restaurants with significant emissions from cooking equipment, such as heavy grilling or smoking, and may require ventilation or filtration systems that meet local air quality standards.
Specialty and conditional permits
These licenses and permits apply based on a restaurant's specific offerings or services.
- Liquor license. Required for restaurants serving beer, wine, or spirits. Licensing is often tightly regulated and may involve quotas, lengthy approval times, or significant fees, depending on the state.
- Music license. Playing music in a public setting, whether recorded or live, typically requires a license from a performing rights organization such as ASCAP, BMI, or SESAC. This is a private copyright requirement rather than a government-issued permit, and operating without one can expose a business to legal liability.
- Catering license. Needed for restaurants that prepare and serve food off-site, such as at private events.
- Cabaret license. Required in some cities for venues with open dance floors or nightclubs.
- Live entertainment license. Required for venues hosting live performances, such as music, comedy, or DJs.
- Valet parking permit. Needed for restaurants offering valet service, particularly when it involves the use of public streets or curb space.
- Weights and measures permit. Required for businesses that sell food priced by weight, ensuring commercial scales are accurately calibrated.
Keeping up with restaurant licensing compliance
Obtaining the necessary licenses and permits is not a one-time task. Most require periodic renewal, and many are tied to inspections that must be passed again on a recurring schedule, whether annually or at another set interval.
Business changes can also trigger the need for new or amended licenses. Relocating to a new address, changing the business's corporate structure, adding a new offering such as alcohol service or outdoor seating, or bringing on employees for the first time can all require updated paperwork, even if the restaurant itself hasn't changed significantly. Local and state governments can also introduce new requirements over time, which may apply to restaurants already in operation.
It's worth designating someone to track renewal deadlines and monitor for any changes that could affect the restaurant's licensing, so the business stays in compliance as requirements evolve.
For information on how to create a license compliance plan, read The six steps of business license compliance.
Consequences of noncompliance
Operating without the appropriate permits, or with one that has expired, exposes a restaurant to penalties at both the state and local level. These can range from fines and cease-and-desist orders to, in more serious cases, criminal penalties such as probation or jail time.
Enforcement has been on the rise in recent years. Municipalities, counties, and state agencies increasingly rely on unannounced health and fire inspections, and in some cases partner with third-party compliance services, to identify businesses operating out of compliance. With such severe penalties, it is crucial that restaurant businesses obtain and maintain the appropriate licenses.
Learn more
Navigating restaurant licensing requirements can be complex, particularly for businesses operating in multiple locations or jurisdictions. Contact CT Corporation's business license team to learn more about how we can help.
