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Important restaurant regulations to know when running a restaurant business

Kim Mercado image
By Kim Mercado
Jul 27, 2021 min read

Running an eatery can often be complicated. Restaurant regulations are tightly monitored by state and city authorities. Even the most diligent of owners can miss an important rule and end up fined or shut down.

Thankfully, there are many resources available to you as you start your restaurant. 

Here's an overview of some of the most important restaurant regulations when starting or running a business. Of course, even when the city is happy you've met your obligations, you still have to care for customers at the end of the day.

Who oversees restaurant regulations? 

Various regulatory government agencies oversee different aspects of your business. Here are the main agencies, which typically have a state or local city and county counterpart:

  • Food Safety and Inspection Service (FSIS). The FSIS is a public health agency in the U.S. Department of Agriculture, overseeing the nation's commercial supply of meat, poultry, and processed egg products.
  • Food and Drug Administration (FDA). The FDA protects public health by assuring that foods — other than meat, poultry and egg products — are safe for consumption. They also have outlined food service codes and regulations for every state.
  • Occupational Safety and Health Administration (OSHA). OSHA, an agency run by the Department of Labor, oversees employees' health and safety regulations.

You can contact your local health department for assistance. Specifically, they can tell you about local laws and provide a step-by-step guide for what's required in your city. 

Space regulations: zoning and construction requirements

The restaurant laws surrounding your physical space involve the building and renovations. Specifically, you need to consider:

  • Municipal zoning laws
  • City entertainment by-laws, specifically hours of operation, alcohol and noise
  • Construction permits 
  • Permission from city to develop a new site
  • Licensed construction teams

You may have already signed a lease or even purchased the building. But you likely have to complete renovations to make it functional as a restaurant. 

At this stage, it's important to look at restaurant laws and city regulations, so you know what you have to do. Here are some common requirements:

  • The building is zoned for use as a restaurant
  • The area allows for an activity that coincides with your business hours
  • You can have outdoor seating, alcohol, and entertainment

You should review these requirements as early as possible. After all, you don't want to be open your first week and then discover you’re not allowed to serve alcohol on the patio or that patrons have to park three blocks away. 

During construction

Once you have the space, you have to build it up the way you want to. That means hiring the right designers, engineers and contractors to do the job. Find businesses that are licensed and can keep your project on schedule. 

During the construction phase, you need to comply with city inspection requirements. You may need to get approvals at several different stages. Some cities may ask you to submit your development plans for approval before construction even starts. 

Administrative regulations: business licenses and inspections

Both the city's health department and planning department will want to have a say in your restaurant. When you open your doors, you'll have to continue to keep the area up to code in terms of business and health standards. If you don't pass these inspections, the city may close the restaurant for public health concerns.

You'll likely have to obtain several licenses. These are permissions from the city to carry on the restaurant's activities. Here are some examples of permits or licenses you may need:

  • Business operation
  • Alcohol
  • Live entertainment
  • Food service
  • Building occupancy
  • Employer identification number
  • Employee health 

This is just a sample list to explore; some counties have unique requirements. For example, you need to have a license to put a pool table in your food service establishment in some places. It's a lot to think about, in addition to the restaurant startup costs you'll have to cover. 

In addition, you may have to renew your licenses regularly. For example, you may need to renew a liquor license annually. 

Also, just getting the license doesn't mean you automatically keep it forever. Many licenses come with additional requirements. Staying in compliance is a big part of how you run your business, so carefully review what you have to do to keep your license.

In your rush to keep the authorities happy, don't forget to protect yourself as well. Business insurance can offer coverage in case you experience unexpected mishaps. You can get industry-specific protection with restaurant insurance that's appropriate for your business. 

Food preparation regulations: health and safety

Your city wants to ensure your restaurant complies with health and safety standards. These restaurant regulations are in place to protect patrons and staff. Among the rules to know and follow are:

  • Cleanliness and food safety to prevent foodborne illness
  • Physical safety of employees and patrons
  • Protections against hazardous materials 

You have to prepare for a surprise restaurant inspection at any time. Because the city oversees the health and safety of patrons, restaurant rules and regulations often permit them to do random checks of the kitchen and the full establishment. 

Things can get busy when running your eatery, but having policies and procedures in place helps maintain a high level of cleanliness and superior standards in food handling, storage, and preparation. 

For instance, some counties require every person who comes into direct contact with food to get a food handler license. This could include employees who serve food in the dining area. Most states require that at least one manager on staff be certified in food safety or food protection.

Management regulations: labor laws

As a restaurant owner, you are also an employer. Restaurant labor laws apply to servers, food preparation staff, and anyone on your payroll. They may include:

  • Hours of work, wage laws, required breaks
  • Rules around hiring and firing

By following these rules, you won't risk getting fined by the Department of Labor. Since some eateries are late-night establishments that serve alcohol, there may be additional government regulations to keep your staff safe. 

As part of your business licensing process, you may be required to learn how to prevent workplace accidents or obtain workers’ compensation insurance

Following restaurant regulations and maintaining compliance

Despite all of the regulations involved, running a restaurant can be a fulfilling and lucrative experience. With the right preparation, you can make the dream a reality. 

In most states, being properly licensed and insured is essential to operate a restaurant. NEXT Insurance offers customized restaurant insurance packages that make it easy to get the coverage you need to protect your small business. From general liability to workers’ compensation and more, you can mix and match policies to get the right-sized coverage.

You can see your policy options, buy coverage and get your certificate of insurance in less than 10 minutes, all online. If you have questions, our licensed, U.S.-based insurance professionals can help.

Get your free quote today.

Kim Mercado image
By Kim Mercado
Kim Mercado is the managing editor of NEXT's small business blog.
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