In recent years, the restaurant landscape has changed with the rise of food delivery options, leading to the emergence of cloud kitchens and dark kitchens. This has sparked curiosity among restaurant owners about the legal requirements involved. Moreover, there have been updates and changes to food business regulations, such as the new food safety standards being introduced at the end of 2023. All these changes can be concerning for those looking to start a restaurant business in Australia. In light of this, this guide serves to provide a detailed overview of the essential licences and permits needed to operate within the law.
Read on to ensure your business is set up for success from the outset and can thrive under any hurdles.
Legal Landscape for New Restaurants
The legal landscape for food businesses, including traditional setups and modern business models like cloud and dark kitchens, may seem complex. Starting a restaurant or café in Australia inevitably requires compliance not just with national regulations but also with local laws. It’s also imperative for owners to acquire a number of essential licences in order to get the business running. Follow the information below to understand the legal requirements better and ensure a smooth start for your restaurant venture.
Choose the Right Legal Structure for Your Restaurant
Before diving into the specifics of permits and licences, deciding on the appropriate legal structure for your restaurant is crucial. This decision will influence everything from your tax obligations to your personal liability and the way you can raise funds. Consider whether you aim for a traditional restaurant setup or a delivery-only cloud kitchen business without a front store; you can choose one of the following structures for your restaurant
- Sole Proprietorship: A simple form of legal structure for a restaurant with a single individual owning it.
- Partnership: A form of legal structure that involves at least two people or more being in charge of the business.
- A Limited Company: This means the restaurant business can have a single legal entity that allows ownership to be transferred, and there can be multiple shareholders to invest for expansion and growth.
Choosing the right legal structure will determine the level of control you have over the business and its operations and potentially affect the licences you need to acquire. A traditional restaurant setup may look for multiple investors; thus, a limited company can be a suitable choice. Meanwhile, those who look to start a delivery-only cloud kitchen business usually look for minimum overhead costs and lower-budgeted and streamlined operations; both sole proprietorship and limited company structures can be suitable options.
Obtaining a Certificate of Occupancy
A Certificate of Occupancy verifies that your restaurant premises meet all building codes, zoning laws, and government regulations, making it safe for operation. This certificate, essential for any building constructed after 1 April 1976, outlines the building’s class, permitted uses, maintenance requirements, and fire safety protocols. Not only does it serve as a green light for opening your restaurant, but it also reassures customers about the safety and legality of your establishment. Failure to obtain this certificate could result in significant legal and financial repercussions, hindering your restaurant’s ability to operate.
Acquire License and Permit
Navigating local council approvals is another critical step. This may include securing building, food preparation, accommodation facilities, outdoor dining and environmental health approvals, alongside a lease agreement if you’re renting your premises. Additionally, a trade waste agreement with your local council ensures that your restaurant adheres to waste management regulations. These permits are not just bureaucratic hurdles; they ensure your restaurant contributes positively to the community’s health and environment. Engaging early and often with local authorities can facilitate a smoother approval process, allowing you to focus on the culinary experience you wish to offer.
Securing a Food Service License
The initial step in securing a food service licence involves registering your business with the local council, as the rules and regulations vary significantly across different regions in Australia. To comply with local health and safety standards, any business that handles food intended for sale must notify the proper authority. This encompasses a wide range of establishments, including:
- Restaurants
- Pubs
- Cafes
- Mobile food units
- Hotels
- Community organisations
- Charities that serve food
Australia classifies food businesses differently in each state and territory, affecting their specific food business classification to obtain the appropriate licence. Suppose you choose to open a restaurant from a cloud kitchen setup. In that case, it’s important to note that a cloud kitchen is similar to a traditional restaurant in that they are both food businesses with fixed premises. Therefore, it’s essential to understand that opening an eatery operated from a cloud kitchen virtually requires the same licences as a conventional restaurant.
Obtaining a Food Handling Permit
To obtain a food handling permit in Australia, restaurant owners need to comply with the Food Act and the Australia New Zealand Food Standards code. It is recommended to get in touch with the local council and speak to an Environmental Health Officer to ensure compliance with food safety laws. Additionally, all food safety supervisors must have completed certification in specific competencies. This certification is obtained through a Registered Training Organisation (RTO), ensuring that supervisors have the knowledge and skills to oversee food safety practices effectively.
Acquiring a Liquor License
If your restaurant plans to serve alcohol, obtaining a liquor licence is necessary. This process can vary significantly depending on your location, such as which states your business will be in and the type of alcohol service you intend to offer. If you plan to set up a cloud kitchen for your delivery business, a packaged liquor licence is likely required for offsite consumption. It’s important to note that securing a liquor licence is not only a legal requirement but also an opportunity to enhance your restaurant’s dining experience. For a ghost kitchen or cloud kitchen delivery business, it allows for a broader offering, appealing to a wider customer base and increasing revenue potential.
Conclusion
Starting a restaurant in Australia involves a complex array of legal requirements, from choosing the right business structure to obtaining the necessary food service licences and handling permits. By understanding and complying with these requirements, you can ensure that, no matter whether you are going to open a conventional dine-in restaurant or a cloud kitchen food business without a storefront, your restaurant can operate legally and successfully.
Sources:
Skills and knowledge for food handlers
Everything You Need to Know about Starting a Food Business
https://blog.foodsafety.com.au/everything-know-starting-food-business
Building certificate of occupancy
Start a food business
https://business.vic.gov.au/business-information/start-a-business/start-a-food-business
Accommodation and food services industry
https://business.gov.au/planning/industry-information/accommodation-and-food-services-industry