Licenses and permits needed to open a restaurant

Editorial Team

5 min read
Restaurant owner looking at laptop

If you plan on opening a restaurant in any U.S. state, you’ll need to have many permits and licenses in place before serving your first customer. In fact, you may even need these permits before you can even start designing floor plans or hiring employees.

Because licenses are legally required, not having them could lead to serious fines – and even permanent closure. Make sure you start the application process at the same time you begin writing your restaurant’s business plan.

What licenses and permits are commonly needed?

Below is a summarized breakdown of 12 common licenses and permits needed to open a restaurant. Note that these requirements are different from registering your business or filing taxes.

1. Business license

Normally issued at the municipal or county level, a business license grants you permission to operate within your geographic service area. Because the exact application steps vary by location, you’ll need to do an online search of your city’s name, plus “restaurant business license.” Expect to pay anywhere from $50 to several hundred dollars for the initial application. Some jurisdictions also charge annual renewal fees.

2. Certificate of occupancy

This permit verifies that the building containing your restaurant is properly maintained and up to code. A restaurant in a newly built mall may not face as many difficulties applying for a certificate of occupancy as a restaurant trying to open in a renovated historic building. You’ll need to Google “certificate of occupancy + [your state]” for exact application steps and costs.

3. Food service license

Issued by your city or county’s health department, this license verifies that your restaurant has passed all relevant food safety inspections. For steps on how to get a food license in your area, contact your local health department or use the FDA’s online database. You can expect to pay between $100 and $1,000. Just remember that both the fees and inspections for a restaurant food license are recurring.

4. Food handler’s permit

Think of this permit as a food safety certification for your employees, instead of for your building. This permit verifies that everyone on the team who handles food has undergone sufficient training in proper sanitation, storage, and prep. You can find the local application steps for your state here. Fees range from a few dollars to several hundred dollars.

5. Building health permit

If you will be constructing a new restaurant from the ground up, you may need to secure a building health permit certifying that it was properly built to code and complies with safety and sanitation laws. To find the exact application steps, Google “building health permit + [your state].” Fees range depending on the size, age, and location of the building.

6. Sign permits

Before putting up any signage on the outside of your restaurant, you’ll need to secure permission from local agencies first. Each jurisdiction has its own application process and cost, along with different regulations for sizing and location. Again, you’ll need to Google “sign permit + [your county]” for exact steps.

7. Seller’s permit

Also known as a “sales tax license,” this permit allows you to collect sales tax when selling to your customers. For application steps, contact your state’s tax authority or use this interactive state-by-state guide. Fees range from $0 to $100, depending on the jurisdiction.

8. Resale permit

With this permit, you don’t have to pay sales tax on any ingredients or inventory used to prepare meals ultimately purchased by customers. This prevents double taxation of the same food staples. The application steps vary by state.

9. Food vendor license

If you plan on operating a food truck or selling prepared meals at farmers markets, local fairs, and other public events, you’ll need a food vendor license. This is true even if off-site meals only constitute a tiny portion of your business. The FDA has a state-by-state breakdown of the different agencies to contact on how to get a food vendor license. Expect to pay anywhere from $100 to $1,000, depending on your home state.

10. Liquor license

Are you planning on selling alcohol? Then having a liquor license is mandatory – with some states also requiring separate licenses for wine and beer. For exact application steps, visit your state’s alcohol control board. Some jurisdictions only charge a few hundred dollars, while others (e.g., California) charge thousands of dollars.

11. Dumpster permit

Restaurants generate a lot of waste, which leads to the need for municipal permission to use nearby trash receptacles. To apply for a dumpster permit, contact your city’s public works or sanitation department. The cost can vary depending on your area and the amount of time the dumpster will be at your location; however, be prepared to pay up to $400 a month for legal access to the closest dumpster.

12. Entertainment license

If your restaurant features live acts or recorded music, you may need to obtain an entertainment license. The American Society of Composers, Authors and Publishers (ASCAP) may require that you pay an annual license fee costing between $1,000 and $7,000. This nonprofit group protects the rights of songwriters and composers whenever their music is either publicly performed live or recorded and played from a stereo, jukebox, or DJ booth. There are many different types of general licenses depending on your establishment’s needs, so don’t let this scare you off from offering a fun and enjoyable atmosphere for your customers.

If you’re like most restaurant owners, you’d rather be in the kitchen or interfacing with customers rather than filling out legal forms and paying application fees. Although securing the permits needed to open a restaurant isn’t fun, it’s an important part of starting a small business. It’s worth building a solid foundation from the start so that your restaurant avoids any unnecessary legal headaches in the future.

Do you have questions about accepting payments at your restaurant or managing your business? Our Clover Business Consultants are always available to help. Connect with our team today.

This information is provided for informational purposes only and should not be construed as legal, financial, or tax advice. Readers should contact their attorneys, financial advisors, or tax professionals to obtain advice with respect to any particular matter.

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