Restaurant Legal Basics

Four Areas Restaurant Owners Should Understand

Understanding laws and Insurance are an important aspect of owning a restaurant.
There are many laws and insurance regulations that restaurants need to follow. Stock Snap via Pixabay

Running a restaurant involves far more than just serving food and drinks. Restaurant owners and managers are responsible for everything from employee safety to liquor liability. Insurance, licenses and safety procedures are just a few of the areas that restaurant owners should be familiar with. Most insurances and licenses need to be in place before a restaurant can open. There are also many laws that apply to running a small business - including ever changing labor laws.

 It is vital that as a restaurant owner, you know these laws.  Ignorance is not an excuse if you inadvertently break a law. The fines and penalties can be quite significant. 

Restaurant Liquor Licenses

The sale of alcohol can boost restaurant profits, because liquor and beer have great profit margins and low labor cost (it’s a lot easier and faster to prepare a martini than a hamburger with fries). However, selling alcohol comes with responsibilities. States don’t want just anyone selling liquor. Therefore they require restaurants and businesses to apply for a liquor license.

Federal and State Laws for Restaurants

As a restaurant owner, it is your responsibility to familiarize yourself with state and federal employee laws, such as those pertaining to minimum wage, overtime, and tips. Here is a basic overview of employer responsibilities, which every new restaurant owner should be familiar.

Failure to comply with these rules can result in hefty fines from local, state and federal authorities.

Restaurant Insurance Basics

One area in the restaurant business you do not want to skimp is insurance. Insurance can protect you and your business for a myriad of problems, from broken equipment to liability lawsuits.

Depending on where you live, you will need certain types of insurance for your restaurant. You will also need to carry certain types of insurance to satisfy your bank loans and mortgage.

How to Serve Alcohol Responsibly in a Restaurant

Any restaurant that serves alcohol should have its staff trained in the TIPS program. This program teaches staff how to know if a patron has had too much to drink and how to deal with drunk customers. It can help protect a restaurant owner from potential lawsuits stemming from alcohol related accidents. Some states, such as Utah, require that all employees who serve alcohol undergo some type of training.

Opening a new restaurant is very exciting. However, it is still important to make sure that everything is legal and legitimate. As a restaurant owner, you will save yourself a lot of headaches (and money) later on, by understanding the current rules and regulations of the food and beverage industry. Paying special attention to the highly regulated areas of alcohol service and labor laws will help ensure that your restaurant doesn't get into hot water in the future.