Top Legal Considerations That You May Encounter While Setting Up A Hotel/Restaurant Business


Buying a restaurant is in all, a dreamy affair that many of you might have on your bucket list. But purchasing and running a successful restaurant is not easy as one may suppose it to be. It comes with lots of ups and downs and social responsibilities to shoulder that are far beyond the love for food.

Right from the very first day, you put your first step ahead for starting up restaurant business; you come across various legal matters to cater to. Complying with the rules and legal matters stands of paramount importance, and failure to its compliance can end up in cancellation of license and imposition of penalties.

Thus it is mandatory for every owner to be well versed with all the mandates to play fair in the market. But what are the legal issues that you may encounter while paving your roadmap to a successful restaurant? Here we pen down a few legal matters that one may stumble upon while purchasing a restaurant:

Space leasing

If you do not have enough capital to invest in buying a new restaurant, you would consider leasing space for the same. Also, in some cases, there may arise a need of doing renovations in order to enhance the space. Along with the renovation, again comes the need for investing some hard-earned money for the space upfront.

When one tends to spend such an upfront on a space, he/she would definitely like to prevent their tendency to keep their business functioning for long for an undetermined period. This calls for a long-span lease agreement, which presents the lease terms, a rent hike, and other clauses in black and white.

A lawyer who holds experience in this specific niche can be hired for the same to protect the interests of the tenant.

Acquiring all the licenses

In order to run a restaurant, the owner at first needs to add on to their kitty a series of licenses and clean chit from different departments to seek a permit for business operations.

Ranging from a business license to a health department permit to a food safety certificate, the owner needs to collect them all to be eligible for running a restaurant business.

Tax problems

When you plan to buy an already existing restaurant, you may definitely find yourself thinking about why the previous owner planned for a sale. There may be various reasons for the same. Ranging from personal problems to financial emergencies, losses, and even tax problems. The reason can be anything, with payroll taxes being one of the most common causes.

Hence, make sure that you watch out for any such legalities and penalties that might be due on the property you are planning to buy. Hiring an attorney who can help you find the same and get you a clear picture of all the legal records and their standings can help you from saving yourself from transforming your holy grail into a nightmare.


Restaurants are highly dependent on insurance policies in lieu of covering various types of risks that may arise due to serving food, public dealing, serving alcohol, and hiring workers.

Getting connected with an insurance agent who chalks out a proper package for dealing with risks that comes associated with restaurants is of paramount importance in order to seek protection from any kind of risks that may come uninvited.

Liquor license

With alcohol and booze parties trending these days, more and more restaurants are trying to accommodate people who wish to throw a cocktail party. May it be serving alcohol within the property premises or selling alcohol, in both cases, you need to acquire an alcohol license to fledge your customers with alcoholic beverages.

Whether you are buying a new restaurant or constructing a new one, you have to apply for a liquor license to give your guests some booze treats. Even if you are purchasing a restaurant from its owner, the existing liquor license may not be transferred in your name easily, and you may be required to apply for one.

There are various rules and regulations that govern the same; thus, hiring a lawyer from an ABC license law firm who can help you cross the hurdles of getting a license is a wise move to get things falling at the right place.

Workforce legal concerns

The workforce defines the success of any enterprise, and the hotel and restaurant industry is no exception. There are various rules regarding the work schedule, week offs, overtime, and post-work schedules in favor of the employees, which have to be adhered to by every employer.

Also, there are pay slabs and minimum wage benchmarks that have to be strictly followed as per the rules of the country in which one has set up a hotel. So make sure that you gain a thorough understanding of all such practices so that you do not land up in trouble in the future.


The location is one of the primary things to consider in determining the success and profit graph of a restaurant. The importance of location is no more a mystery but while choosing a place of your preference, make sure that you do not just fall for the beauty of the place.

Instead, consider finding out the local zoning rules and laws that govern the place and ensure if the property can be used for commercial purposes. The rules may vary depending on the place and country where you are planning to establish a hotel or restaurant.

But before you simply gush with the construction and renovation, make sure that your property is legal for commercial use to ensure smooth operations.


Purchasing or leasing a hotel or restaurant is enough to break your bank and can drain out your hard-earned money in a quick wink. And, we are pretty sure that no one would like to invite any kind of trouble while doing the same, right?

Thus we would suggest you get an experienced attorney by your side who can guide you through all the thick and thins of your hotel purchase to revamp your dreams into reality.


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