Running a small business in Australia is a common choice for many new migrants, and opening a restaurant is especially popular. Today, NS Legal shares with you the 5 key legal points every restaurant owner needs to understand before opening.
1. Health and Safety
As a restaurant owner, first and foremost, you need to ensure your business complies with Australia’s food and safety regulations. All restaurant operations must comply with the Australia New Zealand Food Standards Code (FSANZ).
In addition to the owner understanding food safety, restaurant staff must also receive food handling and safety training. In Australia, jurisdictions such as the ACT, NSW, SA, QLD and VIC require by law that restaurants have a designated food safety supervisor. This supervisor must hold a food safety certificate, and the role is typically filled by the restaurant manager or head chef.
2. Permits and Licences
First, operators must ensure they have a business licence issued by the local council. Permits vary by state, so operators should check the specific requirements in their state. In addition, permits and licences also differ depending on the restaurant’s circumstances.
For example, if a restaurant wants to operate an outdoor area, it must obtain the relevant permit. Similarly, operators must hold the appropriate licences to sell alcohol or food from a food truck or stall.
3. Employment Law
Before running a restaurant, operators must make sure they understand the relevant employment laws. For example, operators must pay restaurant staff in accordance with the applicable industrial award and employment regulations. These regulations also set out standard working hours, employee rest entitlements and leave entitlements. Restaurant owners should also be aware that pay records must be kept, and failing to do so can result in fines.
Putting adequate employment policies in place that comply with legal requirements will help reduce the risk of any disputes related to employment law.
4. Insurance
The nature of the restaurant industry and the high-risk working environment mean insurance will be a critical part of operating safely. Taking out suitable insurance can help prevent future legal disputes and potentially significant financial losses. Some key areas restaurant insurance may cover include:
Public Liability Insurance:
This protects the restaurant’s interests in the event a customer is injured or property damage is caused.
Building and Contents Insurance:
This type of insurance covers damage to the building itself or to any commercial equipment, records or furniture.
Business Interruption Insurance:
Business interruption insurance can help protect against unexpected disruptions to the restaurant’s operations, such as fire or other property damage.
Management Liability Insurance:
Management liability insurance protects the restaurant operator in the event of disputes arising from business management.
Understanding all the insurance options available for a restaurant can ensure the operator is properly protected.
5. Commercial Leases
Another common legal issue restaurant owners may face relates to commercial leases. Understanding the commercial lease and the operator’s rights as a tenant can help avoid these problems. Before signing a commercial lease for a restaurant, operators should consider:
Whether they are able to renovate the interior space to suit the needs of the restaurant’s operations;
Who will be responsible for any necessary maintenance;
Who will be responsible for outgoings and other similar charges; and
Under what circumstances the operator may terminate the lease.
A thorough understanding of the terms of a commercial lease puts operators in a stronger negotiating position and helps ensure the terms are more favourable to them as the tenant. One of the best ways to make sure you understand the terms of a lease agreement is to seek advice from a qualified lawyer.
Final Thoughts
Overall, before opening a restaurant, operators need to consider these 5 areas: health and safety, permits and licences, employment law, insurance, and commercial leases. Operators considering this path are advised to seek professional legal advice before making a decision, to avoid potential crises down the track.
