Sponsored by Avalara
In the foodservice industry, one key to success is the ability to adapt to change. That includes not only keeping up with consumer trends and new flavors, but also the back-office work of maintaining a multitude of licenses, permits, and certifications. As restaurants add everything from a patio to liquor to keep up with evolving guest demands, operators also must make certain they are aware of and comply with the requirements from a variety of entities.
That is not easy in the current environment of labor shortages, rising costs, and changing laws. Managers do not have the time to research how to get approval to add outdoor seating or understand the steps they need to take to launch live entertainment. Even operators seeking more routine licenses such as adding a liquor license to an existing location might not know how to find all the requirements for that jurisdiction.
Restaurants that do not comply with regulations run the risk of fines and other penalties, and in extreme cases, can be shut down. “Business license compliance can sneak up on a company very quickly,” says Vicky Basile, business license solution consultant for Avalara. “Being non-compliant can severely impact a company’s ability to do business and earn revenue.”
New offerings, added challenges
When a restaurant opens, the business must apply for several licenses at the state, county, and municipal levels. Operators need to acquire these licenses, and the specific license can vary by jurisdiction. In many states there are state-level license requirements, but in most cases the operator also has to comply with city or town requirements as well. Jurisdictions might issue different licenses for restaurants depending on whether the place will have seating or is takeout only, and a separate license if the establishment adds a food truck. There is also the important issue of getting a liquor license if the restaurant serves alcohol which can involve multiple licenses across various governing bodies.
Things change over time, and the operator might want to renovate, add services, or overhaul the eatery’s concept. One might want to make a big change such as adding a bar or live entertainment or make a small change such as installing outdoor signage. A longtime restaurant owner might want to downshift and offer catering only or move to a shared food hall instead of a standalone location. Some changes are temporary, such as applying for a permit to host an outdoor food event. All these changes may impact a restaurant’s licensing needs and compliance requirements. Understanding these impacts prior to making a change could be the difference between a smooth change and a big hassle.
Government agencies can also add or change the requirements that businesses must follow. During the pandemic, many restaurants added makeshift patios and built takeout windows, pivots that were typically allowed because local requirements were put on hold. Many governing entities have since reverted to the pre-pandemic rules, and some businesses had to remove the patios or apply for permits.
Streamlining the process
For foodservice operators, the first step is to go online and research which licenses they need for every location and in every jurisdiction where they operate, an arduous process that takes time away from tasks such as hiring and managing crew members and preparing and serving menu items. After determining which licenses are necessary, operators must apply for the licenses, pay the fees, submit the application, and hope they completed all the steps correctly and sent the payment to the right authorities.
The business owners also must keep up with new regulations, which might take affect long after being announced. Even after the operator successfully licenses the new location, patio, bar, or other addition, they must manage and renew their licenses per the requirements, which can also vary by license and jurisdiction.
Automation can help. “Digitizing and automating the process of renewing, managing, and applying for business licenses greatly improves a company’s compliance, efficiency, and peace of mind,” Basile says. “Imagine a platform that can securely store all your license data, usernames, and passwords for online filings, copies of all your licenses, and applications as well as your correspondence providing you a single source of truth for all things business licenses.”
Partnering with a third-party expert like Avalara to manage the business license portfolio can help streamline research, applications, renewals, and other compliance-related processes. Avalara offers business compliance software and services that help business owners understand which licenses they need, how to fill out applications, how to file the applications, and how to manage their license portfolio on an on-going basis.
For more information, visit www.avalara.com/us/en/products/business-licenses.html.