7.6: The Physical Location

Understand the complexity of adapting a facility into the restaurant you desire. The following checklist is useful in evaluating a prospective facility for all of basic elements needed to operate a foodservice establishment. The ‘building’ has to meet planned specifications of the operation or you must have the ability to make necessary changes to the structure. An additional way to assess the structure includes any ‘protection’ in place at the time of purchase or lease. This speaks directly to the insurance cost you will incur. A structure located in a marginal neighborhood will appear less safe to an insurance company and thus, your costs to insure will increase proportionately.

Most restaurants will require a combination of 110 volt and 220 volt three-phase connections. If three-phase power does not exist at the structure this is a difficulty. If this form of power were not available to the structure, this situation would be a ‘deal breaker’. Generally, the rule of thumb for restaurant power needs is as follows; if the piece of equipment sits on a table or stand, it probably uses the 110-volt outlet. If it stands alone, it will probably require 220-volt three-phase power to operate properly. Always consider the ‘type’ of business occupying the structure prior to you. If the business was not a restaurant, the structure will probably be lacking in utilities, air conditioning, plumbing, and fire suppression equipment. The location of restrooms may also be of concern.

If you are uncertain about the ‘permit’ or ‘operational’ condition of the building, it is always best to walk the facility with the Health Department or Fire Marshall to become aware of possible changes you may have to make to operate. Change in laws are a factor in both instances. It is better to be aware upfront than to borrow money to make the structure operational only to find that health codes or fire requirements will require additional changes and costs. Use the following items as a ‘checklist’ when inspecting a potential location for its suitability and adaptability.

Facility Checklist

Important elements for inclusion in any site checklist begin with the building and land itself. Further, what utility connections exist? If the building was not operational as a restaurant by previous tenants, utility connections, the HVAC system, and fire suppression need to be top of mind for consideration. These elements are typically not powerful enough to sustain the facility in operational mode as a restaurant. Look closely at all aspects of the structure and its amenities, consult with the fire marshal, the department of health, and utility company providing service to determine what you will need to do in terms of changes, adaptations, or inclusion to move forward. If a facility is lacking in certain areas it does not mean that you cannot pursue the location. It is important to know up front what changes you must make and the costs you will incur to do so before you finalize funding.

Buildings and Land

• Location of buildings.
• Indicate type of construction
• Age
• Condition
• Obtain site plans or plant area layouts and photographs, if available
• Ownership of buildings. (If leased, what are terms?)
• Ownership of land. (If leased, what are terms?) Mortgages or other liens on buildings and land. Give details.
• Utilization of each building by activity.
• Land included in site or sites. Indicate percent not currently utilized.
• Housekeeping outside and inside of buildings.
• Description of area surrounding site or sites.
• Availability of land and buildings for expansion.
• Plant maintenance expenditure for each of last 3 years at each site.

Utilities and Services

Evaluation of requirements for and availability of utilities and services such as:

• Power
• Gas
• Light
• Telephone
• Heat
• Air Conditioning
• Water
• Public Transportation

Facilities Protection

• Adequacy of fire-fighting facilities.
• Unusual fire hazards.
• Flood hazards.
• Explosion hazards.
• Theft or burglary problems.
• Security measures required.

Description and condition of site equipment and services

Such as:

• Elevators
• Vaults or safes
• Cranes
• Compressed air supplies
• Parking facilities
• Lavatories
• Shipping and Receiving facilities
• Employee locker rooms
• Employee Recreation facilities
• Special equipment or services

General Evaluation of Facilities

1. Appraisal of utilization of facilities.
2. Improvements needed.
3. Adequacy of facilities to meet local community requirements.
4. If Company acquired, facility relocations contemplated.
5. Degree to which company’s facilities meet our requirements.
6. Estimated value of facilities. Indicate basis of estimate.

Legal Regulations

There is no universal checklist for all of the necessary licenses, permits, inspections, postings, and signage for your new restaurant. These requirements vary greatly between states, cities, restaurant types, and even counties and neighborhoods. The experts that you hire to help you -- specifically your designer, architect, and contractor -- will help you get through everything, but you will need to be an active part of the process and take on responsibility as well. Here are nine best practices to ensure you obtain everything you need to open your restaurant legally from the beginning. It goes without say, review your lease in detail. Before you sit down with your team and put together a master list of action items, review your lease in detail so you have a clear understanding of what your property owner will be responsible for, as well as the duties that fall on you, the tenant. If your lease states that your property owner is responsible for trash removal, they may be required to post a decal showing which company they use and what the pick-up schedule is. Make this your first step to avoid confusion and help facilitate a healthy, productive, and accountable relationship between you and your property owner.

Draw on the experience of your team

Your contractor, designer, engineer, architect, and kitchen equipment vendor will be your most valuable allies in getting all of your licenses, permits, inspections, and postings completed properly. Gather this team and ask them to provide you with a list of everything that they know you will need, as well as areas of uncertainty so that you know where you will need to do focused research. You need to have a team established that has experience, otherwise you will experience a lot of surprises and unmet expectations throughout the process. For the person that’s just going through this for the first time, it’s going to feel like an infinite list and like there are so many people that have their hand out that need to get paid for some sort of application, license, or permit.”

Learn your city

Some municipalities are much more organized than others are when it comes to providing practical, accurate information and resources to help you better understand what is required for you to open and operate your business. Cities like San Francisco and New York have relatively advanced online resources, while others may have nothing at all. Still, even the most sophisticated online tools are only a starting point. If your city does not have a centralized Internet resource for new businesses, they likely have an office you can call or visit to get the same information. Track down the information up front to avoid delays and surprises. Remember, investing a day at your municipal office early in the process can save you weeks or months of costly setbacks down the road.

Research the requirements of each individual city agency

Do independent research online. Call or visit the major city and state agencies you will need to obtain permits from, and by asking peers with similar concepts in your market what they needed to get their doors open. It is important to understand that city agencies do not communicate with each other. In New York City, for example, you need a Certificate of Occupancy from the Department of Buildings and from the Fire Department and there is no link between the two. Once you visit central websites, make sure you are then researching the requirements of each individual agency. For example, the New York City Department of Environmental Protection but also the Department of Health, Department of Sanitation, and Department of Buildings monitor Grease traps. They all have different rules that can trigger violations, so you need to understand the requirements of each.

Make a master list, assign responsibilities & follow up

Once you have consulted every available resource and done as much research as you can, sit with your team and compile a master list of every permit, license, inspection, and posting you will need. Delegate each item to a member of your team and assign due dates as necessary. In your weekly construction meetings, update each other on relevant progress, ask questions, and work together to get through inevitable setbacks and complications.

Get comfortable with the health code in your municipality

Department of Health (DOH) requirements vary greatly from state to state and city to city, and many DOH specifications will dictate parts of your restaurant design. Once you know where you are going to open a property, contact the Department of Health for your municipality and read the entire health code so that you do not get in too deep without knowing the regulations. Once they start pouring concrete and putting pipes in, it can be very expensive to retract the work. Even though many standards are consistent across the country, there are some things drastically different, like outdoor seating regulations. The Department of Health really drives much of the construction for your kitchen, back of house, and outdoor seating areas. You need to be coordinated with whatever the regulations are in your specific location.

Keep all of your finalized documents in a centralized location

Some permits and licenses will need posting in a place where they are visible to guests and employees, and others will need to reside on site and presented to inspectors before and after you open. Jennifer recommends keeping copies of everything in one centralized binder that the General Manager of the property has access to so there is no confusion when inspectors arrive. This will also make it easier to replace expired permits and keep track of renewal dates.

Calendar renewal dates immediately

As soon as you receive any type of license or permit, put a reminder on your calendar for the appropriate renewal date, as well as a reminder a few weeks or months before the actual date. Clearly delegate and note on the reminders who is responsible for each renewal and assign one person (probably your General Manager) to follow up as important dates approach.

Include health code and food handling safety in employee training

Some states require every employee on staff to go through food safety training, while others only require certain individuals to go through it. Even if your municipality does not demand that every person carry a food safety card, Jennifer recommends ensuring that every employee has some level of food handling and safety training. This creates a safer environment for staff and guests and helps to maintain your equipment. Employees are better equipped to understand when something is failing if have knowledge about their workstation, how to set up, and how equipment needs to function to align with code. This helps us avoid huge violations for the restaurant, as well as damage to major equipment. Even if the law does not require it, having a staff that is knowledgeable and responsible about food safety will help shield you from the liability of an unfortunate mistake and help you sleep at night, knowing your team knows the basics.

Set up service contracts right away

Before your contractor and subcontractors disappear, bring in your equipment service vendors and set up maintenance contracts. Preventative maintenance measures make sure you do not incur massive emergency service bills when equipment breaks. It is very expensive to call for service at night and on weekends, which are most restaurants’ primary operating hours. In sum, negotiate service contracts, calendars the dates for their visits, and always follow up with them before and after they come in. Always keep in touch with them to make sure that they are holding up their end of the bargain. Too often contracts are in place, but no one really monitors work completion.

When it comes to licenses and permits necessary for operation, please heed the following takeaways to bring your facility on-line as quickly as possible.

• Do your research. Contact the people in your city and state and ask what you need based on your specific project. Get on top of scheduling critical inspections with long lead times right away.
• Take advantage of your team’s experience, but do not disengage from the process. Surround yourself with people that have done this before and take an active role yourself.
• Get (very) comfortable with Department of Health regulations in your municipality. The Department of Health (DOH) dictates many aspects of construction including kitchen design, and even extending to how your ‘service station’ set up. Educate yourself on the requirements of your specific area and ensure that your general contractor and designer are on top of it, too.

Federal Agency	Department of Treasury – Alcohol permit Internal Revenue Service – Employment ID
State Agency	State Liquor Authority – On-premise alcohol Department of State - DBA certificate, New business registration, Department of Taxation – Certificate of authority
City Agency	Department of sanitation – Food Service Establishment permit, Resuscitation equipment, Safety Data Sheets, Food Protection Certificate, Signage, Fire Department - Open flame permit, Range Hood and Duct Inspection, Portable Fire Extinguisher Tags, Gas Authorization, Ansul Tags, Sprinkler System, Certificate of Occupancy/Place of Assembly, Fire Alarm Test.
Utility Company	Electric / Gas Service , Gas Authorization
Contractor, Architect (In most cases, installation and performance of these items require professionals.)	Certificate of Occupancy, Equipment Use Permits, Building Permit, Sign Permit, Emergency Lighting & Foot Candle Letter

As stated, licenses and permits necessary to open and operate a restaurant will vary from one city or state to another. The agencies and respective departments involved in the licensing and permit process appear below. Your state or municipality of choice may require more, or fewer, licenses and permits than the table contains.

Licenses and Permits

Whether opening a new business or taking over an existing business, restaurant owners are responsible for obtaining various licenses and permits to cover the local, state, or federal regulations regarding the renovation or construction of facilities, and general operation. The operator should contact local government agencies, architects, or contractors for any specific requirements. The following is a list of the typical licenses and permits required. Determining accessibility to licenses and permits must occur prior to signing a lease or buying the facility because the inability to acquire the appropriate licenses and permits could jeopardize your revenue potential. This may be a serious problem, even a deal breaker. You do not want to take control of the property only to discover you cannot operate at full potential.

Building permit/local permit

A building or local permit is normally needed for any new construction. You will need a permit to modify a building if a certain percentage of an existing building will change. A construction permit might require approval by the city planning and zoning commission. Building with historical value and those registered as historic buildings may be very limited as to what modifications are possible. Permits cover construction and additions, plumbing, electrical, and structural changes. Any local, reputable builder should be familiar with local codes and the requirements of the building.

Other building permits

Depending on the location of the building, a restaurant may need other permits to get started. New operators should always check with the local building code enforcement before starting any work. A sample listing of other permits that might be required as listed below.

• Demolition permit to remove structures
• Dumpster
• Building temporary or long-term scaffolding
• Elevators and dumbwaiter
• A tenant's change of use
• A sprinkler system
• Temporary walls or partitions
• Awnings
• Signs
• Patios/platforms

Certificate of Occupancy (CO)

The building inspector issues this certificate, which allows for public assembly in a building. After all inspections are completed, this certificate the overseeing agency issues the certificate. These inspection agencies re usually inclusive of electrical, plumbing, structural, fire, and health. In smaller communities, one person may inspect all of the building work.

Health permit

The overseeing health department at the local, regional, or state-level, depending on state regulations, issues a health permit. A thorough inspection of the facility usually occurs ‘prior’ to the issuance of this permit. A follow-up, working visit may also occur at some point after opening.

Liquor license

Laws and procedures for obtaining a liquor license vary from state to state. In some states, restaurant operators own the licenses as the licensing agency views them as business assets. In other states, the state issues the license and the restaurant must complete an application and send it to a state agency known as the state liquor authority, alcohol license control board, or a similarly name agency.

Requirements to obtain a these licenses vary and are sometimes controlled by local authorities. An additional consideration is the 'type' of alcohol the operator intends to offer their patrons. For example, the licensing agency may classify beer and wine as one category while the addition of hard liquor might change the license requirements. To obtain a liquor license, the restaurant owner must contact the controlling authority in the state or region. The license process may take several months.

Federal Employment Identification Number (FEIN)

You can obtain a FEIN from the federal Social Security administration. This number is mandatory, with few exceptions, to conduct business in the United States.

Sales and use tax license

Restaurant operators normally obtain the sales and use tax license from the state's department of taxation. The assignment of this license officially designates the owner as an agent of the state to collect and pay the appropriate agency the state and local sales tax on products sold.

Outdoor Seating

There are many ways to attract more customers to your restaurant, but during summer, spring and fall months, outdoor seating tops the list. No matter what kind of establishment you run, a simple deck or patio can increase revenue by up to 30 percent. Research shows that a modest investment can increase overall sales significantly — possibly more if your restaurant offers year-round outdoor seating.

What is it about outdoor seating that has such a large effect on your customer base? There are many factors involved, most of which revolve around comfort. Some guests say that an ‘alfresco’ dining experience makes the food taste fresher and better. Others simply enjoy gazing at the view as they share a meal with friends or family. There are many ways to go about it. The following highlights some of the most popular — and successful trends in outdoor seating today. In addition to increasing revenue, outdoor seating allows you to expand your dining area without having to increase the size of the dining room.

Sidewalk seating

One of the easiest ways to offer your customers the joys of an open-air dining experience is to add a sidewalk dining area with a few comfortable sets of tables and chairs that match your restaurant’s theme. Add some patio umbrellas and you will have a charming space that draws diners by the drove — not only your regulars, but also passers-by who are attracted by the sight of happy customers. Sidewalk seating gives you lots of flexibility as well. During lunchtime, diners will appreciate a casual dining experience as they watch pedestrians or sip a cold beverage while they enjoy the shade. At night, use candles or umbrella lighting to make the atmosphere more intimate and to create an attractive display for onlookers to enjoy. In addition, you can add your restaurant’s logo to your patio umbrellas, which is a great way to imprint your brand on both diners and bystanders.

Rooftop dining

If you lack the availability of outward space or wish to pursue additional seating there are additional options. Many restaurateurs choose to expand upwards. From London to Los Angeles, diners everywhere are talking about rooftop eateries. Why? Because the bird’s-eye view allows them to take in beautiful city skylines or wide-open landscapes as they dine.

Of course, there is more to rooftop dining than a few tables and an incredible view. In London, for instance, many of the most popular rooftop restaurants go the extra mile with beautifully manicured gardens and light displays that enliven the atmosphere at night. Pergolas and awnings are also popular features because they offer shade during the day and protect diners from rain.

Dining in the garden

One of the industry’s hottest trends is farm-to-table food - a trend combines easily with outdoor dining. To take advantage of this trend, it is less about the space - a sidewalk, deck, patio or rooftop - and more about what you grow in it. Some restaurants are landscaping their outdoor dining areas with the same fruits and vegetables that they are serving their customers. With the addition of a few raised beds, you can create a wonderfully relaxing environment for your guests while growing some of the lettuce, tomatoes, peppers and other fruits and vegetables that you will be serving.

Fire and water

This next trend is another that works well for just about any outdoor space. Diners love the atmosphere ‘fire and ‘water’ create. Among the more popular water features, you will find reflecting pools, fountains and even simple table settings with floating tea-light candles or flowers. When it comes to fire, fire pits top the list, followed closely by candle lighting, lanterns and torches. One of the reasons that this theme works so well is that these two elements convey everything that you want your guests to feel. Water adds a sense of cleanliness and freshness that enhances the environment and foods you serve. Fire, even in modest amounts conveys a warm, comfortable feeling that encourages guests to linger over drinks and dessert. Combine these elements, and you will have a recipe for an outstanding dining experience.

There is no doubt that an outdoor dining area will enrich your customer’s experience in addition to providing you with a high return on your investment. Your available space - whether a sidewalk, rooftop or private patio - is important, but what matters more is what you do with it. To maximize your investment, offer an attractive blend of the elements listed above. A little bit of shade, nice landscaping and a touch of atmosphere through the clever use of fire and water will ensure that your guests not only come back for more, but also bring their friends and family along, too.