In addition to being one of the fastest-growing cities in America, Houston is a destination for food lovers.
Known for its food trucks and creative cuisine, Houston is quickly becoming a must-visit for chefs and foodies. As a Texas entrepreneur, you may be wondering how to open a restaurant in Houston to capitalize on this food craze.
If you’ve got the talent in the kitchen, we can help you with the rest of what it takes when starting a food business in Texas. In this blog post, The Curley Law Firm team will discuss the logistics of setting up a new Texas business entity.
We’ll help you understand the complex food service permitting and licensing process. When you’re ready to live out your restaurant dreams, we’re here to help.
What Do I Need to Open a Restaurant in Texas?
Before you can set your first table, you will need to set up your business operations. This typically means forming a business entity, registering for state and federal tax identification numbers, and obtaining business permits.
Choosing a Business Entity
Some options to consider when choosing a business entity are as follows:
- Sole proprietorship,
- General or limited partnership,
- Limited liability company (LLC), and
Each entity type has its own merits. However, restaurants have many people coming through their doors.
They also have many people engaged in physical activity and working with hot substances or fires on their premises. Because of these risks, you may want to consider a business entity type that limits your liability, like an LLC or corporation.
When deciding how to open a restaurant in Texas, keep in mind that a few smart choices at the outset can save you thousands over the life of your business.
Whether it’s limiting liability or determining the best structure for you, an experienced business law attorney can help. Don’t hesitate to consult with an experienced lawyer as you’re opening a restaurant in Houston.
Securing a Tax Identification Number
Once you have formed a business entity, you will need to obtain an employer identification number (EIN) from the Internal Revenue Service. This is like a social security number for your business. It allows you to hire employees, pay taxes, and open bank accounts.
Additionally, you may have to register for a taxpayer identification number in Texas. This number is similar to your EIN, but it is how the State of Texas identifies you on state and local filings.
As you are opening a restaurant in Houston, you may find you need both these numbers in lieu of your personal social security number.
One of the biggest issues Texas entrepreneurs face is understanding which licenses and permits their new businesses need. An experienced business lawyer can help you navigate the permitting process.
Some licenses and permits you may need include:
- Health and safety permits (discussed below),
- Sales tax permit, and
- Facilities permit (depending on how your food is served).
This is obviously not an exhaustive list. These are only a few of the permits and licenses you may need when opening a restaurant in Houston.
You can apply for a sales tax permit through the Texas State Comptroller’s online portal.
Facilities permits, as well as most health and safety permits, are typically handled by local authorities. Check with your local fire department to see if you will need crowd control permits or other location-specific permits.
You may need help navigating these complex permitting regulations when starting a food business in Texas.
To assist you, the Texas Department of State Health Services (DSHS) has compiled license and permit information for retail food businesspeople. An experienced business law attorney can also help you apply for the permits you need.
Checklist for How to Open a Restaurant in Texas
Confirming Health and Safety Rules
There are several layers of health and safety rules when opening a restaurant. Be careful not to get tripped up by the labyrinth of regulations. In some cases, the permit rules apply to the restaurant; in some cases, they apply to the food service staff.
There are also three types of food establishment permits: fixed establishment, mobile food unit, and temporary establishment. Permit fees vary based on the gross annual volume of sales. Speaking with a Texas business lawyer can help immensely when navigating which health and safety rules apply to you.
Getting a Liquor License
Something to keep in mind when opening a restaurant in Houston is whether you will want to serve liquor. If you do, you’ll have to get a liquor license. Liquor licensing is handled through the Texas Alcoholic Beverage Commission (TABC).
The liquor licensing process can be complicated and time-consuming. You should take that into consideration when planning the timeline for opening your restaurant. A trusted lawyer can also help guide you through the licensing process.
Once you’ve formed a business entity and taken all the necessary steps to create your business, now it’s time to hire your team. For some, this is the most exciting part of the process.
Because of the high turnover in the restaurant industry, be sure to consult with a lawyer before you make your first hire. Make sure you have strong employment policies and procedures in place. Clear, firm rules and robust employment policies help create a safe and equitable workforce for all.
How The Curley Law Firm Can Help You Get Started
The Curley Law Firm has experience helping both large and small companies get off the ground. We help every kind of Texas business, including start-up restaurants and food trucks, just like yours.
We provide comprehensive legal advice on the advantages and disadvantages of different business entities like corporations, LLCs, and partnerships. Adam Curley helps businesses ensure they begin on a solid foundation.
At The Curley Law Firm, we’re business people working for business people like you. Contact us today with your business formation questions. We’d be happy to help you get started.