Checklist · Business

Opening a Restaurant and Surviving an Inspection: A Practical Checklist

27 U.S.C. § 205

Type
Checklist
Jurisdiction
National
Date
2025-09-03
Topic
Business

A step-by-step checklist for opening and running a food service business without being closed by one of the seven regulators who can do it. Section A covers the pre-lease diligence that has to happen before any money moves. Section B covers the licensing stack in the order the approvals must be obtained. Section C covers the health inspection, before, during, and after. Section D covers the alcohol license, its transfer, and dram shop exposure. Section E covers payroll, with a tip credit audit that finds the industry's most expensive quiet liability. Section F covers platforms, catering, and alternative formats. Section G covers incident response and the sale of the business.

Opening a Restaurant and Surviving an Inspection: A Practical Checklist

Business > Restaurants and Food Service | Published 3 September 2025 - Updated 16 June 2026 | UpLaw - uplaw.us

How to use this

Seven sections in the order the problems arrive. If you are already open, start at Section C.

A — Before the lease · B — Licensing · C — Inspection · D — Alcohol · E — Payroll · F — Platforms and formats · G — Incidents and exit

SECTION A — BEFORE YOU SIGN ANYTHING

A1. Entity and ownership

☐ Form the operating entity before applying for any license. Everything issues to this name. ☐ Get an employer identification number and register for state tax accounts. ☐ Write an operating agreement. Partner disputes close more restaurants than inspectors do — see Owner Disputes and Business Dissolution. ☐ Decide the structure for multiple locations now, not after the second one — see The Small Business Formation and Compliance Toolkit. ☐ Identify every person with an ownership interest. The alcohol regulator will investigate each of them.

A2. The site — verify before the lease, not after

☐ Restaurant use permitted by right, or does it need a conditional or special use permit? ☐ Bar or tavern use classified separately? ☐ Parking requirement at the intended seat count — can the site meet it? ☐ Outdoor seating permitted? Separate sidewalk or encroachment permit? ☐ Drive-through permitted? ☐ Hours, amplified sound, and live entertainment restrictions? ☐ Distance requirements from schools, churches, or residences — these usually govern the alcohol license ☐ Is the current use legally nonconforming, and would your change forfeit it? ☐ Grease interceptor: does one exist, is it sized, and who pays to install one? ☐ Hood and make-up air: does the shell support it, and is there a roof penetration right? ☐ Electrical and gas service adequate for the kitchen you intend to build?

See Zoning and Land Use and Obtaining a Zoning Variance or Special Use Permit.

A3. The lease — the eight terms that decide survival

☐ Rent commences on opening, not possession, with outside dates for permit delay ☐ Use clause broad enough to permit a pivot and consistent with zoning ☐ Tenant improvement allowance: amount, disbursement conditions, ownership of improvements ☐ Good guy clause in the personal guaranty — termination on surrender in good condition, with notice and rent current ☐ Assignment consent not to be unreasonably withheld, with a response deadline ☐ Percentage rent: define gross sales to exclude sales tax, employee meals, unredeemed gift cards, and third-party delivery commissions ☐ Exclusive use covenant, defined narrowly enough to enforce ☐ HVAC, roof, and grease system repair responsibility allocated explicitly

📌 Calendar every lease deadline — renewal notice windows are unforgiving and missing one costs the tenancy. See Commercial Leasing for Small Business and The Lease That Outlives the Business.

A4. If it is a franchise

☐ Read the entire disclosure document, twice, under 16 C.F.R. Part 436 ☐ Litigation history and franchisee turnover tables — the two items that tell you the most ☐ Required suppliers, and whether the franchisor profits on them ☐ Advertising fund accounting ☐ Remodel obligations and their schedule ☐ Territory: does it protect against the franchisor's own delivery and e-commerce channels? ☐ Transfer conditions and post-term restrictions ☐ Personal guaranty scope

See Reviewing a Franchise Disclosure Document and Evaluating, Buying, and Exiting a Franchise.

SECTION B — THE LICENSING STACK, IN ORDER

☐ 1. Entity formation and tax registration ☐ 2. Zoning / use approval — before the lease ☐ 3. Health department plan review — before construction, and separate from building permits ☐ 4. Building, mechanical, plumbing, electrical permits — hood and suppression, grease interceptor, floor drains, hand sinks in required locations, three-compartment sink, water heater sized to the dishwasher ☐ 5. Fire occupancy and suppression sign-off — this sets your seat count ☐ 6. Certificate of occupancy ☐ 7. Health permit after a pre-opening inspection ☐ 8. Certified food protection manager; food handler cards for staff within the deadline from hire ☐ 9. Alcohol license — start months earlier than feels necessary ☐ 10. Sales tax permit; weights and measures; music license; sign permit; valet or live entertainment permits

⚠️ The three sequencing errors that cost the most: building before health plan review; a lease with rent commencing on possession; starting the alcohol application after construction begins.

SECTION C — THE INSPECTION

C1. Before

☐ Know which code your jurisdiction has adopted and keep a copy in the office ☐ Certified food protection manager on every shift where required ☐ Daily temperature logs — cold holding, hot holding, cooking, cooling, reheating ☐ Sanitizer concentration tested and logged ☐ Employee health policy posted, with an exclusion and restriction procedure people can actually use ☐ Handwashing sinks accessible, stocked, and not used for anything else ☐ No bare-hand contact with ready-to-eat food; gloves and utensils available ☐ Walk your own kitchen weekly with the inspection form in hand

C2. During

☐ Accompany the inspector for the entire inspection ☐ Correct what can be corrected on the spot — it changes the write-up ☐ Ask for the code citation on every item ☐ Take your own photographs of each cited condition ☐ Do not argue in the moment. Note the disagreement and argue in writing. ☐ Get the inspector's name and the report number

C3. After

☐ Respond in writing within the stated period, with corrective actions and completion dates ☐ Retrain and document the retraining ☐ Use the appeal process if the finding is wrong — informal conference, then formal hearing, then judicial review on the record. See Administrative Law. ☐ Fix the underlying system, not the instance

C4. If you are closed

☐ Identify the exact closure trigger — no hot water, sewage, vermin, refrigeration failure, outbreak, imminent hazard ☐ Repair and document with photographs and invoices ☐ Request reinspection immediately; know the after-hours and weekend procedure before you need it ☐ Notify the insurer — business interruption may respond ☐ Communicate with staff about pay and scheduling; a closure is a wage and hour event too

SECTION D — ALCOHOL

D1. Applying

☐ Confirm a license is available — quota jurisdictions may have none ☐ Confirm distance requirements from schools, churches, and residences ☐ Disclose every person with an ownership interest above the threshold ☐ Disclose the source of funds, honestly and completely ☐ Complete posting and publication requirements ☐ Prepare for a hearing with neighbor or competitor objections ☐ Start months before opening

D2. Keeping it

☐ Renew on time — a lapse in a quota jurisdiction can be permanent ☐ Report every change in ownership, officers, or control immediately ☐ Buy only from licensed wholesalers, and keep the records ☐ Refuse supplier inducements — free equipment, paid placement, subsidized signage all implicate the tied house prohibition at 27 U.S.C. § 205 ☐ Maintain the operating requirement if the license conditions on continued operation ☐ Train every server and keep the training files — the first thing an investigator asks for

⚠️ Undisclosed control is the revocation issue. Silent partners, management agreements, and revenue-participation loans all raise it.

D3. Buying or selling a restaurant with a license

☐ Confirm transferability with the regulator, not with the seller ☐ Allocate the purchase price with the license valued separately ☐ Condition closing on license approval, with a walk-away date ☐ Escrow the license portion until approval ☐ Do not take operational control before approval — a management agreement used as a workaround is exactly what regulators look for ☐ Seller covenants to cooperate through approval, surviving closing

D4. Service liability

☐ Written policy on refusing service to visibly intoxicated guests and on age verification ☐ Incident log, used ☐ Point-of-sale timestamps retained ☐ Camera retention period long enough to matter ☐ Liquor liability insurance in force — it is a separate policy and its absence is the most common gap in the industry

SECTION E — PAYROLL

E1. Tip credit audit — do this annually

☐ State law first. Many states forbid the tip credit or set a higher tipped minimum; 29 U.S.C. § 218 preserves those standards. ☐ Notice given before the credit was taken, and documented ☐ Employees retain all tips; no employer, manager, or supervisor share ☐ Cash wage plus tips meets the minimum in every workweek, not on average ☐ Tip pool includes only eligible employees — check the "shift lead" who schedules breaks and sends people home ☐ Non-tipped duties within current limits ☐ Overtime computed on the full minimum wage, not the reduced cash wage — the most common error in the industry ☐ Records complete; recordkeeping failures shift the burden to you

See Wage and Hour Law and The Wage and Hour Claim Toolkit.

E2. Service charges

☐ A mandatory service charge is house money — not a tip, cannot support a tip credit ☐ It must be included in the regular rate for overtime ☐ Describe it accurately to the guest; a charge guests believe is a gratuity but the house keeps is both a wage and a consumer problem ☐ If any portion is distributed, document the distribution formula

E3. Minors

☐ Verify age and keep documentation ☐ Hours and times of day by age, with tighter school-day limits under 29 U.S.C. § 212 and 29 C.F.R. Part 570 ☐ Prohibited equipment: power slicers, mixers, bakery machines, compactors, most driving ☐ Cooking restrictions by age and equipment ☐ State restrictions on alcohol service by age ☐ Post the schedule where a compliance check will see it

E4. Everything else

☐ Work authorization verification for every hire under 8 U.S.C. § 1324a; audit the file annually — the penalties assessed are usually paperwork penalties ☐ Sales and payroll taxes treated as trust funds — responsible individuals are personally liable ☐ Uniform and tool deductions may not drive pay below minimum ☐ Walkouts and register shortages may not be charged to employees below minimum ☐ Predictive scheduling ordinance, if your city has one ☐ Paid sick leave that staff can actually use — the employee who cannot miss a shift is the industry's primary outbreak vector ☐ Harassment reporting path that does not run through the shift supervisor ☐ General duty obligations under 29 U.S.C. § 654; see Workplace Safety

SECTION F — PLATFORMS, CATERING, AND FORMATS

F1. Third-party delivery

☐ Read the agreement before signing — commission tier, term, and auto-renewal ☐ Menu price parity: refuse it where state law permits ☐ Confirm the platform cannot list you without a written agreement (several states now require one) ☐ Chargebacks: understand who bears refunds for cold food, missing items, and late drivers — and reconcile them monthly, because they are frequently wrong and almost nobody checks ☐ Promotions require your approval per campaign, not a blanket authorization ☐ Confirm marketplace facilitator status and who remits sales tax ☐ Preserve a first-party ordering channel so you own some customer relationships ☐ Note the arbitration clause and its small claims carve-out ☐ Confirm how a delivered-food illness claim is allocated — see Worker Classification

If you are listed without consent: demand delisting in writing, cite the state statute if there is one, and cite your marks under 15 U.S.C. § 1114 and 15 U.S.C. § 1125 if there is not. Screenshot everything first.

F2. Catering and private events

☐ Guaranteed guest count and the adjustment deadline ☐ Deposit and cancellation schedule by date and percentage — avoid flat "non-refundable," which invites penalty analysis ☐ Menu substitution rights with an equivalence standard ☐ Alcohol: who is licensed at the venue, who serves, who carries liquor liability — the most commonly ambiguous term in off-premises catering ☐ Service charge vs. gratuity described accurately ☐ Force majeure enumerated specifically, tied to orders and prohibitions, with deposits addressed — see Force Majeure, Impossibility, and Excuse ☐ Damage, overtime, and venue rule pass-throughs ☐ Allergen representations handled as a documented process, not a verbal assurance

F3. Food trucks

☐ Health permit plus a commissary agreement — water fill, wastewater disposal, storage, cleaning. Operating without one is the most common and least curable violation. ☐ A permit in each jurisdiction of operation ☐ Vending rules: distance from fixed restaurants and schools, time limits per location, residential street prohibitions — enforced by parking enforcement ☐ Fire code sign-off on the propane system ☐ Commercial auto coverage in addition to general liability

F4. Ghost kitchens and shared facilities

☐ Who holds the health permit? ☐ Whose name is on the food as presented to the consumer? ☐ Disclosure of the preparing facility's physical address, where the state requires it ☐ Written allocation of liability for a contamination event spanning brands ☐ Insurance naming each brand entity

F5. Cottage food and pop-ups

☐ Confirm the product is on the state's permitted cottage food list — nothing requiring temperature control ☐ Labeling requirements, including the required "made in a home kitchen" statement ☐ Revenue cap and any prohibition on wholesale or interstate sales ☐ Temporary event permits for pop-ups: separate handwashing and equipment requirements

F6. Wholesaling: the line you may cross without noticing

☐ Bottling a sauce, selling bread to a grocer, or shipping a spice blend moves you out of the retail exemption ☐ At that point: facility registration, 21 C.F.R. Part 101 labeling, allergen declaration, and preventive controls under 21 U.S.C. § 350g and 21 C.F.R. Part 117 ☐ Misbranding and adulteration exposure under 21 U.S.C. § 343 and 21 U.S.C. § 342, with prohibited acts at 21 U.S.C. § 331 and definitions at 21 U.S.C. § 321 ☐ See FDA Regulation of Food, Drugs, Devices, and Cosmetics and Bringing an FDA-Regulated Product to Market

SECTION G — INCIDENTS, ACCESS, AND EXIT

G1. Allergen protocol

☐ A standard question asked at ordering ☐ A ticket flag visible to the line ☐ A written protocol: separate utensils, separate surface, separate fryer where feasible ☐ Manager confirmation at the table ☐ A maintained ingredient reference covering sauces, marinades, and shared fryer oil — the three places allergens hide ☐ Training documented per employee

G2. Foodborne illness, hour by hour

☐ Hour 1. Do not admit or deny causation. Collect names, dates, items ordered, symptoms. Designate one communicator. ☐ Hour 2. Preserve product, invoices, temperature logs, schedules, sick-leave records. Do not discard the suspect food. ☐ Hour 3. Notify the insurer — late notice is a real coverage defense. See Liability Insurance Coverage. ☐ Day 1. Cooperate with the investigation, with counsel. The record becomes public. ☐ Day 2. Trace back through suppliers — indemnity and contribution claims live in the invoices. ☐ After. Fix the control, which is usually the employee illness policy.

G3. Accessibility walk-through

☐ Accessible route: parking → entrance → dining → restroom ☐ Table height and knee clearance, with accessible seating dispersed, not concentrated at one bad table ☐ Service animals admitted; only two questions permitted, neither about documentation ☐ Willingness to read the menu aloud ☐ Website and online ordering — where the litigation actually is ☐ Requirements at 42 U.S.C. § 12182, covered entities at 42 U.S.C. § 12181, rules at 28 C.F.R. Part 36. See The Website Is the Storefront.

G4. Music, marketing, and reviews

☐ Performing rights licenses in place — the public performance right is at 17 U.S.C. § 106, and the narrow exemption at 17 U.S.C. § 110 does not cover a distributed speaker system ☐ A consumer streaming subscription is not a commercial license ☐ Substantiate menu claims — "local," "organic," "wild-caught," "house-made." See Substantiating Advertising Claims. ☐ Respond to reviews once, factually; use platform removal policies rather than litigation

G5. Insurance review, annually

☐ General liability ☐ Liquor liability (separate policy — the most common gap) ☐ Property with business interruption ☐ Equipment breakdown ☐ Spoilage ☐ Workers' compensation ☐ Employment practices liability ☐ Cyber ☐ Commercial auto ☐ Umbrella

G6. Selling

☐ Liquor license transferability confirmed with the regulator ☐ Lease assignment consent standard and a landlord estoppel certificate ☐ Wage and hour history diligenced — successor liability is real in several states ☐ Health permit and inspection history ☐ Equipment owned vs. leased or financed — the walk-in is frequently not owned ☐ Gift card liability quantified; note the restrictions at 15 U.S.C. § 1693l-1 and state escheat rules ☐ Intellectual property: name, recipes, domain, social accounts, review profiles ☐ Purchase price allocation with the license valued separately

G7. The ten-item annual audit

☐ 1. Health permit name matches the operating entity ☐ 2. Alcohol license current; all ownership changes reported ☐ 3. Tip credit audited against current state rules ☐ 4. Service charges in the regular rate for overtime ☐ 5. Minor employment schedule compliant ☐ 6. Work authorization files complete ☐ 7. Delivery chargebacks reconciled ☐ 8. Liquor liability and spoilage coverage in force ☐ 9. Lease dates calendared ☐ 10. Temperature, sweep, and incident logs contemporaneous and legible

SECTION H — FAST ANSWERS

Question Answer
Can the health department close me on the spot? Yes, for an imminent hazard — no hot water, sewage, vermin, refrigeration failure, or a traced outbreak.
Can I argue with an inspector? Argue in writing, after. On site, correct what you can and ask for citations.
Is there an appeal? Yes, and almost nobody uses it. Informal conference → formal hearing → judicial review on the record.
Do I need a liquor license to let guests bring their own? Usually yes — a corkage or BYOB permit. "We don't sell it" is not the test.
Can my supplier give me a free cooler? No. That is the tied house problem under 27 U.S.C. § 205.
Can I keep part of the tips if I also work the floor? No. Owners, managers, and supervisors may not share in tips, period.
Can I use tips to cover a walkout? No. Deductions may not reduce pay below the minimum, and tips belong to the employee.
Is a 20% "service charge" a tip? No. It is house money, and it goes into the regular rate for overtime.
Can a 16-year-old run the slicer? No. See the hazardous occupation rules at 29 C.F.R. Part 570.
Can I play Spotify in the dining room? Not on a personal subscription. You need performing rights licenses.
Do I have to let a service animal in? Yes, and you may ask only two questions, neither about documentation.
A platform listed me without asking. Now what? Written demand, state statute if available, trademark claim if not, screenshots first.
Should I sue over a bad review? Almost never. Anti-SLAPP fee-shifting plus republication makes it a losing trade.

SECTION I — THE ONE-PAGE OPENING TIMELINE

When Do
T-12 months Entity, operating agreement, concept, capital plan
T-10 months Site zoning verification; letter of intent
T-9 months Lease negotiated — rent commences at opening, good guy clause, assignment standard
T-8 months Alcohol application filed
T-8 months Health plan review submitted
T-7 months Building permits; construction begins
T-3 months Hiring plan; payroll system built correctly the first time
T-2 months Food protection manager certified; food handler training scheduled
T-6 weeks Insurance bound — including liquor liability and spoilage
T-4 weeks Fire and occupancy sign-off; certificate of occupancy
T-3 weeks Pre-opening health inspection; health permit issued
T-2 weeks Music licenses; sales tax permit; POS and payment card compliance
T-1 week Friends and family service; log systems live from day one
Opening Rent commences. Not before.

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