Estimates as to how many new restaurants fail each year remain a bit shocking. According to one recent article, American Express estimates that, “90% of restaurants fail in their first years . . .” However, other estimates run closer to about 60%. Regardless of which figure you believe is more accurate, this means that anyone wanting to open a restaurant has less than a 50-50 chance of succeeding. You must personally have a lot of extra cash (or a number of wealthy partners) to seriously consider starting this type of business enterprise.

 Why is it so hard to succeed in running a restaurant?  It’s because in addition to choosing the right combinations of foods to serve and creating the best dining atmosphere possible, you've got to have the patience to handle lots of bureaucratic red tape. You must also have a talent for both hiring and retaining pleasant and dependable workers.

Here's a list of some of the activities you'll need to skillfully handle before you can even begin to worry about coming up with great marketing plans or a number of tantalizing new recipes.

Critical Paperwork and Bureaucratic Steps New Restaurant Owners Must Handle

  • Obtaining a liquor license and other permits. In addition to qualifying for a liquor license, you'll also have to obtain one or more permits to serve food. Building permits are also required which indicate that you’ve met all fire department regulations -- such as providing enough exits. Keep in mind that you must also carefully enforce the legal drinking age and only hire employees deemed old enough to work where alcohol is served (according to all pertinent state laws);

  • Purchasing adequate insurance coverage. Not only must you obtain adequate workers’ compensation insurance to cover all employee injuries suffered on the job, you must also be prepared to defend against any slip-and-fall accident lawsuits that customers and other visitors to your premises may file. Always be sure to meet with an insurance agent to find out if you have the full coverage that you'll probably need;

  • Qualifying for all required health permits. You can only qualify for these if you purchase the safest equipment available, only hire employees who have passed all required health exams, maintain adequate refrigeration systems, and enforce proper waste disposal (among other requirements). You'll also have to be ready for all of the random visits from a myriad of health inspectors;

  • Handling all personnel matters (hiring and firing employees). You must be certain to handle all of these tasks in a legally responsible and non-discriminatory manner;

  • Properly address all franchise concerns. If you’re opening up a restaurant that's part of a franchise, it may initially take less time – if you're allowed to directly copy the way others nearby owners in your state have handled the process. However, you may still need to regularly answer to higher-up bosses and cope with special franchise tax issues.


Whatever you do, be sure to conduct extensive market research in advance to be sure there’s adequate demand for the type of restaurant you would like to open. You must also be sure that your target customers can easily afford the meals you plan to serve.

To obtain help with handling all of your Georgia business planning needs, please contact Shane Smith Law today.  You can schedule your free initial consultation with a knowledgeable Peachtree City estate planning attorney by calling: (770) 487-8999.

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