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Top 3 Legal Mistakes Made by Restaurant Owners

Mitchell Collins

Many new restaurant owners can easily get lost in the logistics of opening and running a successful business. The journey from a mere thought to opening day can be long, expensive, and tiresome. It is easy to get lost in the paperwork to make sure everything is done properly, but sometimes things simply fall through the cracks. Following are the top three legal mistakes restaurant owners make.

Not Being Familiar with Local Liquor Laws

Once a restaurant has received their liquor license, it is their responsibility to know and abide by all local and federal liquor laws. The first step is to know what kind of liquor license you have, and what it allows you to serve. For example, a restaurant liquor license is the most general license and typically allows for the sale of all kinds of liquor, while restaurants who plan to make their own beer or wine need to have a brewpub liquor license. A beer and wine liquor license does not allow for the sale of hard liquor or spirits, and a tavern liquor license is for restaurants whose liquor sales comprise over half their total sales of food and liquor combined.

Once the kind of liquor license has been determined, the local laws will need to be adopted. For example, some localities do not allow unfinished bottles of wine to be taken home, while others have a limit of one drink per customer at a time. The failure of a restaurant to follow applicable liquor laws can result in heavy fines or a revocation of their liquor license altogether.

Unsafe Food Storage

It is crucial for restaurants to store and prepare food in a safe manner. Steve Lewis at Ambient Edge states, “Those in a food-related industry understand the narrow specifications for environmental controls and allowable fluctuations in temperature and humidity. It is important to make sure all food is stored at the proper temperatures for the safety and well-being of consumers.”

Refrigerators should be set to maintain a temperature of 40 degrees or below. In the event of a power outage or malfunction, food held at temperatures above 40 degrees for more than two hours is not considered safe for consumption. Improper food storage can result in fines and potential law suits, depending on whether anyone got sick from the improperly stored food.

Unfamiliarity with the Fair Labor Standards Act

The Fair Labor Standards Act establishes guidelines that apply to every restaurant across the United States. It establishes a federal minimum wage of $7.25 per hour, unless their specific state requires a higher wage. The act also prohibits deductions of wages for required uniforms, cash shortages, and customer walk-outs if the total deductions drop the employee’s wage below minimum wage.

Employees under the age of 18 may not perform hazardous job duties under any circumstances. These include: using bakery equipment, operating meat processing equipment, and operating or maintaining power-driven equipment like slices, grinders, and mixers.


Mitchell Collins, Law School Student and Freelance Writer
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