Business Topics Need Help? More Information		How to Start a Restaurant in Ontario Last Verified: 2005-09-09 The following document was prepared by the Canada-Ontario Business Service Centre (COBSC), a single point of access to information on federal and provincial government programs, services and regulations. It is designed to provide an understanding of potential license, permit or registration requirements when considering the establishment of a restaurant in Ontario.  Although many of your questions will be answered in this document, the list of resources given here is not exhaustive.  Further information can be obtained through any of the following: calling the telephone numbers listed under each section; visiting the Web sites listed under each section; calling the COBSC at 1-800-567-2345 or [phone] and speaking with one of our Information Officers; visiting the COBSC Web site at http://www.cbsc.org/ontario; visiting Regional Access Program , which are located throughout Ontario. Note : Because this document is only meant as a guide, the Canada-Ontario Business Service Centre will not accept responsibility for business decisions made based on the information provided. Some of the organizations listed below are not subject to the federal Official Languages Act or the French Language Services Act of Ontario. Their services may not be available in both official languages. TABLE OF CONTENTS Basics to Getting Started Industry Overview Regulations Financing Taxation Managing Your Operation Associations Resources and Web Sites of Interest  1. BASICS TO GETTING STARTED Starting a business can be a rewarding undertaking, but it comes with its challenges.  Before starting a business in Ontario, it is wise to do your research.  Ask yourself if you are truly suited for entrepreneurship and understand that significant effort may be required.  You should thoroughly enjoy the field you are getting into and you must believe in your service; it may consume much of your time, especially in the start-up phase.  There are several issues to consider such as regulations, financing, taxation, managing your business, advertising and much more. For further information: see these documents: Checklists for Going Into Business Business Start-Up Info-Guide Employment Regulations Info-Guide 2. INDUSTRY OVERVIEW Maintaining High Health Standards As a restaurant operator, your main preoccupation should be to maintain high health standards. Maintaining traffic in your restaurant depends on it, as your restaurant will probably be inspected and appraised. Important steps to take into consideration when dealing with health issues include: food temperature control; protection of food from contamination; employee hygiene and hand washing; maintenance and sanitation of surfaces and equipment that come into contact with food; maintenance and sanitation of surfaces and equipment that do not come into contact with food; maintenance and sanitation of washrooms; storage and removal of waste; pest control. For further information, call your local Public Health Unit. Designing your Restaurant and Calculating Seating Capacity Depending on your experience, finances, location and customers, you will have to decide on the type of restaurant you want to operate (traditional, ethnic, specialty, coffee shop, fast food, cafeteria, self-serve, etc.), and aim for a practical, useful layout, that will set the mood. It would be good to have all of the following: seating/waiting areas, serving room, cashier area, rest rooms, bar (optional); one or more areas from which you can view the entire restaurant; lighting, signs and obstacle-free traffic flow; a variety of seating arrangements: 50% of customers come in pairs; 30% come alone or in groups of three; and 20% in groups of four or more; adequate room - the suggested square footage requirements per chair are: 10-20 sq. ft. in traditional restaurants, 10-12 in cafeterias, 7-17 in coffee shops; a kitchen that allows efficient and effective food preparation and interaction between staff; safety in movement, dry and cold storage, dish washing, an area for staff's personal items; convenient delivery zone, ease of cleaning and maintenance, and proper ventilation and lighting. To determine the maximum potential of your restaurant and break-even point: determine desired profit - convert to percentage of sales to get sales required; determine number of operating days - divide number of days into sales to get average daily sales; estimate volume percentages for meal periods (breakfast, lunch, dinner); multiply figures in step 3 by average sales per day to get dollar volume per period; determine average check per meal period; divide dollar volumes in step 4 by average check for the number of patrons per period; estimate a) average seat occupation per meal period; and b) time per meal period; divide time per period by average occupation to get seat turnover per period; divide possible seat turnover into number of patrons to get number of seats required per period; take the largest seating requirement in step 9 and add a 20% safety margin for the seating capacity. Source: Western Regional Office, Manitoba Industry, Trade and Mines Planning Your Business What is a Business Plan? A business plan is a recognized management tool used by successful and/or prospective businesses of all sizes to document business objectives and to propose how these objectives will be attained within a specific period of time. It is a written document, which describes who you are, what you plan to achieve, where your business will be located, when you expect to get under way, and how you will overcome the risks involved and provide the returns anticipated. Why Do I Need One? A business plan will provide information of your proposed venture to lenders, investors, and suppliers to demonstrate how you plan to use their money, and to establish a basis for credibility of your project.  This plan will serve as a guide to the various areas that you as a manager will be concerned with. As you work through this plan, adapt it to your own particular needs. For further information: see the document  Business Plan Guide Interactive Business Planner (IBP) The IBP is a computer software program that uses the capabilities of the Internet to assist you in preparing a 3-year business plan for a new or existing business. The IBP will help you write your business plan, provide a format for writing your business plan, and take the information you enter and prepare financial projections for you. For further information: visit the Web site Interactive Business Planner (IBP) http://www.cbsc.org/ibp see the document  Interactive Business Planner - IBP 3. REGULATIONS Canadian Food Inspection Agency (CFIA) The Canadian Food Inspection Agency contains a lot of information on food safety, including food safety tips. For further information: please call 1-800-442-2342 or 613-225-2342 visit the Web site Canadian Food Inspection Agency (CFIA) http://www.inspection.gc.ca/  Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA) The Ministry of Agriculture, Food and Rural Affairs Web site contains a lot of information on food safety, including information on the Food Safety and Quality Act . For further information: please call 1-888-466-2372 visit the Web site: Food Safety   http://www.omafra.gov.on.ca/english/infores/foodsafe/safety.html Ontario Ministry of Health and Long-Term Care (MOHLTC) The Ministry of Health and Long-Term Care Web site contains a lot of information on Health Issues, including locations of Public Health Units and publications on food and water safety. For further information: please call 416-314-5518 or 1-800-268-1154 visit the Web site: Publications:  Food Safety http://www.health.gov.on.ca/english/public/pub/pub_menus/pub_foodsafe.html Alcohol and Gaming Commission of Ontario The Alcohol and Gaming Commission of Ontario is a regulatory agency that reports to the Ministry of Consumer and Business Services. Its mandate is to regulate the sale, service and consumption of alcohol beverages. It manages alcohol licences in Ontario. For further information: please call 416-326-8700 or 1-800-522-2876 visit the Web site Alcohol and Gaming Commission of Ontario http://www.agco.on.ca/ see the document  Application for a New Liquor Licence Liquor Control Board of Ontario The Liquor Control Board of Ontario is responsible for the administration of some alcohol retailing programs in Ontario. For further information: please call 416-365-5900 or 1-800-668-5226 visit the Web site Liquor Control Board of Ontario http://www.lcbo.com/ Bring Your Own Wine (BYOW) and Take Home The Rest (THTR) Bring Your Own Wine These new regulations improve customer service by allowing patrons to bring commercially made and unopened wine to participating licensed establishments. Licensed establishments such as family and fine dining restaurants, cafes, hotel and motel restaurants and similar types of restaurants are eligible for BYOW. Licensed banquet rooms located in a hotel or motel are also eligible. Participation in the BYOW initiative is voluntary for eligible licensed establishments, and establishments are free to set their own policies for how they offer the service. Some establishments may choose to offer BYOW only on slow nights of the week, or only on special occasions. Licensed establishments offering this service may also charge a corkage or service fee, require minimum food orders and/or limit the number of bottles a patron can bring. How to Apply for a Bring Your Own Wine  (BYOW) Endorsement Interested licensees must apply to the Alcohol and Gaming Commission of Ontario (AGCO) for an endorsement to their existing liquor license. For the first year of the initiative, participating licensed establishments will not be charged an endorsement fee. A liquor sales license is issued for the sale and service of beverage alcohol in licensed areas where light meals are available. When a liquor sales license is combined with an endorsement, the licensee may sell and serve beverage alcohol under specific circumstances. An endorsement is an addition that is only valid when combined with an active liquor sales license. In order to apply for a BYOW endorsement, licensees should visit the AGCO website at http://www.agco.on.ca  to print an application form.  Once completed, the application should be mailed to the Alcohol and Gaming Commission, Licensing and Registration at 20 Dundas Street West, 7th Floor, Toronto, Ontario, M5G 2N6. Take Home the Rest (THTR) New regulations improve consumer service by allowing patrons to remove partially consumed and resealed bottles of wine that they brought to, or purchased from, a licensed establishment. Take Home the Rest encourages responsible drinking. Patrons no longer have to choose between finishing a bottle of wine – which may lead to over-consumption – or leaving it behind.  Participation in the Take Home the Rest initiative is voluntary for all licensed establishments. For further information: Call 1-800-522-2876 Visit the Web site: Questions and Answers - Bring your own wine/Take the Rest Home http://www.agco.on.ca/en/t.tools/t3.3.LLA.Reg.Changes.faqs.html Municipal regulations Tobacco use in restaurants Each municipal government has the authority to regulate smoking in restaurants.  Since there is no uniformity throughout the province regarding municipal licences for businesses, you should consult with the appropriate local officials to determine whether your business will be affected by local regulations. Note : Keep in mind that other specific municipal requirements may also apply, depending on the city where the business will be located. Local municipalities may be responsible for the administration of certain business licenses, and they are also responsible for the administration of certain provincial laws, like the Health Protection and Promotion Act, which governs community health standards. For further information: visit the Web site Association of Municipalities of Ontario http://www.amo.on.ca//AM/Template.cfm?Section=Home see the document  Municipal Requirements to Start a Business  Related legislation: Alcohol and Gaming Regulation and Public Protection Act, 1996 http://www.e-laws.gov.on.ca/DBLaws/Statutes/English/96a26_e.htm Liquor Licence Act http://www.e-laws.gov.on.ca/DBLaws/Statutes/English/90l19_e.htm Wine Content and Labelling Act, 2000 http://www.e-laws.gov.on.ca/DBLaws/Statutes/English/00w26_e.htm Health Protection and Promotion Act http://www.e-laws.gov.on.ca/DBLaws/Statutes/English/90h07_e.htm Tobacco control Act http://www.e-laws.gov.on.ca/DBLaws/Statutes/English/94t10_e.htm Food and Drugs Act http://laws.justice.gc.ca/en/F-27/ 4. FINANCING The Canada-Ontario Business Service Centre has created documents, which provide an overview of some of the main financing options for individuals starting and operating a business in Ontario, including programs offered or supported by the government For further information: please call 1-800-567-2345 visit the Web site The Canada-Ontario Business Service Centre http://www.cbsc.org/ontario see the documents: Financing for Starting a Business Info-Guide Financing for Established Businesses Info-Guide Business Guides Canada Small Business Financing Program Business Financing Program can assist new and existing small businesses with annual gross revenues not exceeding $5 million (excluding farming and charitable or religious enterprises) in obtaining term loans and capital leases of up to $250 000 to help finance fixed asset needs. For further information : please call [phone] visit the Web site: Canada Small Business Financing Program http://strategis.ic.gc.ca/epic/internet/incsbfp-pfpec.nsf/en/Home see the document:  Canada Small Business Financing (CSBF) Program Sources of Financing Sources of Financing is an Internet resource for locating traditional and alternative sources of small business financing.  This site provides interactive access to objective information on appropriate forms of public and private sector sources of debt and equity financing: For further information: visit the Web site Sources of Financing http://strategis.gc.ca/sources see the document   Sources of Financing Sources of Micro-credit Financing "Micro-credit" can be defined as small loans made to individuals to undertake self-employment or to start  small businesses.  This type of financing may be provided through a number of different sources including independent non-profit organizations, community economic development programs, commercial financial institutions, etc. For further information: please call  1-800-567-2345 or [phone] visit the Web site Micro-Credit http://strategis.ic.gc.ca/epic/internet/insof-sdf.nsf/en/h_so03327e.html see the document  Sources of Micro-credit Financing 5. TAXATION Dealing with Business Taxes All businesses must be aware of the various taxes that may apply to their product or service. Depending on the type and location of products or services being offered, federal, provincial and/or municipal business taxes may apply. For further information: visit these Web sites: Provincial Tax Forms and Publications http://www.trd.fin.gov.on.ca/userfiles/HTML/cma_3_9237_1.html Small Business Tax Help http://www.trd.fin.gov.on.ca/userfiles/HTML/cma_3_160_1.html CRA Business Tax Web Page http://www.cra-arc.gc.ca/tax/business/menu-e.html see the document   Taxation Info-Guide Income Tax Information Business owners must be aware of the requirements of Income tax that may apply to their product or service. There are different tax implications for incorporated and non-incorporated businesses. For information specific to your organization you should consult an accountant or financial professional. For further information: please call 1-800-959-5525 visit the Web site: Ontario Income Tax http://www.trd.fin.gov.on.ca/userfiles/HTML/cma_3_2447_1.html Canada Revenue Taxes Menu http://www.cra-arc.gc.ca/tax/menu-e.html see the document  Taxation Info-Guide   Below are links to publications that cover some of the tax requirements for restaurant owners in Ontario Prepared Foods This Pointer will help if you sell prepared foods from an eating establishment. It explains the basic Retail Sales Tax (RST) rules for your type of business. http://www.trd.fin.gov.on.ca/userfiles/HTML/cma_3_24702_1.html Alcoholic Beverages This Pointer provides basic Ontario retail sales tax information relating to the sale of alcoholic beverages in an establishment such as a restaurant, bar, pub, hotel, resort or caterers. http://www.trd.fin.gov.on.ca/userfiles/HTML/cma_3_6821_1.html Sale of Prepared Foods and Beverages to Status Indians This Notice clarifies how Retail Sales Tax (RST) applies to the sale of prepared food products and beverages to Status Indians http://www.trd.fin.gov.on.ca/userfiles/HTML/cma_3_4423_1.html Application for a Vendor Permit This form is to be completed when applying for a retail sales tax Vendor Permit, for purposes of charging and collecting retail sales tax. http://www.trd.fin.gov.on.ca/userfiles/HTML/cma_3_6695_1.html Discount Coupons The information in this guide explains how Ontario retail sales tax applies when various types of coupons are redeemed towards the purchase of goods. http://www.trd.fin.gov.on.ca/userfiles/HTML/cma_3_6283_1.html Below are links to publications that cover some of the general tax requirements for business owners in Ontario. Ontario Small Business Guide This booklet will guide you through various aspects of Retail Sales Tax, Corporations Tax and Employer Health Tax.  This booklet also answers some of the frequently asked questions of small business owners regarding tax obligations. http://www.trd.fin.gov.on.ca/userfiles/HTML/cma_3_24414_1.html EHT Guide for Employers Describes the main features of the EHT, including taxpayer rights and responsibilities under the Employer Health Tax Act http://www.trd.fin.gov.on.ca/userfiles/HTML/cma_3_3687_1.html For further information: see the document  Employer Health Tax - EHT Retention/Destruction of Books & Records Explains the retention period required for Ontario tax purposes, before books and records can be destroyed. http://www.trd.fin.gov.on.ca/userfiles/HTML/cma_3_20001_1.html Voluntary Disclosure Explains what voluntary compliance is and the basic principles under which Ontario's tax system operates http://www.trd.fin.gov.on.ca/userfiles/HTML/cma_3_19999_1.html 6.  MANAGING YOUR OPERATION Insurance Insurance needs for businesses vary greatly. It is best to choose an insurance agent or broker familiar with your size of business and, in particular, an agent familiar with your type of operation. If you don't have an insurance agent, it could be a wise decision to ask other business owners in your area to recommend one. Your local restaurant association may also have information about insurance packages specifically tailored for restaurants. The following list is included to remind you not to overlook the complex areas of business insurance. It is best, however, to discuss your specific requirements with your insurance agent. Basic insurance: fire insurance (extended coverage on buildings and contents); liability insurance; burglary protection (theft coverage); dishonesty insurance (covers thefts by employees). Marketing/Advertising Word-of-mouth advertising and good public relations are often the best ways of promoting your business. Depending on your market and its size, also consider flyers, business cards, brochures, newspapers (especially for holiday promotions), radio, TV, the phone book and the Internet. Also bear in mind that a satisfied customer is good advertising. Referrals are also a valuable way of making customers aware of your products or services. A Web site is also a good marketing tool. It should have details to describe the location (your address, telephone and fax numbers, and directions on how to get to your establishment), hours of operation, services offered, credentials and anything else you think may be of interest to potential customers. However, once you launch a Web site, you should update it on a regular basis. Participating in community events is another way of advertising your business. You may also hold events that will promote your business.   No matter how you choose to market your business, it is wise to track how your clients became aware of your establishment - this may help determine your future advertising strategies. For more information: see these documents: Signs and Your Business Plan Your Advertising Budget Advertising Do's and Don'ts Ways to Promote Your Product or Service Marketing Plan Outline The Marketing Basics section of the Online Small Business Workshop covers the basics from developing your customer profile to promoting your business. For more information: visit the Web site Online Small Business Workshop http://www.cbsc.org/osbw The Competition Act governs misleading advertising and deceptive marketing practices for all businesses in Canada.  The Act, which is administered by Industry Canada, defines which marketing practices are illegal and the process of complaint investigation. For more information: please call: [phone] or 1-800-348-5358 visit the Web site Competition Bureau http://www.competitionbureau.gc.ca/internet/index.cfm?lg=e see the document   Competition Act - Misleading Advertising and Deceptive Marketing Practices   Market Research Successful businesses have extensive knowledge about their customers and their competitors.  Acquiring accurate and specific information about your potential clients and competitors is a critical first step in market investigation and development of a marketing plan. In developing a marketing plan, your primary functions are to understand the needs and desires of your clients, select or develop a service that will meet their needs, develop promotional material that will make them aware and ensure service delivery. For more information: see the document Marketing Plan Outline Selecting Professional Services The use of professional services is essential to the success of a small business. Professionals can provide knowledge and expertise in the areas where you may have little. They can round out your management team to ensure your business is operating efficiently. Professional services often used by entrepreneurs may include: lawyer: insurance broker; accountant; banker (for tips on dealing with your bank, see the document  Dealing With Your Banker & Other Lenders ). For further information: see the document  Selecting Professional Services Employing people What are the rules on working conditions in Ontario? The Employment Standards Branch of the Ontario Ministry of Labour is responsible for the administration and enforcement of the Employment Standards Act, which provides for minimum terms and conditions of employment in most industries. For further information: please call [phone] or 1-800-531-5551 see these documents: Employment Regulations Info-Guide Employment and Training Assistance Programs Info-Guide Are You an Employee or Self-Employed? Related Legislation Employment Standards Act http://www.e-laws.gov.on.ca/DBLaws/Statutes/English/00e41_e.htm Choosing Your Location Choosing the right location for your business is important. Considerations include the needs of your business, where your customers a