It’s a $2.3 billion dollar industry growing at 3% annually with no signs of slowing down. The coffee industry is brewing and the proliferation of coffee drinking has significantly increased the number of coffeehouses and coffee shops in Australia in the past five years. While competition is fierce, the cost of doing business in the industry is also growing. Rising rental costs and increasing input prices are forcing downward pressure on profitability. If you are thinking of opening a coffee shop, make sure you satisfy the strict legal requirements to avoid problems later on.

Business Licensing

The coffee industry has barely been able to keep up with the rise in coffee consumption. Employment has also grown strongly, particularly in higher skilled baristas. When starting a coffee shop, you will need to consider your business structure, whether this is a partnership, company or franchise structure. This will require a number of key documents depending on the structure you pick, including shareholders’ agreements, partnership agreements and franchise agreements. You will also need to register your business and obtain an Australian Business Number (ABN).

Food Safety Laws

It’s no surprise that coffee shops must adhere to strict food safety laws. Administered by the Food Standards Code of Australia, any establishment selling food or drink must follow food hygiene and preparation guides. These laws set out general food and safety standards, including serving temperatures of drinks and storage of perishable material. It also deals with hazards and risk management (no-one likes a burnt coffee, especially not one that actually burns you!). If you are opening a coffee shop, you will have a safety inspector audit the entire process and perform frequent inspections and safety audits, as well as educating the employees.

Each State and Territory has different licensing processes for food. If your coffee house sells food, including meat, dairy, seafood or plant products, it is essential you plan your food licence ahead of time. All food businesses must display a food licence or a copy of the licence in a prominent place. You must not commence any trading until you have been informed your application has been processed.

Council Regulations

Every coffeehouse is different, but you may be required to obtain permits and pay annual fees for outdoor dining and street advertising. Each State and Territory has a different Development Assessment Process, to ensure minimum standards are met as well as to meet interests of the community and other local businesses.

If you intend to make physical changes to the premises, you must provide a Construction Certificate to certify that the proposed works comply with the conditions of the development consent. Following this, an Occupation Certificate is required to certify that construction was completed by the Construction Certificate.

The supply and sale of alcohol are strictly regulated. You must have the appropriate liquor licence, and staff must hold a Responsible Service of Alcohol. Most importantly, the type of liquor licence you hold must complement the approved use under the Development Consent, or the liquor application may be refused.

Conclusion

There are a plethora of other issues surrounding the legal framework in selling coffee and setting up a coffee shop (such as playing licensed music and enforcing smoking bans). We’ve worked with a number of hospitality businesses and would be delighted to assist you in understanding what you need to set up your business. Call us on 1300 544 755 or contact us using the form on this page.

Anthony Lieu

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