Are you looking to have a slice of the pizza action? The pizza restaurant and takeaway industry in Australia is growing, with an expected $3.7 billion in revenue to be generated over the next financial year. It’s no surprise that with over 4,000 pizza restaurants and takeaway shops in Australia, the majority of which are independently owned. Domino’s Pizza and Pizza Hut are the two largest franchise chains in the industry. If you are looking to open up a pizza shop, purchase a pizza franchise or sell your pizza business, this article sets out the legal considerations for business owners.

Setting up a Pizza Restaurant

While you may have a gourmet pizza menu and an impressive fit-out idea, there are a number of legal hurdles to jump over before you can deliver your first pizza. Your business structure should be one of your first decisions to make as a business owner. If you are not joining a franchise network, you will have to decide whether you want to set up as a sole trader, partnership or company. Each business structure has different advantages and disadvantages, including establishment cost, tax planning and business owner liability. A lawyer specialising in business structuring can assist you with determining the most effective structure for your business.

Leasing considerations will also be the key to success of your business. Whether you are in a shopping mall or a suburban outlet, a commercial lease should be carefully reviewed. In addition to standard clauses such as rent and option to renew, you should examine whether competitors can open in your area and costs to fit-out your store. One of the key success factors in this industry is proximity to key markets allowing adding convenience, impulse buying and faster delivery.

Food Regulations

With any business in the food industry, there are strict regulations surrounding the health and safety of food preparation and consumption. In Australia, the Australian New Zealand Food Standards Code regulates all businesses in the food industry where they are required to adhere to the authority of Food Standards Australia New Zealand. If you are purchasing a pizza store, you should inspect food safety records and ensure that the premises have had a clean record in maintenance and food preparation.

Government Regulations

In addition to food regulations, pizza establishments in Australia are also subject to government regulations such as the Competition and Consumer Act 2010 (Cth), which includes the Australian Consumer Law (ACL). The ACL sets out regulations on marketing and false and misleading claims. As a business owner, you should not make any marketing claims that you cannot substantiate or offers you cannot honour. If your business accepts online orders, you will also be subject to providing website visitors with a link to a Privacy Policy and Website Terms of Use. There are strict data regulations set out by the Australian Privacy Principles on how you can collect and use customer data.

Key Takeaways

To succeed in the pizza industry, pizza restaurants must be able to differentiate themselves through product offerings and service delivery. Due to the high competition within the industry, many businesses are now embracing gourmet and healthier options despite higher price points. There are also key legal considerations to factor in to succeed in this industry, including business structuring and leasing. Moreover, adhering to food regulations can prevent penalties and loss in profits. If you have any questions about setting up a pizza business, selling a pizza store or participating in a pizza franchise, contact LegalVision’s business lawyers.

Anthony Lieu

Next Steps

If you would like further information on any of the topics mentioned in this article, please get in touch using the form on this page.