Opening your own ice cream business can be a profitable venture. However, before you get sidetracked experimenting with flavours, you need to ensure that your ice cream business complies with its legal requirements. There are many legal considerations involved with opening a business, surrounding:
- business structuring;
- licensing requirements;
- lease requirements; and
This article will go through these considerations and outline what you need to know about opening an ice cream business.
Should You Run a Franchise Business?
You should first consider whether you want to invest in an existing successful franchise. This may mean running the daily operations of a store like Royal Copenhagen. Or, are you seeking to open your own independent ice cream business?
Purchasing a franchise can be beneficial as you will be using a tested model that has already proven its success. Furthermore, you will be able to build upon the existing brand and its goodwill.
However, buying a franchise can be disadvantageous as there are initially high start-up expenses. Furthermore, there are strict administrative requirements for record keeping. Additionally, the reputation of the other franchises can also affect your sales.
Licensing Your Ice Cream business
Once you have decided on the business structure for your ice-creamery, you should apply for a licence with your local council. To have the correct licensing, you will need to determine your food business classification. The NSW Food Authority classifies ‘ice-cream and ice-cream mix’ as ‘dairy processing’. Dairy processing businesses need to complete the license application form for a ‘food premises to produce, process or store dairy products’. You cannot commence operations until the council informs you that they have approved and processed your licence application.
Prior to the approval of your licence, a licensing audit or inspection will be carried out to ensure compliance with the Food Standards Code. The Code sets out the specific requirements for food business’ and food handlers that ensures the safety of food. It requires anyone handling food to have skills and knowledge in food safety and hygiene. Furthermore, your ice-cream business must take all practicable measures to protect your ice-cream from the likelihood of contamination.
The council can reject your license application if the result of the audit or inspection is unacceptable. They will then write to you within ten working days of receiving your licence application to let you know whether any further information is required. You will need to pay a licence fee which will be calculated based on the number of full-time food-handlers involved in your business.
The space that you choose to operate your business is crucial to your profitability. Wherever you choose to operate from, you will need to understand the terms of your commercial lease. This lease will outline the frequency that you must pay a specified amount of rent. Furthermore, it may include a clause that prescribes your right to renew the lease. Your commercial lease will include two key dates that you will need to be aware of. These are the:
- handover date when you can start the fit out of the premises; and
- lease commencement date when the lease will actually commence, and you’re required to pay rent.
Once you have secured the location, you will need to figure out how many staff members you require. Whether it is two or 20, you need to make sure they undergo proper training for your workplace. It is a legal requirement in Australia that all employees who handle food be trained in food safety. Providing an employee manual or handbook that is accessible online and onsite is a sensible way to ensure that all staff understand their food safety obligations.
When opening an ice cream business, it is essential that you comply with your legal obligations. You will need to consider whether you want to open a branch of an existing business’ franchise or open your own business. Furthermore, you need to be aware of your obligations surrounding;
- leasing; and
- hiring employees.
If you have any questions about opening an ice cream business, contact LegalVision’s business lawyers on 1300 544 755 or fill out the form on this page.
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