Chicago Restaurant Licensing Regulations

Guide to Starting a Restaurant

The Plan! – Overview to Starting a Restaurant

*** Starting a restaurant in Chicago is a BIG endeavor! ***

How it’s done:

① Set up a meeting w/ your BACP Business Consultant

② Obtain Zoning and Building Approval

③ Get your Retail Food Establishment License (…and any other licenses you may need)!

④ Get all of your approvals and prepare your business for city inspections.

Who Needs One?

Retail Food Establishment License

Who Needs One?

• Restaurants • Cafes, Coffee Shops, and Delis • Bars, Taverns, Nightclubs • Banquet Halls • Catering Kitchens • Grocery Stores • Convenience Stores

• Coffee Shops • Grills and Concession Stands • Vending Machine Businesses • Fruit and Vegetable Markets • Meat and Fish/Seafood

Markets

Any place that serves or sells food or drink products at retail requires a Retail Food Establishment License.

Only places that sell non-perishable, pre-packaged

foods are excluded. Examples include:

Guidelines • The license must be renewed every two years

• A separate license is needed for each business location

• Application Fees:

• 0 – 4,500 sq. ft. = $660

• 4,501 – 10,000 sq. ft. = $880

• 10,001+ sq. ft. = $1,100

• If your restaurant has a maximum occupancy of more than 100, you will also need to apply for an “occupancy capacity sign”.

Note on Taxes – Restaurants in Chicago also must pay a “restaurant tax”:

• This tax is 0.25% on the retail cost of all food and beverages sold.

• Exception: If the restaurant has less than $80,000 annually in taxable sales, then it is exempt.

Getting off the Ground The RFE Process

Passing Inspections

Other Pitfalls

Retail Food Establishment License Process

Before a License can be Issued One Option: Set up a meeting with a BACP consultant (312-74-GOBIZ) and

fill out the Restaurant Start-up Worksheet http://www.cityofchicago.org/content/dam/city/depts/mayor/Restaurant/StartupWorksheet.pdf

Obtain a Chicago Food Sanitation Certificate

Register your entity with the State of Illinois http://www.cyberdriveillinois.com/departments/business_services/

Register for Federal and Illinois tax numbers

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Apply-for-an-Employer-

Identification-Number-(EIN)-Online);http://www.revenue.state.il.us/businesses/register.htm

Before a License can be Issued (cont’d) Obtain zoning and location approval

Even if the business is appropriately zoned, and no construction is

required, additional zoning/location restrictions appear for: Liquor License Public Place of Amusement (PPA) License

Ensure parking is resolved

Resolve outstanding city debts owed by yourself or any business officer such as parking tickets, water bills, child support payments, or any other type of fines owed to the city.

RFE License Step 1: Initial Paperwork Submit an application to the BACP through your BACP consultant, or online

https://webapps.cityofchicago.org/LicenseApplicationWeb/pageflows/welcomePageFlow/WelcomePageFlowController.jpf

You will need:

Business Information Sheet http://www.cityofchicago.org/dam/city/depts/bacp/businesslicenseforms/bis2010.pdf

Tax Numbers (Illinois, Federal)

Legal Entity Information, Information about ownership Chicago Food Service Sanitation Certificate Lease or proof of ownership of the property Photo I.D. Public Way Use information (if any)

RFE License Step 2: Public Way Use Public Way Use (PWU)

http://www.cityofchicago.org/content/dam/city/depts/mayor/Restaurant/SectionGPublicWayUse.pdf

Consulting with the BACP may help Common types:

Sign Installation Permit Signs, canopies, and/or lights Sidewalk Café Driveway/alley permit Loading zone Necessary if no driveway or alley allows for deliveries Standing zone for non-commercial pickup

RFE License Step 3: Other Licenses While not part of your retail food establishment license, ensure that you

obtain your Liquor and Public Place of Amusement licenses before continuing to inspections

RFE License Step 4: Health Inspection A guide is found here:

http://www.cityofchicago.org/content/dam/city/depts/mayor/Restaurant/SectionHInspectionGuides.pdf

Common areas of failure

Overall Timeline

Obtaining a Retail Food Establishment License Resources:

To contact the city with any questions: Phone: 312.74.GOBIZ (312.744.6249) restaurant@cityofchicago.org

All required forms, and FAQs are available at: http://www.cityofchicago.org/city/en/depts/may

or/restaurant/restaurant_startup_program.html

A detailed guide is available here: http://www.cityofchicago.org/content/dam/city/d

epts/mayor/Restaurant/RestaurantGuideFinal.pdf

Other Licenses Liquor

Amusements & Entertainment

Outdoor Cafes

Permits

And more….

Liquor Licenses Consumption on Premises – Incidental Activity License

• For businesses such as restaurants, hotels, and theaters, where the sale of alcohol is only an incidental or secondary activity.

• Fee: $4,440

• For businesses such as bars, pubs, nightclubs, or lounges, where the sale of alcohol, to be consumed on the premises, is the primary business.

• Fee: $4,440

Tavern License

Outdoor Patio License

• For businesses with an outdoor patio location, an additional license is required.

• Fee: $1,760

• Allows businesses to continue to sell alcohol until 4 am, Mon.-Sat., and until 5 am on Sundays.

• Fee: $6,040

Late Hour License

Liquor Licenses continued…

Packaged Goods License

• For grocery, convenience, and liquor stores, selling sealed beverages.

• Fee: $4,440

• Allows catering companies and catering restaurants to serve alcohol.

• Fee: $4,440 ($6,600 for out-of-state caterers)

Caterer’s License

Non-Profit Club License

• For non-profit clubs/societies, that promote some objective other than just the consumption of alcohol.

• Fee: $1,140

★ The BYOB Exception ★

BYOB is permitted in

restaurants (except on patios) without the need for a liquor

license! The only requirement is that the business not charge any direct or indirect fees (including

corkage fees).

Facts about Liquor Licenses!

Liquor licenses are renewed every two years

You also need to get an Illinois Liquor License

Obtaining and holding a liquor license is a complex process:

– Unique zoning issues & restrictions

– For example, a liquor license is not allowed within 100 ft. of a library, school, church, hospital or elderly home

– Avoid “dry” areas and “Moratorium districts”

– Some people may be ineligible!

– The local community is given the right to vote on the approval of your liquor license

– Added inspections

Other Licenses – Supplementary Licenses & Permits

Outdoor / Sidewalk Café License

•You are allowed to sell food on an outdoor patio area, as long as you have received a Sidewalk Café License (and passed all required health and public use regulations).

•Note: You will also need an Outdoor Patio Liquor License if you hope to sell alcohol. And if you want to allow dogs on your patio, you’ll need a Dog Friendly Dining Areas License as well.

Public Place of Amusement License

•PPAs include movie theaters, concert halls, bowling alleys, and comedy clubs. They also include businesses with 2+ pool tables, 3+ arcade games, karaoke & DJS, dance clubs, and sports stadiums.

•PPAs come with a number of additional requirements, including zoning restrictions and neighborhood sentiment votes

Use of the Public Way

• Required for signs, light fixtures, awnings, balconies, sidewalk cafes, understreet uses, etc.

• These require a permit from the city, including city council approval (which can take up to 60 days)

Loading/Unloading Zones, Driveways, and Other Permits

• Many other things related to the running of a successful restaurant require permits and city approval

• Before making any changes, make sure you check with your BACP consultant and city guidelines to evaluate what permits are needed.

An Example of Multiple Licensing!

A restaurant with outdoor patio seating that hopes to serve alcohol, will need (at a minimum):

1) Retail Food License 2) Sidewalk Café Permit 3) Consumption on Premises –

Incidental Activity Liquor License

4) Outdoor Patio Liquor License

Retail Food Establishment

License

Liquor License

Outdoor Patio

License

Public Way Use Sidewalk

Permit

Consumption on Premise –

Incidental Liquor License

Other Licenses – Alternative Licenses

Wholesale Food

License

For businesses engaged in the preparation, manufacturing,

canning, baking, bottling, etc. of food for wholesale.

A wholesale food license is an alternative to a Retail Food

License. However, if you engage in both retail and wholesale, then you only need a Retail

Food License.

Fee: $660

Food Peddlers & Farmers

Markets

For businesses selling fruit or vegetables from a wagon, cart

or basket, or stand.

Food peddlers are only permitted to sell “whole and uncut” fruits and vegetables.

Not permitted to sell any other food or beverage items, and

cannot handle or prepare food.

Separate regulations monitor farmers markets and non-

mobile food vendors.

Mobile Food

Dispensers

Food trucks, ice cream trucks, and catering vehicles must

obtain a Mobile Food Dispenser License

All food must be prepared or pre-packaged from a facility

with a Wholesale or Retail Food License. You may need an

additional license for outdoor seating.

Fee: $700 – $1700

Additional licensing is required if food is prepared on the truck.

The RULES of the ROAD

Intro to Mobile Food Licensing

AGENDA Types of licenses you can get

1. Mobile Food Dispenser (MFD) – 2 years (renewable); $700

2. Mobile Food Preparer (MFP) – 2 years (renewable); $1000

3. Mobile Desserts Vendor (MDV) – 2 years (renewable); $275

4. Produce Merchant License (PML) – 2 years (renewable); $275

What you need to know

1. License Application Process

2. Mobile Food Vehicle (MFV)/Mobile Frozen Desserts Dispenser (MFDD)

3. Complementary Licenses

4. Operational & Ongoing Requirements

5. Other Resources

APPLICATION PROCESS

• Meet with BACP – City Hall, 121 N. LaSalle St., Room 800

• Complete and Submit Business Information Sheet (MFDs/MFPs)

• Provide gov’t IDs for all applicants, owners, and business entity-controlling persons and registered agents

• Provide federal EIN + IL File # (if entity) + IL Dept of Revenue Account ID

• Supply name & address of cleaning/service provider for MFV/MFDD + storage location (if different)

• $350K/incident general liability insurance (propane/nat’l gas MFVs only)

ON-SITE INSPECTION

By CDPH & CFD (if applicable), scheduled with BACP

MFDD inspection will take place at licensed commissary

HEALTH CONSULTATION • Meet with CDPH

Sanitarian to review:

• Proposed menu with all planned food items

• Blueprints/plans for MFV

• Installed equipment specification sheets

• Fire Safety Permit (if applicable)

FIRE SAFETY PERMIT • Application: $100 fee +

required documents

• All MFVs with gas/electric generator or:

• Propane/nat’l gas: MFV operator must take fire safety class through BACP

• Fire suppression system: designer must submit plans to CFP; $150 fee to City

Mobile Food Vehicle (MFV)/Mobile Frozen Desserts Dispenser(MFDD)

• MFV Requirements

• Commercial use only; operated at all times by owner of valid driver’s license

• Hot and cold water access

• Waste water retention tank

• Washable solid waste receptacle – stored adjacent to, not within, MFV

• Fire safety permit if using propane/nat’l gas or electric generator or fire suppression hood

• No more than 40 pounds of propane onboard at any given time

• Business name & license # displayed prominently on both long sides of MFV

• Inspected every 90 days; maintain inspection records going back four periods

• Sinks: hand-washing + 3-compartment (MFP only)

• Free pre-application assessment by the CDPH + CFD (if applicable)

• Note: does not replace post-application inspection

• MFDD Requirements

• 2-3 wheeled motorized or non-motorized

• No electronic amplification devices, but bells are allowed!

• No frozen dessert-making machines

Other Pre-Operation Requirements

• Must pay all outstanding debt to City – applies to renewals as well

• Cannot begin operations until license issued & decal affixed to MFV/MFDD

Ongoing Requirements

• CFD fire safety inspections (if applicable)

• Full MFV/MFDD Inspection upon license renewal

• MFV: GPS positions reports going back six months to City upon request CPHD sanitation inspections

Complementary Licenses

• MFD: shared kitchen or retail food establishment ($330/$660)

• MFP: shared kitchen or commissary (retail food establishment license) + sanitation food manager certificate ($100)

• MDV: shared kitchen or commissary

• PML: public way permit ($75)

Operational Requirements

• All food must be:

• MFD: Prepared in licensed shared kitchen/retail food establishment ($330/$660)

• MFP: Stored in licensed shared kitchen/commissary

• Must change location every 2 hours (or less) unless produce stand

• Hours: 5AM-2AM (MFD/MFP); 10AM-10PM (MFDD)

• Location Restrictions

• 200 foot rule

• MFVs: from restaurants – except from 12-2AM for MFVs

• MFDDs: churches & schools while in session + nursing homes & hospitals

• Designated food stands – at least 21 proposed as of Oct 2012

• Private property – non-residential + written consent

• Produce stands: at least 50% must be in “underserved” areas

• GPS – permanent, public, active, accurate (~$125)

Additional Resources • City Guidance:

• MFD/MFPhttp://www.cityofchicago.org/city/en/depts/bacp/supp_info/mobile_food_vendorlicenses.html

• MDV: http://www.cityofchicago.org/dam/city/depts/bacp/general/mobilefrozendessertsdispenserfactsheet.pdf

• License Look-up: http://www.cityofchicago.org/city/en/depts/bacp/provdrs/bus/svcs/business_licenselook-up.html\

• BACP: 312-74-GOBIZ (744-6249)

• Food Truck Apps

1. The Chicago Food Truck Finder

2. TruxMap

3. Roaming Hunger

4. Truckster

• http://www.ij.org/clinic

Catering, Wholesale, & Shared Kitchens

Saturday, April 27, 2013

Four Licensing Schemes

Shared Kitchens &

Users Mobile Food

Wholesale Food

Retail Food Establishment

Four Licensing Schemes

Shared Kitchens &

Users Mobile Food

Wholesale Food

Retail Food Establishment

Catering

Shared Kitchens & Users

• Space: Two types of Shared Kitchens • Retail Food Establishment License +

Shared Kitchen Supplemental License

• Shared Kitchen License

• People: Two types of Shared Kitchen Users

• Short-term or Long-Term Shared Kitchen User License

Path to Catering

Catering

No Alcohol

Shared Kitchen Retail Food

Alcohol

Shared Kitchen

Caterer’s Liquor License

Retail Food

Caterer’s Liquor License

Shared Kitchen or Retail Food?

• Start up costs & operating capital

• Details of the business

• Long-term plan

Comparison

Retail Food

• Only issued to a commercial location

Shared Kitchen User

• Only issued to City of Chicago Food Sanitation Manager Certificate holders

• Application fees vary by the size of the space

• Valid for 2 years

• Short-term (90 days) & long-term options (2 years)

• Application fees vary by length of term

Pros & Cons

Retail Food

• Fixes location

• May require significant start-up costs

• Allows flexibility in food-related business decisions

Shared Kitchen User

• Allows flexibility

• Avoids normal start-up costs

• Requires updating for food-related business decisions (sometimes)

Caterer’s Liquor License

• License for the sale of alcohol to be dispensed as part of an off-site catering business

• $4,400 for 2 years

• Lengthy application

Cost Baseline for Catering

Catering

No Alcohol

Shared Kitchen Retail Food

Alcohol

Shared Kitchen

$4475 - $4730

Caterer’s Liquor License

Retail Food

$5060 to $5500

Caterer’s Liquor License

• Preparation, manufacturing, canning, baking, bottling, packing, distribution, storage, selling, or offering for sale at wholesale any product used for human consumption

• $660 fee

• BUT, only one license required

Wholesale Food Establishment

Conclusion

Shared Kitchens &

Users Mobile Food

Wholesale Food

Retail Food Establishment

Catering

Agriculture and Farming

April 27, 2013

What is Agriculture Anyway?

• Agriculture is producing crops, livestock, or animal products for commercial purposes

• Not you growing tomatoes for yourself in your home garden

Starting an Agriculture Business

• Step 1: Check Zoning

• Step 2: Get a Business License

• Step 3: Finding a Place to Sell

Step 1: Zoning

• Zoning is key

• Make sure that your location is zoned for your agricultural activity

• Check at www.cityofchicago.org/zoning

• New changes to the Chicago Zoning Code:

• Urban farms can now compost. Can only compost material produced on site. But can sell compost produced at farm.

• Urban farms exempt from some of the fencing and screening requirements they used to be subjected to. But not all! Make sure you check the rules before building a farm that can be seen from outside.

Step 2: Get a Business License

• No Agricultural Business Specific License

• Apply with Department of Business Affairs and Consumer Protection (BACP)

• Use the same steps associated with starting any other business

• Important: The current Chicago approach to Urban Farms not Ideal! Requirements out of step with realities of Urban Farming

Step 3: Finding a Place to Sell

• Food Carts and Stands

• Farmer’s Markets

• Grocery Stores

Food Carts

• First, follow all of the steps associated with starting any kind of food cart business

• Then deal with extra rules for selling produce

Produce Stands: Operational Rules

• Produce Merchants licensed to stay in place all day need to adhere to extra rules which include, but are not limited to:

• 1. You can’t equip your stand with electronic amplification devices

• 2. Unless specifically allowed by the commissioner of BACP, you can’t make sales between 10 pm and 6 am.

Produce Stands: Operational Rules

• 3. You can’t be in a place that impedes traffic. Either people or cars!

• 4. No portable generators

• 5. You can’t dispose of water or waste onto public or private property

• 6. You can’t sell non-produce items except for bottled water

• 7. You can only display produce in the designated produce area. Not on the floor or the side of the stand

Produce Stands: Operational Rules

• 8. You have to display a valid food vendor license

• 9. No open flames! So no candles, burners, etc.

• 10. You can’t allow the produce stand to touch any building or structure

• 11. You can’t operate a produce stand next to any fixed business engaged in selling the same product

• 12: You need to get a public way use permit if you want to operate on sidewalks

• 13. Very Important: 50% of your business has to be in one of Chicago’s food desert!

Food Carts: Written Records

• Produce Vendors need to keep written records

• Record date, time, and place of selling produce

• Also record written permission from owner of property certifying that you can use that property

Farmer’s Market

• You could also sell at a Farmer’s Market

Farmer’s Market: Getting a Permit

• Send an application and $25 fee per day you operate at a farmer’s market to the Chicago Commissioner of Cultural Affairs and Special Events

• The application will ask you for:

• 1. Your name and Address

• 2. Products for which sales license is required

• 3. Source of the Products

• 4. A warranty that the products are fit for human consumption

• 5. State Sales Tax Permit number

Farmer’s Markets: What can you Sell?

• 1. Whole and Uncooked Fruits and Vegetables, Fruit Juices, Edible Grains, Nuts and Berries, and Apiary Products or Cut or Potted Plants

• 2. In addition, the Commissioner can grant permission to sell pre-packaged or non-perishable food if the product is consistent with the character of the farmer’s market

• 3. New: With the recent Cottage Foods Act, you can now sell homemade jams and jellies, baked good, and dried herbs at farmer’s markets.

Farmer’s Market: Pilot Programs

• Get Excited!

• (But Not Much)

• The Commissioner also has the power to create up to five pilot program Farmer’s Markets where you can sell: Coffee, Tea, Hot Chocolate, Pretzels, Chestnuts, Popcorn, Cheese and Sausage

• If you want to sell any of these products, keep up to date with the commissioner’s office to find out if and when any of these pilot programs will be taking place

Farmer’s Markets: What you can’t do

• Generally, you can’t sell meat, poultry, milk or dairy products

• You can only sell products produced by you, your family, or your employees

• Without written consent from the Commissioner, you can’t cook, cut, or otherwise prepare food for sale at the farmer’s market

Food Vendors and Farmer’s Markets: Advantages

• Great way to sell product directly to customer

• Food carts can be pretty useful considering that some parts of Chicago have a desperate lack of grocery stores selling produce

Food Vendors and Farmer’s Markets: Disadvantages

• Really only for selling produce or minimally altered produce

• If you want to sell cooked food, these are probably not the best options for you. You might want to stick to a restaurant or a food truck

Thank You! • Thank you! And Good Luck!

• Extra Resources:

• Zoning Code of Chicago: http://www.cityofchicago.org/content/dam/city/depts/zlup/Sustainable_Development/Publications/Urban_Ag_Ordinance_9-1-11.pdf

• Chicago Municipal Code:http://www.amlegal.com/library/il/chicago.shtml

• Urban Agriculture FAQ: http://www.cityofchicago.org/city/en/depts/dcd/supp_info/urban_agriculturefaq.html

• Cottage Foods Act: http://www.ilstewards.org/content/12404