10 Permits and Licences Needed To Open A Coffee Shop

Katherine Headshot

Katherine BoyarskyAuthor

Got java on the brain? We don’t blame you. Coffee is one of life’s great gifts, and we salute coffee shop owners for their tireless work in providing our daily cup of energy. 

If you’re thinking of opening up a coffee shop, you probably imagine a cozy spot for friends to gather over a cup of joe, complete with a top-of-the-line espresso machine and a gorgeous glass display case full of delicious baked goods. 

However, when you get down to it, there are a ton of details that go along with opening and running a successful coffee shop. Not least among them are a killer marketing plan, a business plan, and a fabulous website.  

But there’s one major hurdle that you’ll want to clear before you start drafting a menu and promoting your space on social media: coffee shop licences and permits. 

Every licence and permit is unique and has its own application. And each one takes varying amounts of time to secure, so you’ll want to leave plenty of time to get the proper licences and permits in place. While it’s a lot of information, don’t need to sweat it. We created this guide to cover all the coffee shop licences and permits you’ll need. 

icon RESOURCE

Restaurant Business Plan Template

No matter where you’re at in your restaurant ownership journey, a business plan will be your north star. Organize your vision and ensure that nothing is overlooked with this free template.

Toast

What Do You Need to Open a Coffee Shop?

1. Business Licence

A business licence will most likely be required to open a coffee shop in Canada. The specific licencing requirements, health and safety regulations, zoning bylaws, and other local requirements may vary depending on the province, territory, and municipality where you plan to operate. 

How to Get a Business Licence

Check out your local city or county’s zoning office to find the business licence application. If you Google “Your Province/Territory + Business Licence Application” you should be able to find it along with any requirements.

How Much Does a Business Licence Cost?

Like many of the following licences and permits in this guide, you’ll find that fees vary based on location. But there is often a cost of registration of approximately $200 at a federal level in Canada. Provincial costs can vary from $100-$400 approximately.

2. Registering an Operating Name`

If you plan to run your coffee shop under a different name than its legal name, you may need a trade name or operating name licence.

How to Get an Operating Name Licence 

Select a name that you want to use for your coffee shop. Ensure the name is unique and not already in use by another business in your jurisdiction. Consider conducting a name search or checking the business registry to confirm its availability. Once you have your coffee shop’s operating name picked out, you will most likely need to register it with the appropriate government authority in your province or territory. This information can usually be found on the website of the provincial government or the business registration office.  

How Much Does an Operating Name Licence Cost?

Licence fees to obtain an operating name can vary depending on the province or territory. Make sure to include the required payment along with your application.

3. Retail Food Service Licence

As a coffee shop, you’ll sell coffee and food products directly to the end buyer, which in this case, is the consumer. This means you’ll likely need a retail food service licence as opposed to a wholesale food service licence. 

How to Get a Retail Food Service Licence

Oftentimes, either your province’s department of health or another local public health agency regulates the issuance of retail food service licences. The specific requirements and regulations for obtaining a retail food service licence may vary depending on the province, territory, and municipality where your coffee shop is located.

How Much Does a Retail Food Service Licence Cost? 

The fee for a food service licence can vary by location and the type of service you want to offer but generally is around $250.

4. Goods and Services Tax / Harmonized Sales Tax

If you plan to sell any products in addition to coffee, such as merchandise, packaged coffee beans, or other items, you may need to also register for a Goods and Services Tax (GST) or Harmonized Sales Tax (HST) account. The GST/HST is a value-added tax on goods and services provided in Canada. 

How to Register for GST / HST

Registration and remittance requirements for GST/HST vary based on your business's annual sales revenue. It's recommended to consult the Canada Revenue Agency (CRA) or a tax professional to determine if you need to register for GST/HST.

How Much Does it cost to register for Goods and Services Tax / Harmonized Sales Tax? 

Good news: the cost to register for Goods and Services Tax (GST) or Harmonized Sales Tax (HST) in Canada is generally free. There is no fee charged by the CRA for registering for GST/HST. However, there may be costs associated with meeting the tax obligations once you are registered.

5. Sign Permit 

Once you’ve got the location established, you’ll need a sign to point customers the right way — which is through the entrance of your coffee shop! However, before you start plastering the neighbourhood with flashing signs to show the way, you’ll need to get a sign permit approved by your local city government. Every city has its own requirements when it comes to regulating the sign’s size, location, lighting, and visibility. 

How to Get a Sign Permit

Check your local city government’s website for sign permits and regulations. Oftentimes, larger cities with more businesses have more restrictions and requirements in place for sign permits.  

How Much Does a Sign Permit Cost? 

Sign permit fees vary based on the sign’s size and your location. Expect to pay at least $50 or more. 

6. Coffee Shop Insurance

So, technically insurance isn’t a permit or a licence. However, it’s critical to your coffee shop that you have the proper protections in place in the event of damage to the property or injury to an employee or patron. In fact, provincial law often requires many types of insurance for coffee shop owners to carry. 

We recommend looking into the following policies for your coffee shop:

  1. General Liability Insurance: General liability is a must-have for any business, but especially coffee shops that come into contact with guests daily. General liability covers you as the owner if you, your employees, your coffee, or other food products accidentally cause harm to a patron. 
  2. Business Property Insurance: Keeps your coffee shop’s interior and exterior covered in case of accidental damage.  
  3. Workers’ Compensation: If you plan to have employees help run your coffee shop, there’s a high likelihood that provincial law requires workers’ compensation insurance on your part to keep your employees protected.  
  4. Commercial Auto Coverage: Planning on taking your coffee shop mobile? Or, will you have a company vehicle to transport supplies when necessary? If either of these situations applies to you, you will need a commercial auto policy that covers your company vehicle in case of a car accident.


7. Food Handler’s Permit 

To allow your employees to serve food to paying guests, they’ll need to have a food handler’s permit. This permit shows they have the necessary qualifications and training needed to safely serve food to the public. 

How to Get a Food Handler’s Permit

Typically, either your local health authority or regulatory agency will issue food handler permits. Oftentimes, those who wish to obtain this permit will need to complete a food safety course. 

How Much Does a Food Handler’s Permit Cost?

A food handler’s permit could cost around $100 or more. Check your local requirements to find out the exact fee. 


8.Building Health Permit

Wait a minute. Not only do your employees need a health permit but the building does too? Yep, that’s right! Coffee shops typically need an inspection to prove to the public and the province that it is in sanitary condition and fit to serve food to customers. Requirements for a building health permit can vary depending on the province or territory, as well as the local municipality where your business is located.

How to Get a Building Health Permit

Google “Your Province + Building Health Permit” to find out what your province requires when it comes to obtaining and holding a building health permit. 

How Much Does a Building Health Permit Cost?

Building health permit costs vary by location. However, they can run anywhere from $50 to $1000 so make sure you double check your requirements to know what the cost will be upfront.

9. Liquor Licence

Liquor? In a coffee shop? Sign us up! While most coffee shops stick to lattes and cold brews, some expand their offerings to include alcoholic beverages. Check out Rosella Coffee & Wine Bar for tips to perfect the coffee shop by day, wine bar by night concept. 

How to Get a Liquor Licence

Due to the consequences that can go along with serving alcohol, liquor licences often come with the most stringent requirements out of all of the coffee shop permits and licences you’ll need. Different provinces and territories offer various licence categories, such as a Restaurant Licence, Lounge Licence, or Catering Licence, so you will need to determine which option best suits your coffee shop, depending on factors like the type of alcohol you plan to serve and your hours of operation. Get in touch with the provincial or territorial liquor control authority or commission responsible for issuing liquor licences. They will provide you with the necessary information, forms, and guidance on the application process. 

How Much Does a Liquor Licence Cost?   

Plan to invest at least a few hundred dollars in your coffee shop’s liquor licence. 


10. Live Entertainment Licence 

Coffee shops striving to liven up their atmosphere often offer live entertainment on select days. Whether you plan to host a solo guitarist, a slam poetry event, or a spoken word artist, you’ll need a live entertainment licence first.

How to Get a Live Entertainment Licence

Check your city’s entertainment commission for regulations on live entertainment. 

How Much Does a Live Entertainment Licence Cost? 

Live entertainment licences vary based on province and territory, as well as the local municipality where your business is located. However, they can also vary based on the size of your coffee shop, whether you have performances indoors or outdoors, and whether the entertainment will go on late into the night,

Coffee Shop Licencing and Permit Laws in Canada

As you can see from the permits and licences in this guide, there are many hoops to jump through to open up a coffee shop. However, all of them help keep you, your customers, and your employees safe and your business in compliance with provincial law

Fortunately, there are very few, if any, federal regulations for your coffee shop that you’ll have to worry about since coffee shops aren’t regulated by any federal agency (beyond the CRA for taxes). The primary regulation of coffee shops, including health and safety requirements, licencing, permits, and inspections, is typically carried out at the provincial and municipal levels. It’s critical that you’re aware of licences and permits needed at the provincial and municipal levels to keep your coffee shop in good standing.

Claiming ignorance is never a defence when it comes to following local laws and regulations. Double check your local city government’s websites to ensure you know which permits and licences you need and how to apply for them. 

One more thing. Make sure you keep all insurance policies, permits, and licences current and up-to-date — otherwise you could face a huge fine or even possibly lose the right to hold that licence! It’s always easier to renew something than it is to have to start from scratch and apply all over again.

Next Steps to Open Up Your Coffee Shop 

If you have the drive, dream, and determination, all you need is to follow through with the plan. Think of the amazing memories your customers will create in your coffee shop — just follow the right rules, obtain the permits and licences you need, and you’re set to open your doors! 

There’s no doubt that the cost of licences and permits alone is enough to put a dent in your coffee shop’s budget. However, if you’re aware of all the costs of opening a cafe from the beginning, you’ll be able to plan accordingly to make the numbers work. 

Ready to hit the ground running? 

With a solid business plan, the necessary permits and licences, and the right amount of caffeine, you’ll be ready to seize the day and get your dream coffee shop ready to go. 

Related Coffee Shop Resources

icon RESOURCE

Restaurant Business Plan Template

No matter where you’re at in your restaurant ownership journey, a business plan will be your north star. Organize your vision and ensure that nothing is overlooked with this free template.

Toast

Is this article helpful?

DISCLAIMER: This information is provided for general informational purposes only, and publication does not constitute an endorsement. Toast does not warrant the accuracy or completeness of any information, text, graphics, links, or other items contained within this content. Toast does not guarantee you will achieve any specific results if you follow any advice herein. It may be advisable for you to consult with a professional such as a lawyer, accountant, or business advisor for advice specific to your situation.