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Phase III: Location, Licenses, and Regulations

  • philogen888-a
  • May 4
  • 7 min read

Updated: May 6

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This is where many critical steps happen. Requirements vary based on your type of food business.



Find a location (if not home-based or mobile)

If you are not running your food business from home or a mobile food truck, you need to choose a good location for your restaurant, café, bakery, or commercial kitchen. The right location can help your business succeed — the wrong one can hurt sales, increase costs, or cause zoning problems.

  1. Why is location important?

    • It brings in customers (more people = more sales).

    • It affects rent and cost (busy areas cost more).

    • It affects your permits and zoning (some buildings are not allowed for restaurants).

    • It affects your daily work (parking, deliveries, storage space).

  2. How to choose the right location:

    1. Think about your target customers

      • Who are your customers? – Students, families, office workers, tourists?

      • Where do they spend time? – Downtown, near schools, near offices, near residential neighborhoods?

    2. Check foot traffic and visibility

      • Are there many people walking or driving by?

      • Can they see your shop or restaurant from the street?

      • More visibility usually means more customers.

    3. Check the rent and expenses

      • How much is the monthly rent?

      • Does it include utilities like water, electricity, gas?

      • Do you need to pay a deposit or make improvements before opening?

    4. Check the size and layout

      • Is the space big enough for your kitchen and customer area?

      • Does it have the right plumbing (water, grease traps) and ventilation?

      • Is there storage space for food and supplies?

    5. Check zoning and permits

      • Ask the City-County Planning Department if you are allowed to open a food business at that address.

      • Some buildings are not zoned for restaurants or food use. You may need a zoning certificate or inspection.

    6. Check parking and delivery access

      • Is there parking for customers?

      • Can delivery trucks reach your business easily?

      • Is it accessible for people with disabilities?

  3. Other options if you don’t need a full location

    • Shared commercial kitchen (commissary): Rent by the hour or day; already set up for food businesses.

    • Pop-up location or market stall: Temporary space at a farmers market or event.

  4. Key tips:

    • Visit the location at different times of day to see customer flow.

    • Ask other small business owners in the area about their experience.

    • Start small and expand later if possible.


Register your business (Federal and State)

  1. What does “register your business” mean?

    It means officially telling the government that you are opening a business. You must register with:

    • Federal (U.S.) government for taxes

    • State (North Carolina) government for legal permission to operate

    Registering makes your business legal and allows you to:

    • Pay taxes

    • Hire employees

    • Open a business bank account

    • Get licenses and permits

  2. Step-by-step guide to register:

    1. Federal (U.S.) Registration

      Get an Employer Identification Number (EIN) from the IRS (free). You'll need this even if you don't plan to hire employees initially, especially if operating as an LLC or corporation.

      • This is a tax ID number for your business (like a Social Security number for a company).

      • You need it for: Taxes; Hiring employees; and Opening a bank account

      • How to get it:

        1. Apply for free at the IRS website: IRS EIN Application

        2. You will receive the number immediately.

    2. North Carolina (State) Registration

      1. Choose your legal structure: Sole proprietorship, partnership, LLC, or Corporation.

        Example: Many small businesses use an LLC for legal protection.

      2. Register with NC Secretary of State: Register your business name and legal entity with the North Carolina Secretary of State (unless you are a sole proprietor using your own legal name).

        • Go to: NC Secretary of State

        • If you are creating an LLC or Corporation:

          • File Articles of Organization online or by mail.

          • Pay the registration fee (usually $125 for an LLC).

      3. Register for State taxes: Obtain a North Carolina Sales and Use Tax ID from the NC Department of Revenue if you will be selling taxable goods (most food items).

        • Go to: NC Department of Revenue

        • Apply for a sales tax ID if you are selling taxable items (like food).

        • Register for employee tax withholding if you hire workers.

  3. Documents you usually need:

    • Business name

    • Business address

    • Owner name and contact

    • Legal structure (LLC, Corporation, etc.)

    • EIN (for state registration)

    • Personal ID (passport, driver’s license)


Durham Health Department Approval (Critical)

Before you open your restaurant, café, bakery, food truck, or catering business, you must register for Durham County Food Service Establishment Application. The Health Department must visit your kitchen or food space and check that everything meets food safety rules. This is called a health inspection — if you pass, you will get a permit to operate. Without this permit, you cannot legally serve or sell food to the public.

This permit is issued by the Durham County Department of Public Health (DCoDPH), Environmental Health Division.

  1. It shows that your food business:

    • Meets food safety rules

    • Has passed a health inspection

    • Can legally serve food to the public

  2. To apply,

    1. Call or email Durham County Department of Public Health, Environmental Health Division. Ask to speak with the Food and Lodging Program. They will explain the local rules and forms you need.

    2. Complete the plan review (if opening a new or remodeled space):

      • Submit your floor plans, kitchen layout, equipment list, and menu for review.

      • This step is called a plan review and ensures your kitchen meets safety standards.

      Example document to submit: Menu; Floor plan with sinks, refrigerators, cooking equipment; and Equipment spec sheets

    3. Submit the permit application:

      • Fill out the Food Service Establishment Application form provided by the county.

      • Include details like: Business name and owner name; Business address and phone; Type of food service (restaurant, mobile unit, etc.); Hours of operation; Water supply and waste disposal plan.

    4. Pay the application fee: Fees depend on the type of establishment. Example (check with the county for exact rates):

      • Restaurant: ~$250

      • Mobile food unit: ~$75–$125

      • Catering: ~$125

    5. Schedule and pass the health inspection: After your paperwork and fee are accepted, an inspector will visit your kitchen or food truck. They will check:

      • Food storage

      • Equipment

      • Handwashing sinks

      • Temperature controls

      • Cleanliness

      You must pass the inspection to receive your permit.

    6. Get your permit and post it: Once approved, you will get a Food Service Establishment Permit. You must display this permit in your business where customers can see it.

    7. Key tips

      • Start early — the whole process can take 4–8 weeks or more.

      • Talk to the Environmental Health office before you sign a lease or buy equipment.

      • Stay organized: keep copies of your application, fee receipt, and inspection reports.

      • If using a shared kitchen (commissary), check if they already hold a permit — you may still need your own.


Additional registrations you may need in Durham

  1. ServSafe Food Protection Manager Certification

    1. Who needs it?

      Durham (and all of North Carolina) requires that each food business has at least one person with a food safety certification. This certification shows that:

      • You understand how to handle, cook, and store food safely.

      • You know how to prevent foodborne illnesses (people getting sick from food).

      • You follow important safety steps like handwashing, avoiding cross-contamination, and keeping foods at safe temperatures.

    2. Where to get it?

      The most common and widely accepted course and exam are:

      ServSafe Food Protection Manager Course and Exam

      The one-day course, which costs $150, is offered quarterly. The exam is offered the third Wednesday of each month at a cost of $75. Once you pass, you get a certificate valid for 5 years.

    3. Where to find classses near Durham?

      • Durham Technical Community College: offers ServSafe classes

      • North Carolina Restaurant & Lodging Association (NCRLA): offers classes across the state

      • ServSafe.com: Offers online courses and exams

  2. City of Durham Business License (Privilege License)

    1. Who needs it?

      Most businesses operating inside Durham city limits, including restaurants, cafés, catering services, and food trucks.

    2. Where to get it?

      Durham City-County Tax Office

      Phone: (919) 560-0300

  3. Zoning and land use approval

    1. Who needs it?

      Anyone opening a restaurant, bakery, café, or food truck at a specific location. You must confirm the location is zoned for food service. If you rent space, ask the landlord if zoning is already approved for food use.

    2. Where to check?

      City-County Planning Department

      Phone: (919) 560-4137

  4. Sign permit (if adding exterior sign)

    1. Who needs it?

      If you install outdoor signs (lighted signs, banners, sidewalk signs) for your business.

    2. Where to apply?

      City of Durham, Development Services Center

  5. Fire inspection and approval

    1. Who needs it?

      Any business where people gather or where cooking is done.

    2. Why?

      The Fire Department will check for: Fire extinguishers; Emergency exits; Safe electrical and gas connections; and Cooking ventilation systems

    3. Where to check?

      Durham Fire Department – Fire Prevention Division

      Phone: (919) 560-7933

  6. Grease Trap Permit (for restaurants with fryers, dishwashers, etc.)

    1. Who needs it?

      Restaurants that dispose of grease or oil.

    2. Where to apply?

      City of Durham Water Management, Industrial Waste Control

  7. Alcohol license (if selling beer, wine, spirits)

    1. Who needs it?

      Businesses serving alcohol.

    2. Where to apply?

      • North Carolina Alcoholic Beverage Control (ABC) Commission → state license

      • City of Durham for local ABC approval

  8. Key tips

    • Contact the Durham Small Business Advisory Office or Durham Tech Small Business Center for free help navigating these steps.

    • Start with:

      1. Business license

      2. Zoning

      3. Food service permit

      4. Fire inspection


Home-based food business (“Cottage Food Operations”)

North Carolina has specific laws for foods made in home kitchens ("Cottage Food Law"). These generally apply to low-risk foods (baked goods, jams, candies) sold directly to consumers.

Restrictions: There are limits on the types of food, annual sales revenue, and where you can sell. You generally cannot sell potentially hazardous foods (requiring refrigeration, like cheesecakes or meals with meat) under this law. You usually do not need a full Health Department permit if you strictly follow cottage food rules, but labeling and registration might still be required. Check directly with the NC Department of Agriculture & Consumer Services and Durham County Health Dept for specifics. If you plan to sell meals or higher-risk items, a home kitchen is usually not permitted; you'd need a commercial kitchen.


Insurance

Business insurance helps protect your food business if something goes wrong. Important types of insurance for business:

  1. General liability insurance: Covers accidents, injuries, or damage that happen to customers or visitors at your business. Recommended for all businesses, especially restaurants, cafés, food trucks, and caterers.

  2. Property insurance: Covers damage to your building, equipment, and inventory (food, supplies) from fire, theft, vandalism, or storms. If you rent your space, your landlord may require you to carry this.

  3. Workers’ compensation insurance (if you have employees): Required by law in North Carolina if you have three or more employees. Covers medical costs and lost wages if an employee is injured while working.

  4. Product liability insurance (highly recommended for food businesses): Protects you if someone claims your food made them sick or caused harm. Covers legal fees, medical bills, or settlements.

 
 
 

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