As any foodservice operator knows, the food business is changing daily. Margins are thin, competition is fierce and fickle consumer demand and constantly changing dietary fads create increased daily pressure on operators. There numerous legal issues you should consider to give you a leg up.
Type of Business Entity
While many food service companies may operate as sole proprietorships, it is always better to operate under the umbrella of a legal entity that will protect you as the owner from personal liability. This is particularly so in the food service industry where you are feeding people (or distributing to those who do) and interacting with a multitude of guests and employees. Typically, a corporation or limited liability company (LLC) is the way to go. And if you open in more than one location or operate separate food service businesses, you would be well advised to set up a separate corporation of LLC for each operation; this way only one entity’s assets will be at risk in the event of a lawsuit.
Intellectual Property Rights
Nearly every food service business creates intellectual property, and these assets can be very valuable in the highly competitive foodservice industry, particularly when your business becomes successful.
One of the most commonly used methods of protecting your food service business intellectual property rights is obtaining trademark protection for any distinctive marks, emblems or symbols or form of words. The protected mark must be something that distinguishes your business from others and be distinctive, i.e., not something generic like “great food.” In order to obtain the right to use a trademark, an application must be filed with the United States Patent & Trademark Office. Most businesses retain an attorney to file the application.
Another form of intellectual property common in the foodservice sector are copyrights. The purpose of a copyright is to protect creative work and to grant authors the exclusive privilege to produce, create or display the work. It may be possible to copyright a book containing recipes and sometimes even certain recipes themselves or the method or technique of preparation of food products.
In addition to organizing a business entity and protecting intellectual property, food service operators need to obtain all appropriate permits and licenses. The permitting and licensing process varies widely from state to state and even city to city and county to county. Often local government offices can be a great resource for determining what type of licensing and permitting you will need for your business. In addition, you will likely need additional licensing if you serve or distribute alcohol. Your business may also be subject to food and safety health inspections.
With the foregoing in mind and, facing the legal side of the foodservice industry does not have to be a daunting task.
If you have any questions in this area, please contact:
Jonathan M. Weis at:
firstname.lastname@example.org or 312-368-0100.