Front of House, Back of House: The Legal Realities of Running a Cafe or Restaurant

The lease is the deal

Hospitality fit-outs are heavily capitalised and highly specific: extraction, grease traps, three-phase power, plumbing, cool rooms. That makes the lease the most important document the venue will sign. Pay attention to permitted use (including alcohol service, live music and trading hours), who owns and must remove the fit-out, make-good scope, options to renew, and how rent reviews work over the term. Where retail lease legislation applies — for example the Retail Leases Act 1994 (NSW) or the Retail Leases Act 2003 (Vic) — the landlord may owe disclosure and the tenant may gain protections, including limits on certain charges.

Approvals, food safety and licensing

Food businesses are regulated under state food legislation and the Food Standards Code, administered through councils, with notification, food safety supervisor and premises standards obligations. Separately, a change of use or extended hours may require development consent, and liquor service requires a licence under state liquor legislation. Check that the approvals in place actually cover the way you intend to trade, not the way the previous tenant did.

Staff, awards and underpayment risk

The most expensive legal issue in hospitality is usually payroll. Most venues sit under the Hospitality Industry (General) Award or the Restaurant Industry Award, and classification levels, penalty rates, overtime, breaks and any annualised salary arrangement all have to line up with the award and the Fair Work Act 2009 (Cth). Casual conversion, unpaid trials and "cash in hand" arrangements are recurring problem areas. An audit of rosters against award rates is inexpensive by comparison.

Menu pricing, surcharges and claims

Pricing must not mislead. Under the Australian Consumer Law, where a total price is quantifiable it generally must be displayed as a single figure, which affects how weekend and public holiday surcharges are presented. Card surcharges must not exceed the cost of acceptance. Menu descriptions matter too — "wagyu", "organic", "house-made" and allergen statements are all representations, and allergen accuracy carries safety as well as legal consequences.

Suppliers, equipment and delivery platforms

Coffee roaster agreements, equipment loans and POS contracts frequently include minimum volumes, long terms and personal guarantees. Delivery platform terms are largely non-negotiable, but you should still understand commission, who bears refunds, exclusivity and who owns the customer data. Read before signing, because these are the contracts that outlive optimism about trade.

Selling the venue

When it comes time to sell, buyers scrutinise the lease and its remaining term, the transferability of licences and approvals, employee entitlements, and whether equipment is owned, leased or subject to a security interest registered on the PPSR. Tidy documentation adds real value at sale.