Steps and Legal Aspects of Starting a Sushi Restaurant in San Francisco

Stepsand Legal Aspects of Starting a Sushi Restaurant in San Francisco

Stepsand Legal Aspects of Starting a Sushi Restaurant in San Francisco

Businessesoperate in environments that are controlled by laws that areformulated by federal, state, or local governments. Complying withthese laws reduce the conflict between the business and judicialsystem, which increase chances for the business to succeed. Sushi isa type of food that originated in Japan, but the rest of the world(including the United States) is craving for sushi (Martins, 2015).Therefore, sushi is a promising business that one can start in SanFrancisco. Legal aspects that are likely to affect the restaurantbusiness will depend on laws set by the city council of SanFrancisco, the state of California, and the federal government. Thispaper will analyze various steps and legal aspects that will arisewhen starting a sushi restaurant in San Francisco.


Thefirst step to consider when starting a sushi restaurant is thefeasibility study. The feasibility study is critically importantbecause it helps investor in considering the bigger picture of theproposed business and determines if the business will continue inoperation in the long-run (Marino, 2012). In the case of a sushirestaurant, the feasibility will focus on three major items. First,the feasibility will assess the cash flow of the business in order todetermine if the restaurant business can withstand financial risksthat it might face within the San Francisco market segment. Secondly,the study will determine whether adequate resources are available toget the project started. Third, a feasibility study will help in theassessment of market trends in order to determine the anticipatedgrowth of the sushi restaurant. Lastly, all legal aspects that needto be considered when starting and running the restaurant businessshould be identified in advance.

Preparingthe business plan

Afterconfirming the viability of a sushi restaurant business in SanFrancisco, the next step should be the preparation of a businessplan. The role of a business plan is to guide the investor in settingup the business, how to manage, and expand it with time (Martins,2015). Most importantly, the investor needs to determine the type ofbusiness structure that is appropriate for a sushi restaurant.Business structure is associated with several legal concerns becauseit determines whether the investor can be held personally liable foroccurrences (such as accidents and financial obligations) in thebusiness. A limited liability company is a relatively simplestructure and it will protect investors from being held personallyliable for business occurrences.

Raisingthe start up capital

Establishingthe restaurant will require a moderate amount of startup capital. Theneed to buy, rent, or lease the facility where the restaurant will beestablished will increase the amount of startup capital required(Martins, 2015). Legal aspects of financing sourcing depends on thefinancing sourcing method that investor selects. For example, takinga bank loan will require a contract that can be legally enforced,especially when the business fails to service the loan.

Securinga space for the sushi restaurant business

Althougheveryone has the right to start and run a business in San Francisco,the leadership of the city had zoning and land management policiesthat restrict areas that are used for commercial and residentialpurposes. This implies that a restaurant cannot just be establishedin any location. For example, the investor should acquire and studythe Residential-Commercial plan designed by the San FranciscoPlanning Department and select a facility that is located within aregion that is designated as commercial (City Council of SanFrancisco, 2015). The zoning laws and policies also determine thetype, height, and size of the building. The leadership of SanFrancisco allows restaurants to be operated in regions designated asretail business districts (CCSF, 2014).

Theinvestor is also required to apply for a Neighborhood Notification,where by the San Francisco Department of Planning issues businessneighboring the proposed area a notification that a restaurant willbe opened in their vicinity. The notification is issued at least 30days before the restaurant is officially opened. A Conditional UseAuthorization should be acquired from the City Council of SanFrancisco in case the proposed building was not used for a restaurantbusiness before (CCSF, 2014).


Afterselecting the business zone and the building, the investor shouldapply for different licenses from different government agencies. Thecertificate of registration of a limited liability company can beobtained from the Secretary of States that is located in SanFrancisco (CCSF, 2015). The City Council of San Francisco issuesrestaurant licensing depending on the type of restaurant that theinvestor has decided to start. For example, Section 790.90 of thePlanning Code allows the city council to issue a limited restaurantlicense for businesses that serve food and drinks to clients forconsumption off or on the building that may or may not the seating(CCSF, 2014). The normal restaurant license is issued to businessesthat serve food and drinks to clients for consumption off or on thebuilding, but have seating.

Beforestarting operations, the restaurant should make an EnvironmentalEvaluation Application to the city council department that isresponsible for determining the environmental impact of therestaurant. However, this is practiced in the entire state ofCalifornia under the California Environmental Quality Act (CCSF,2014). In most cases, restaurants use live music and otherperformances to attract customers. For one to do this in SanFrancisco, an entertainment license should be obtained from theEntertainment Commission as specified in Planning Code. Mostimportantly, a permit to operate a restaurant in San Francisco isissued by the City Council after the building has been certified asappropriate for that type of business.

Apartfrom the aforementioned licenses and permits, there are threeadditional permits that a restaurant cannot operate without. First,all restaurants and business that deal with human food must obtainthe food safety certificate after being assessed and approved tohandle foods and soft rinks (CCSF, 2014). Secondly, restaurants thatintend to sell bear of spirits should obtain a liquor license. Third,the health and safety license is mandatory for all restaurantbusinesses operating in San Francisco. The three types of licensesare issued to businesses after being confirmed that they have thecapacity to serve quality and healthy foods and drinks. In otherwords, the licenses are part of the city Council’s efforts toprotect consumers from harmful foods and drinks.


Aftergetting all licenses and permits from the state government ofCalifornia and the city council of San Francisco, the investor shouldthen hire employees who will help in running the restaurant. Theinvestor will employ waiters, chefs, security staff, cleaning staff,and restaurant managers among other employees. The process ofemploying and retaining employees in the restaurant will be guided bynational, state, city council’s labor laws. The investor is obligedto observe all provisions of the Equal Employment Act that requireemployers to avoid discriminating people on the basis of their socialcharacteristics, such as religion, race, and disability among otherfeatures (CCSF, 2013). Therefore, the process of recruiting employeesshould be fair and focus on the individual’s ability to deliverquality services, instead of their social characteristics.

TheSan Francisco set of labor laws regulates how all employers shouldtreat their employee right from the time of recruitment. For example,all employees working for more than 2 hours a day have the right toreceive the citywide minimum wage of $ 12.25 (U.S. Department ofLabor, 2015). The restaurant employer should also ensure that theworkplace is safe for all employees, and create an environment withpredictable work arrangements for all employees (U.S. Department ofLabor, 2015). Although, these labor laws are also provided by thefederal as well as the state governments, the city council of SanFrancisco has adjusted them to fit the city’s environment.


Sushirestaurant is a viable investment in San Francisco, but an investorshould comply will all laws. Before starting the restaurants, aninvestor needs to understand different business and residential zonesin San Francisco in order avoid starting a business in the wrongzone. Apart from the determination of the suitable zone, an investorshould acquire all licenses and permits before commencing operations.Labor laws are also strict and should be observed to prevent therestaurant from starting on the wrong footing by conflicting withemployees and the judicial system.


CityCouncil of San Francisco (2013). Equal employment opportunity. CityCouncil of San Francisco.Retrieved May 3, 2015, from

CityCouncil of San Francisco (2014). Restaurant or food service use. CityCouncil of San Francisco.Retrieved May 3, 2015, from

CityCouncil of San Francisco (2015). Zoning use district summaries.CountyCouncil of San Francisco.Retrieved May 3, 2015, from

Marino,J. (2012). Whya feasibility study is important for any business.Chagrin Falls: TrumanMox LLC.

Martins,A. (2015). How to start a sushi restaurant. TopBusiness Ideas.Retrieved May 3, 2015, from

U.S.Department of Labor (2015). San Francisco labor laws: Citywide. CityCouncil of San Francisco.Retrieved May 3, 2015, from