Restaurant Attorneys in New York, NY

As restaurant attorneys in New York City, we handle the different legal aspects related to establishing and operating a restaurant, which includes formation, leasing, employment, compliance, and acquisition matters.

Restaurant Formation

As restaurant attorneys, we can advise you on the appropriate legal structure to operate your restaurant, depending on your objectives. If there are multiple investors, a restaurant attorney can draft detailed membership, shareholder, or joint venture agreements to ensure that the roles, rights, and obligations of the co-owners are clarified.

We can then establish the legal entity by completing the necessary registrations with state and local authorities and provide you with an operating agreement and by-laws that will govern the handling of intra-corporate matters.

Once the legal entity is formed, a restaurant attorney can assist you in getting the necessary licenses and permits to operate the restaurant legally.

Leasing

A restaurant attorney can assist you in reviewing and negotiating the commercial lease agreement for the chosen location of the restaurant. The attorney can give advice to the client on standard provisions in commercial leases, as well as which provisions are reasonable and should be insisted upon without jeopardizing the successful signing of the commercial lease.

Health and Safety Compliance

Business, health and safety matters are highly regulated in the restaurant industry. In New York, there is a need to a business license, a food service establishment permit, a liquor license, sign permit for the restaurant signage, zoning permit, building health permit, employer identification number, sales tax certificate, and outdoor seating permit (if applicable).

Employment

As restaurant attorneys, we can provide advice to the restaurant owner on federal and local laws regarding employment, such as tipping, overtime, insurance, and tax withholding matters. Assistance can also be provided with the drafting of an employee handbook and the establishment of HR company policies related to employees.

Acquisition

We can also represent the restaurant owner in cases where there is an intent of a third party to acquire the restaurant. Important provisions include the purchase price and payment terms, the delineation of assets included in the sale, the type of agreement (whether a stock purchase or an asset purchase), whether intellectual property is transferred, the assumption of liabilities after the transfer, the absorption of employees post-acquisition, and the assignment of other contracts such as leases and licenses.

Liquor Licensing With the State Liquor Authority

For most restaurants, the liquor license is a significant asset and a frequent source of headaches. The New York State Liquor Authority (SLA) regulates licensing of on-premises alcoholic beverages through several license types: an On-Premises Liquor License (full bar), a Restaurant Wine License (beer and wine only with food), a Tavern Wine License, and others. The application process is lengthy — often six to twelve months — and requires demonstration of compliance with the 500-foot rule (which limits the number of full liquor licenses within 500 feet of each other), notification to the local community board, and clear lease and ownership documentation. The SLA imposes ongoing record-keeping obligations and conducts compliance inspections. A misstep can result in suspension, revocation, or denial of renewal — any of which is potentially fatal to the business. We handle SLA applications, renewals, transfers in connection with acquisitions, and enforcement defense.

Health Department Inspections

New York City's Department of Health and Mental Hygiene (DOHMH) inspects every restaurant on an unannounced basis, assigns a letter grade (A, B, or C) based on the inspection score, and posts the grade publicly. The grading system has significant economic consequences: customers actively avoid B and C grades, and businesses that fail to achieve an A often lose customer traffic. We represent restaurants in administrative tribunal proceedings to contest violations, help structure compliance programs that reduce future violations, and advise on what to expect during the inspection process.

Tip Pooling, Service Charges, and Wage Compliance

Restaurant wage-and-hour compliance is one of the most heavily litigated areas of restaurant law. New York Labor Law and Department of Labor regulations include detailed rules on:

• Tipped employee minimum wage. Tipped restaurant employees may be paid below the standard minimum wage, but only if their tips bring them up to or above the standard minimum wage. The "tip credit" is unforgiving — employers who fail to provide proper written notice of the credit lose it retroactively.
• Tip pooling. Only employees who customarily and regularly receive tips may participate in a tip pool. Managers, supervisors, and back-of-house staff are generally excluded.
• Service charges versus tips. A mandatory service charge is not a tip and belongs to the employer unless the employer distributes it to staff. Disclosure rules govern whether customers can reasonably treat the charge as a gratuity.
• Spread of hours. Employees whose workday spans more than 10 hours are entitled to an additional hour of pay at the minimum wage.
• Call-in pay. Employees called in for shifts must be paid for a minimum number of hours regardless of actual work performed.
• Uniform maintenance pay. Required uniforms must be cleaned by the employer or the employee must be reimbursed.

Class action wage cases against restaurants are common, and even good-faith violations can produce large judgments. We design compliant policies, train management, and defend wage claims when they arise.

Lease Negotiation for Restaurant Space

The restaurant lease is the foundation of the business. Key points we negotiate include:

• Use clause. Broad enough to allow the planned concept and reasonable future evolution, narrow enough to satisfy the landlord that the use is compatible with the building.
• Hours of operation. Late-night hours often require landlord consent, and the lease should expressly permit the hours the restaurant intends to operate.
• Venting, exhaust, and grease. Restaurant ventilation requires significant infrastructure. Who pays for installation, who is responsible for maintenance, and who handles complaints from neighbors all need to be addressed.
• Liquor license cooperation. The lease should require the landlord to cooperate with the liquor license application and require the landlord to deliver any documents the SLA needs.
• Build-out allowance and base rent commencement. Restaurants often need months of build-out time before opening. The lease should provide for free rent during build-out.
• Personal guaranty. The "good guy" guaranty is common in NYC restaurant leases. It makes the principal personally liable for rent only until the tenant surrenders the premises in good condition.
• Assignment and subletting. Restaurants often change hands; the lease must permit assignment on reasonable terms.
• Sidewalk café and outdoor space. Rights to the sidewalk, basement, or roof space have significant operational value and need to be addressed in the lease.

Sidewalk Café Permits and Outdoor Dining

New York City's permanent Open Restaurants program emerged from the COVID-19 emergency program. Restaurants may apply for sidewalk and roadway café permits, subject to community board input, design standards, and operational rules. The regulatory framework continues to evolve, and the requirements differ depending on the neighborhood, the street type, and the type of space. We advise restaurants on outdoor dining applications, defend against violations, and structure the relationship with the city.

Franchise and Licensing Considerations

Restaurants are a major source of franchising activity. If you are buying a franchise, the Franchise Disclosure Document (FDD) must be reviewed carefully for territorial protection, royalty obligations, advertising fund contributions, supplier requirements, renewal and transfer terms, and termination provisions. If you are franchising your own concept, you must comply with the federal franchise rule, register the FDD in registration states (including New York), and develop a franchise system that is consistent and enforceable. Licensing concepts (less than full franchising) can sometimes provide a middle path. We handle both franchisee and franchisor representation.

Intellectual Property: The Brand

A restaurant's name, logo, menu items, and concept can be among its most valuable assets. We register trademarks with the U.S. Patent and Trademark Office, defend against infringement, and resolve disputes over restaurant names that overlap or conflict with others. Copyright can protect menus, website content, and creative materials. Trade secret law protects recipes and proprietary processes when properly safeguarded.

Insurance for Restaurants

Restaurant insurance is a complex package that typically includes general liability, liquor liability, workers' compensation, commercial property, business interruption, food contamination coverage, employee dishonesty, and sometimes cyber coverage. Liquor liability has its own rules under New York's dram shop laws, which can hold a restaurant responsible for injuries caused by an intoxicated patron the restaurant continued to serve. We review insurance programs and pursue claims when carriers deny coverage they owe.

Buying or Selling an Existing Restaurant

When an existing restaurant changes hands, the deal involves not just the entity (or its assets) but the lease, the liquor license, the trade name, the equipment, the inventory, the employees, the supplier relationships, the customer goodwill, and the building department history. The SLA must approve the liquor license transfer (a process that itself can take months), the landlord must consent to the assignment, and bulk sales notices must be filed with the New York State Department of Taxation and Finance. We coordinate the moving pieces so the deal can close on schedule.

Call Our Office

An experienced restaurant attorney should have knowledge of the complex matters of the restaurant industry from formation to acquisition. Should you need assistance in establishing a restaurant, we, at the Law Offices of Albert Goodwin, are here for you. We are located in New York, NY. You can call us at 212-233-1233 or send us an email at [email protected].