How to start a restaurant or catering business in Ontario
Table of contents
There are many different kinds of restaurants and catering services. Whether you’re interested in starting a café, a bar, family style restaurant or event catering business, you will be part of the food services industry.
Popular types of restaurants and catering businesses include:
- Gourmet and casual dining
- Fast-food and food trucks
- Pubs, bistros and brasseries
- Coffee shops and cafeterias
This guide focuses on operating an independent restaurant or catering business. For information on buying a franchise, visit the Canadian Franchise Association website or call them at 1-800-665-4232.
When you start a business there are several things to consider before you can sell your product or service. Most businesses in Ontario need to complete a minimum of three basic steps:
- Find out what licences and regulations apply to your type of business
- Choose a business structure and register or incorporate your business
- Determine if you will need to collect and remit HST
Our business start-up guide will give you more information on these steps and other basic requirements for starting a business in Ontario.
Starting a Business
Your business may need licences and permits from the federal, provincial and municipal levels of government.
In addition to the information you will find in this guide, you can use the Canada Business Permits and Licences Search, powered by BizPaL, to find licences and regulations that may affect your business. You can also contact us to speak to someone about starting your business.
Permits and licences search
Restaurants and catering services are highly regulated in Ontario. Some common regulations that may apply to your business include:
Food safety and labelling
Your local health unit is the main contact for information on food safety. Local health authorities are responsible for carrying out food service inspections.
You should contact your local health authority and arrange an inspection of the premises, equipment and processes to make sure your business is complying with provincial and federal legislation.
The following link provides contact information for local health authorities that perform inspections on restaurants and food businesses in Ontario.
Local public health contacts
In addition to contacting your local health unit, if you are involved in the production, service or processing of food products, you will need to comply with safety standards and labelling regulations from the Canadian Food Inspection Agency (CFIA) and the Ontario Ministry of Agriculture and Food and Rural Affairs (OMAFRA).
Regulated products and sectors
Regulations for the food industry
Many municipalities have licences specific to food handling or food preparation. If your municipality is not listed in BizPaL, or you are not sure what municipality your business falls under, you can contact the Association of Municipalities of Ontario (AMO) for information on what municipal regulations, licences or permits will be needed to operate your business.
Association of Municipalities of Ontario
Tips and gratuities
As an employer in Ontario there are rules set out in the Employment Standards Act, 2000 (ESA) you need to follow in handling tips and other gratuities in your workplace. Generally, you cannot withhold, make deductions from, or make your employees hand over their tips or other gratuities. Find more information about your responsibilities and best practices for handling tips on the Ontario Ministry of Labour’s website or contact the ministry directly.
Contact Ministry of Labour
Tips and Other Gratuities
The Ontario government prohibits smoking in all enclosed workplaces and enclosed public places. Find out what your responsibilities are, what is required for inspections and how to get “No Smoking” signs.
Selling and Serving Alcohol
If you plan on selling or serving alcoholic beverages, you will need one or all of the following:
You will need a liquor licence for your business if you sell or serve alcoholic beverages in an area where light meals are available.
Contact the Alcohol and Gaming Commission of Ontario (AGCO)
Applying for a Licence
Bring Your Own Wine (BYOW)
The BYOW endorsement allows customers of your licensed establishment to bring unopened wine from home. If you are interested in getting a BYOW endorsement for your business, contact the AGCO.
Your business can get a catering endorsement from the AGCO if you wish to sell and serve liquor at catered events in an unlicensed area.
Special Occasion Permit
You will need a permit to serve alcohol at special events such as weddings or charity fundraisers. Special Occasions Permits cannot be issued for a private residence.
Contact the Alcohol and Gaming Commission of Ontario (AGCO):
Special Occasion Permit
Maintaining High Health Standards
Your restaurant or catering business will be inspected and appraised, so you should strive to maintain high health standards. When you are dealing with health issues, there are several standards that you may need to be aware of including:
- Food temperature control
- Protection of food from contamination
- Employee hygiene and hand washing
- Maintenance and sanitation of surfaces and equipment that come into contact with food
- Maintenance and sanitation of surfaces and equipment that do not come into contact with food
- Maintenance and sanitation of washrooms
- Storage and removal of waste
- Pest control.
For further information, call your local Public Health Unit.
When your business uses recorded music, you are responsible for obtaining the right licence(s) for that use. The Copyright Board of Canada works with individual copyright collective societies who provide music licensing. Contact the following two organizations for more information.
Society of Composers, Authors and Music Publishers of Canada (SOCAN) Music Licence
SOCAN is a not-for-profit organization that represents the performance rights of music creators and music publishers. They can help you learn about your obligations and obtaining the required licence(s).
Tariffs & forms - Music in a business
Re:Sound Music Licensing Company
Re:Sound is the Canadian not-for-profit organization that represents the performance rights of artists and record companies, and provides the legally required licence(s) for businesses. You can get help determining what licence(s) will be required, what the licensing process will be and how much it will cost.
You can contact Pro Bono Ontario’s free legal advice hotline to enquire about getting help with your everyday civil legal needs (no family law or criminal law). The service is generally aimed at those who cannot afford a lawyer.
Note that service is not guaranteed and you will be asked questions as part of the qualifying process, such as the amount of personal income earned by your household, your name, postal code and age range.
Contact Pro Bono Ontario’s Free Legal Advice Hotline:
You can also contact the Law Society of Upper Canada's Law Society Referral Service if you have legal questions of a business nature. The service may be able to assist you in finding a lawyer or paralegal, based on your needs.
Law Society Referral Service
Depending on your location and the type of products or services being offered, federal, provincial and/or municipal business taxes may apply.
If you sell goods and services in Ontario, you may need a business number to collect and remit the Harmonized Sales Tax (HST). Most businesses that make less than $30,000 in any 12-month period are not required to charge HST; however, you can register voluntarily and claim input tax credits. Speak with the Canada Revenue Agency (CRA) for more information.
Canada Revenue Agency
Additional tax requirements that may apply to restaurants and caterers in Ontario include:
Prepared food and beverages
The following will help you understand how to charge the Harmonized Sales Tax (HST) on prepared food and beverages.
Harmonized Sales Tax for Ontario - Point-of-Sale Rebate on Prepared Food and Beverages
Coupons and gift certificates
If you offer coupons and gift certificates, find out how to apply the HST when you sell them, and when you redeem them.
Alcoholic beverages – Beer and Wine Tax
In addition to charging HST, you need to know how much tax was collected on beer and wine products you sell to customers. Ontario manufacturers charge a special beer and wine tax to suppliers, which is included in the price you pay for your inventory. If requested, you need to be able to tell your customers how much beer and wine tax was paid.
Contact the Ministry of Finance:
Beer and Wine Tax
Canada Business can help you find government financing options for your business. There are programs that apply to businesses across Canada and others that apply only to businesses in Ontario. Use the Canada Business financing search tool or browse by type of financing.
Canada Business: Government grants and financing
From day-to-day operations to long-term planning, learn how to manage your business efficiently.
If you are interested in finding an association, use our secondary market research service request and have us search for one based on your needs.
Industry specific information
You can also find books, magazines and other relevant print material at business service organizations in your community. To locate a Canada Business Ontario (CBO) community partner, contact us at 1-888-576-4444.