Government of Canada
Symbol of the Government of Canada
Skip to content|Skip to institutional links

Common menu bar links

Homepage > Start-Up > Restaurant

 

Institutional links


Restaurant

Last Verified: 2008-01-15

The following is intended to provide an understanding of potential licence, permit or registration requirements when considering the establishment of a Restaurant in New Brunswick. This document is a guide prepared by Canada Business - New Brunswick and affiliated departments and agencies to provide you with a list of possible steps and issues to consider in carrying out your project. The extent to which the information will apply to you is dependent on the circumstances related to your project.

Before proceeding, reference should be made to the Business Start-up in New Brunswick guide for information on the steps involved in establishing a new business in New Brunswick. You may also want to consult our complete List of New Brunswick Guides.

Note : You will notice that throughout this publication, there are some references made to other relevant documents ("see the document...") If you are using the Web, simply click on the links provided. If you are reading this publication from a print copy and would like to obtain those additional documents, please call Canada Business - New Brunswick at 1-888-576-4444 and we will provide you with copies.

For further information on individual topics identified herein, contact the respective governing body or Canada Business - New Brunswick. Because this document is only meant as a guide, Canada Business - New Brunswick will not accept responsibility for business decisions made based on the information provided.

TABLE OF CONTENTS

1. General
1.1  Types of Operation 
1.2  Layout and Design 
1.3  Calculating Seating Capacity 
1.4  Preparing Menus and Setting the Right Price 
1.5  Furnishings and Equipment 
1.6  Cost Control

2. Regulations  
2.1  Food Service Establishment Licence        
2.2  Liquor Licence        
2.3  Tobacco Retailer's Licence
2.4  Music Licence
2.5  Fire Marshal's Office
2.6  Protection of Personal Information: Your Responsibilities

3. Other Sources of Information  
3.1  Associations 
3.2  Statistics 
3.3  Related Web Sites

4. Canada Business - New Brunswick


1.  General

1.1  Types of Operation
Depending on your experience, finances, location and customers, decide on the type of restaurant:

Traditional

  • cater to a variety of customers;
  • must excel in service, food preparation and inventory control due to lengthy menus;
  • popular in tourist areas, but declining in general.

Ethnic

  • highlight food from a particular country or region;
  • must offer personal service with excellent cuisine.

Specialty

  • offer one food type or a variety of a certain dish;
  • best in urban areas;
  • owners should have lots of restaurant experience.

Coffee Shop

  • offer a wide variety of quick, pre-prepared dishes;
  • heavy traffic flow is needed for high customer turnover.

Fast Food

  • normally franchise operations offering limited menu.
  • attractive to beginning operators

Cafeteria

  • offer simple, pre-cooked hot dishes and cold plates;
  • large transient population is needed;
  • controlling labour costs can be difficult.

Self-Serve

  • small operations offering take-out or eat-in;
  • location, efficiency and good food are critical;
  • easiest type of restaurant for the beginner due to low initial capital outlays and minimal payroll requirements.

1.2  Layout and Design
Aim for a practical, useful layout, while setting the mood. Make sure you have:

  • seating/waiting areas, serving room, cashier area, rest rooms, bar (optional);
  • one or more areas from which you can view the entire restaurant;
  • lighting, signs and obstacle-free traffic flow;
  • a variety of seating arrangements: 50% of customers come in pairs; 30% come alone or in groups of three; and 20% in groups of four or more;
  • adequate room - the suggested square footage requirements per chair are: 10-20 sq. ft in traditional restaurants, 10-12 in cafeterias, 7-17 in coffee shops;
  • a kitchen that allows efficient and effective food preparation and interaction between staff, safety in movement, dry and cold storage, dish washing, an area for staff's personal items, convenient delivery zone, ease of cleaning and maintenance, and proper ventilation and lighting.

1.3  Calculating Seating Capacity
To determine the maximum potential of your restaurant and break-even point:

  1. determine desired profit - convert to percentage of sales to get sales required;
  2. determine number of operating days - divide number of days into sales to get average daily sales;
  3. estimate volume percentages for meal periods (breakfast, lunch, dinner); 
  4. multiply figures in step 3 by average sales per day to get dollar volume per period; 
  5. determine average check per meal period; 
  6. divide dollar volumes in step 4 by average check for the number of patrons per period; 
  7. estimate a) average seat occupation per meal period; and b) time per meal period; 
  8. divide time per period by average occupation to get seat turnover per period; 
  9. divide possible seat turnover into number of patrons to get number of seats required per period; 
  10. take the largest seating requirement in step 9 and add a 20% safety margin for the seating capacity.

1.4  Preparing Menus and Setting the Right Price
Plan your menu carefully. Know what items your customers prefer and how they like them prepared. Provide variety while maintaining stable cost averages. Menu prices are a combination of food costs and what is needed to meet expenses and realize a profit. Generally, the price of an item is approximately three times the food costs, depending on restaurant type, operating expenses and competitors' prices. To establish pricing:

  • estimate your sales - counter-balance higher cost items tagged with lower markup, with higher markups on lower cost items;
  • maintain a desired overall food cost percentage, usually 33-40% of gross sales, and a normal margin of profit;
  • balance items ranging in popularity - monitor high demand items which can determine your success.

For additional information, see the document Setting the Right Price.

1.5  Furnishings and Equipment
Before you open your restaurant, you will need tables, chairs, lighting and decorative items. You will also need kitchen, bar and dinner wares. The menu, size of restaurant and kind of service will determine the type of equipment you will require. For assistance in this area, you may get the advice of a sales representative or consult trade publications and manufacturers' Web sites. List that equipment and its cost to you. An important factor to consider when choosing equipment is the after-sales service and repair and their affordability.

Used Equipment - Consider buying used equipment as a cost-saving measure. Sources of used equipment could be a restaurant that is closing or dealers in second-hand equipment. The drawback to this approach is that, often, there are no guarantees with the purchase.

Leasing Equipment - Another alternative is to lease equipment to help keep start-up costs down.

1.6  Cost Control
In the restaurant business, you must have procedures for controlling inventory and costs. Ask people in the industry for information about procedures for:

Purchasing - Most of the time, purchasing is done over the telephone, by fax, or online. Often no contract is signed between the purchaser and the supplier; therefore, it is essential that you choose your supplier carefully. Develop specifications on food brand names, size, quantity, grade/weight, delivery time/place, emergency deliveries, availability and policies for substitutes or damaged goods. Entertain bids from multiple sources and get the best product for the lowest price. Use a Purchasing and Receiving Form.

Receiving - Check all deliveries against the Purchasing and Receiving Form, focusing on three things: quantity, price and quality (i.e., temperature: frozen goods must be frozen); packaging should be intact. Make sure specifications are met. Careful recording will show short shipments, price variations and weight differences.

Budgeting and Projecting - Establish a cash budget and maintain cash flow projections on a continual basis.

Calculating Monthly Food Costs - Determine the actual cost of food consumed and the actual cost of food sold. This is a combination of opening inventories, purchases, adjustments and closing inventories. This ratio should remain relatively constant.

Calculating Beverage Costs - Record all bottle deliveries and purchases.

Preparing Food - Make sure staff understand portion sizes (photograph entrees or give written instructions) and set up a recipe reference file to list dishes, portions and supplies needed.

Storing - Ensure refrigerated and frozen products are quickly placed in a cold storage- storage temperature for dry goods (between 10-21 C) and frozen goods (-18 C or less).  Rotate your stock to ensure that oldest items are used first before the new stock.

2.  Regulations

2.1  Food Service Establishment Licence
If you will be preparing and serving foods, even for such foods as subs, hot dogs, ice cream, etc., you will need to present a floor plan of the kitchen area, i.e. sink, etc. to the provincial Department of Health. The fee for a Food Service Establishment Licence is $85.00 / year from 0 to 25 seats and $125.00 / year from 26 seats or more. Look under Public Health Services in the Provincial section of the blue pages of your telephone directory for your nearest office.

2.2  Liquor Licence
A Liquor Licence can be obtained from the provincial Department of Public Safety, at 506-453-7472. The fee is $100.00 per application plus additional fees according to licence type.  

2.3  Tobacco Retailer's Licence
If you will be selling tobacco products you need a Tobacco Retailer's Licence. Contact the provincial Department of Finance, Revenue and Taxation Division, at 506-453-2404. The fee is $15.00 per location.

2.4  Music Licence
Performances of music in public, i.e. restaurants, clubs, hotels, dance halls, offices, stores, etc., require a licence. This licence is necessary whether the music is performed by live or recorded means.  

For more information, contact the SOCAN office in Dartmouth, Nova Scotia at 1-800-707-6226 or visit the Web site at the following address: http://www.socan.ca/jsp/en/index.jsp

2.5  Fire Marshal's Office
Plans must be submitted to Office of the Fire Marshal for review if the establishment can accommodate 50 people or more.

For more detailed information call the Fire Marshal's Office at 506-453-2004 or you may also visit the Web site at the following address: http://www.gnb.ca/0276/fire/index-e.asp

2.6  Protection of Personal Information: Your Responsibilities
The Guide to Canada's Personal Information Protection and Electronic Documents Act  (PIPEDA) helps businesses understand their obligations and comply to the Act. Since January 1, 2004, the PIPED Act covers the collection, use or disclosure of personal information in the course of all commercial activities in Canada, except in provinces which have enacted legislation that is deemed to be substantially similar to the federal law.

For more information, see the document Protection of Personal Information - Your Responsibilities, call toll-free 1-800-282-1376 or visit the Web site: www.privcom.gc.ca/information/guide_e.asp

3.  Other Sources of Information

3.1  Associations
Examples of associations include, but are not limited to:

3.2  Statistics

3.3  Related Web Sites


4.  Canada Business - New Brunswick

Canada Business - New Brunswick is an innovative partnership of federal and provincial government departments. Both levels of government work with key private-sector organizations to create a seamless information network for entrepreneurs.

Our mission is to improve the start-up, survival and growth rates of small and medium sized enterprises by giving business people in every part of New Brunswick access to accurate, timely and relevant information and referrals.

What can we do for you? We can guide you in the right direction! We can give you the information you need! We are your best source of comprehensive business information!

Canada Business - New Brunswick is accessible province-wide and free of charge. You may reach us through our toll-free number or visit us with your questions. Our office is open from 8:30 a.m. to 5:00 p.m., Monday to Friday. We also provide a 24-hour business information service, seven days a week, through our Web site.

Here's how to reach us:

Canada Business - New Brunswick
Ground Floor, Barker House
570 Queen Street
Fredericton, New Brunswick  E3B 6Z6
Telephone: 506-444-6140
Fax: 506-444-6172
Toll-free (information): 1-888-576-4444
TTY Toll-free (hearing impaired): 1-800-457-8466
E-mail: infonb@canadabusiness.ca
Web site: http://www.canadabusiness.ca/nb
Hours of operation: 8:30 am to 5:00 pm Monday thru Friday - except Government holidays

 

DISCLAIMER
Information contained in this document is of a general nature only and is not intended to constitute advice for any specific fact situation. Users concerned about the reliability of the information should consult directly with the source, or seek legal counsel.

Links Policy
Some of the hypertext links lead to non-federal government sites which are not subject to the Official Languages Act and the material is available in one language only.



Last Modified: 2008-01-15

Top of page
Important Notices