How to Open a Restaurant Bar in Michigan

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Opening a Michigan restaurant with a bar poses a double challenge. You'll need a state liquor license and a local liquor license, plus a license to serve food. In addition, you'll need to meet whatever requirements your local city or county government imposes on businesses in general, including business licensing and meeting the city's zoning code. If you meet all the state and local requirements, you'll have a shot at success as a restaurateur.

  • Apply for a local liquor license in the city or county where you plan to open your restaurant. Local Michigan governments operate under a quota system that restricts licenses to one per every 1,500 residents. The Michigan Liquor Control Commission will want proof your license is accepted at the local level before issuing a state license.

  • Apply for a criminal background check by local law enforcement. If your fingerprints aren't already on file, you'll need to submit them.

  • Gather your financial records. Before issuing you a license, the Michigan Liquor Control Commission will want copies of three years of tax returns, plus records of whatever funds you plan to use to open your business, such as bank accounts or savings bonds. If you intend to use a loan, your lender must complete a Statement of Money Lender.

  • Prove that you're financially responsible enough to settle potential lawsuits or other problems. Michigan considers you responsible if you have $50,000 in liability insurance, a $50,000 bond or a $50,000 certificate of deposit available to cover losses. If you put up $50,000 in cash, the commission will hold on to it for two years.

  • Submit your application forms to the commission along with all requested documentation. You'll also need to submit a filing fee -- $70 as of 2011. If the commission rejects your application, you can appeal.

  • Submit a food service application to your local county or city health department, along with whatever filing fee it requires. The approval process will usually include a review of your building plan and proposed kitchen design to make sure everything meets state health standards.

  • Meet any other permits and requirements your local government imposes. This can include taking out a general business license and submitting your building plans -- if your establishment is a new building -- to the city's planning department.

Tips & Warnings

  • The commission's licensing procedure takes three to six months, but if local government takes longer to decide on your application, the commission has no authority to hold it to a time line.
  • If you choose to buy an existing license, this will simplify the challenge of meeting local license quotas. You'll still have to meet all state standards.
  • The commission strongly recommends that you not make any binding commitments based on acquiring a license until you've actually received it.
  • If you buy a license, the state can delay the license transfer if the old licensee had any outstanding business tax debt. If you're not careful, you could end up paying the debt yourself in order to get the license.

References

  • Photo Credit Photos.com/Photos.com/Getty Images
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