ENGLISH

Startup and operation of coffee shops

A coffee shop is a rest restaurant business under the「Food Sanitation Act」

Overview of startup and operation of coffee shops

A coffee shop is a rest restaurant business under the「Food Sanitation Act」

Concept of rest restaurant and other similar businesses

- The term “Rest restaurant business” falls under the business category of “food service business” under the Food Sanitation Act and refers to the business of cooking and selling mainly tea, ice cream, etc., or cooking and selling foods in fast food stores or snack bars (Article 36(3) of the Food Sanitation Act and subparagraph 8(a) of Article 21 of the Enforcement Decree of the Food Sanitation Act).

- A coffee shop falls under the category of rest restaurants that cook and sell tea, ice cream, etc. (Subparagraph 8(a) of Article 21 of the Enforcement Decree of the Food Sanitation Act).

Overview of startup and operation of coffee shops

Preparations required

- A coffee shop can be established either as an independent startup or as a franchise. An entrepreneur should carefully analyze the business feasibility, personal experience and funds required for independent startups and franchises in order to determine the appropriate type of startup.

- Once the type of startup has been determined, the trade area and location that are suitable for operation of a coffee shop should be sought. The Small Enterprise and Market Service operates a trade area information system (https://sg.sbiz.or.kr) that offers trade area analysis information for preliminary founders.

- Entrepreneurs with insufficient funds to start up their own business may utilize the fund support system of the Small Enterprise and Market Service.

Preparations for startups

- Questions to ask before signing a commercial lease

· A preliminary founder should ensure that no issues are present with the building that contains the space to be leased by reviewing its building register, land register, confirmation of land-use planning, register book, etc.

· Once a lease agreement is entered into, the lessee will be subject to rights and obligations as prescribed in the agreement, and thus issues which may arise regarding special provisions on available business types, premiums, the use of parking lots, etc. should be carefully reviewed.

· In the case of leasing a store space, confirm the delivery of the building, file a business registration, and receive a fixed date under the lease agreement to obtain counterforce and the right to preferential payment that protect the security deposit paid for the lease.

- Completing notification of commencement of business, etc.

· To operate a coffee shop, a notification of commencement of business must be filed with the Special Metropolitan City Mayor, Metropolitan City Mayor, Special Self-Governing City Mayor, Do Governor or Special Self-Governing Province Governor, and a business registration must then be subsequently filed at the competent tax office.

· It is recommended to select the most suitable trade name and trademark for your business and register them to protect your rights and future asset values regarding such trade name and trademark.

- A full equipment of business facilities

· During interior construction of a business establishment, a contract must be prepared specifying the scope of the construction and the period of warranty for defects.

· To operate a coffee shop, appropriate facilities pursuant to the 「Food Sanitation Act」 must be installed.

Operation

- Customer management

· After opening a coffee shop, its inventory status must be inspected as part of an effort to efficiently manage funds, and customer management needs to be thoroughly conducted to create a competitive advantage in the business.

- Precautions for operation

· A coffee shop operator and his/her employees must receive health examination and training on food sanitation for public health, and carry out requirements as prescribed in the Food Sanitation Act.

- Precautions for hiring employees

· When hiring employees, employment agreements must be signed and the minimum wage, break time, holidays, etc. of the employees must be guaranteed.

· All business establishments that use workers must subscribe to 4 major insurances (national pension, national health insurance, industrial accident compensation insurance, and employment insurance) and pay income tax and value-added tax for operating income.

Business closure

- In the event where a registered business operator closes down his/her business, he/she must report the closure to the tax office that has jurisdiction over the said business without delay, and taxes incurred during his/her business operation, such as VAT, must also be paid in full.