Kate McNally takes you through the basics of setting up a bar or restaurant business across the Channel
The first step for anyone thinking of setting up or purchasing a restaurant or bar in France is to think through it in depth and be absolutely confident it is the right choice.
Running a bar or restaurant involves long hours, hard work, myriad skills and, especially in France, heaps of paperwork. It is more than just a regular job, requiring energy and commitment to make it work and the challenge is even greater in a foreign environment. You will be dealing with suppliers, customers, local authorities and possibly staff, so from the outset you will need adequate language skills, or at least someone you can rely on who speaks good French. It will be equally important to employ the services of a native who understands the legislative system to hold your hand through the early stages.
Still interested? Then it probably is right for you. So on to the second step. As with any potential new business, you will need to do your homework before taking the plunge.
Is the venture viable? As evidenced by the growing number of pub closures in the UK, the economic downturn in Europe is taking its toll on the food and drink trade, and even in France, where café culture is integral to French life, restaurants and bars are taking a hit to the bottom line. So, wherever you choose to establish yourselves in France, you will need to get the location and what you’ll be offering spot on in order to make a profit in difficult trading conditions. If you are buying an existing business, check the figures very carefully for the past three years at least, and find out why the current owners are selling.
If you are setting up from scratch, don’t skimp on your market research. Assess the realistic potential customer spend, identify local competition and, if possible, test reaction to what you intend to serve (for example, are French people likely to want English-style roast and puddings?). Look at tourist peaks and troughs, and be sure your restaurant and bar will have sufficient customers throughout the year to survive.
Once you have decided to take the plunge, the fun begins. Here are some key considerations that will help.
Be prepared for plenty of it, and plan unforeseen delays into your timetable. There will always be an extra document required; it will inevitably take longer than expected to process; and remember not to expect a reply to anything during August – nearly all civil servants (ditto tradesmen and utility services should you need them) are on holiday for the whole month.
In addition to this, bear in mind that before you open your restaurant or bar, you must obtain certain licences and permissions.
• Alcohol licence – there are different types of alcohol licences available (see page 78) and they don’t come cheap, ranging from around €10,000 to €20,000, so factor this into your expenses. You apply for the licence at your local mairie, or in some cases at the relevant préfecture (for example if moving restaurant premises to a different area).
Most restaurants and bars are sold as a going concern and will already have an alcohol licence, but double check it is included in the sale, and that there are no impediments to the licence being transferred into your name.
Note also that anyone who sells alcohol must undergo a basic training course covering issues such as the dangers of over-consumption, and the laws against selling alcohol to minors.
Equally, an alcohol licence will not be issued to anyone who has contravened the law during the five preceding years, or who comes from a country outside the EU that does not have reciprocal trading rights with France.
The alcohol licence must be issued at least 15 days before the commencement of trading.
• If your menu includes any food derived from animals, you must declare your activity with the Direction Départementale de la Cohésion Sociale et de la Protection des Populations (DDCSPP), formerly known as the Direction des Services Vétérinaires. They will almost certainly arrange an initial check of your premises to ensure they meet catering health and hygiene requirements.
• Similarly, you need to organise a security check (commission de sécurité) via the mairie or communité de commune. This involves a small group of representatives from the fire brigade, the police and the conseil général who inspect the premises to ensure they meet safety standards.
And keep an eye out for any deadlines or expiry dates indicated in administrative paperwork. If you miss them, you could incur delays or even have to restart certain procedures from scratch.
Taking on staff in France can be an onerous step. Employer responsibilities are greater, employee rights are stronger, and employment law favours the employee to a much greater extent than in the UK.
If you have a poorly performing or disruptive staff member, it can be very difficult to dismiss the person. So to protect themselves, many businesses take on a new employee for a short-term contract initially (CDD, contrat de duration déterminé), transforming it into a permanent position CDI (contrat de duration indéterminé) once they are confident the person is right for the job. If you opt for a CDI from the outset, make sure there is a specified trial period during which time you can effectively release someone with impunity as long as you respect the notice period legally required.
The other critical factor for small and start-up businesses when deciding whether to expand the team is the relatively large financial contribution paid per employee to the state. Known as charges sociales, these mandatory payments effectively go towards paying such things as an employee’s pension, medical insurance and sick leave; they can add up to roughly a further 40% of salary.
If you do need to take on staff, it is worth investing in the services of a good accountant or outsourcing HR administration to a specialist, at least to begin with, to ensure you follow correct procedures. If you take on seasonal staff, keep a register indicating the address, date of birth, job title and starting date of each employee as well as a copy of their contract (the latter must be signed by both parties before an employee starts work). The hefty charges sociales can tempt employers in France to bend the rules, especially if it’s only for a few weeks in the year, but the local gendarmes regularly inspect staff registers to seek out illegal workers and you’ll save yourself hassle if your register is fully up to date.
Finally, employers must pay for a basic medical examination for all new employees to prove that they are fit-for-purpose or apt, as the French say. The gendarmes may ask to see these certificates as well.
As in the UK, businesses can be subjected to unannounced spot checks from various officials, such as health and safety, tax, or anti-fraud inspectors. Sometimes, they want to check all aspects of your operations going back years. There are also strict guidelines in France about how and where you file different paperwork. To be on the safe side, it is best to keep all papers relating to your restaurant or bar on file, from supplier delivery notes through to customer receipts, plus a record of all transactions.
If your French is up to it, you should consider taking a business start-up course at the local chamber of commerce and industry. This will provide you with a good overview of French laws and regulations, as well as business procedures in France – and usually they will have specialist advisers in the hotel-restaurant trade available to help.
In line with EU regulations, you must display your alcohol licence in your bar area, and any other relevant trading licences where customers can see them. All food and drink prices should be displayed or be available in menu form if customers ask to see them.
If you do not accept cheques or bank cards for payments under a specified minimum amount, you should display a notice to this effect that can be easily seen by customers.
Indicate your opening hours too – these should be approved by the mairie or préfecture in advance. LF
Which alcohol licence?
• Licence II (or petite licence) – fermented alcoholic drinks, e.g. beer, wine, cider and fruit-based drinks containing up to 3% alcohol by volume.
• Licence III (or licence restreinte) – this is the same as Licence II plus wine-based liqueurs and fruit-based liqueurs up to 18% alcohol by volume.
• Licence IV (or grande licence) – this is the same as Licence III plus rum and distilled alcoholic drinks.
• Within the categories, there exist separate bar and restaurant licences. However, if a restaurant wants to serve drinks outside mealtimes or to non-eating customers, then the owners must obtain a restaurant-bar licence IV. Note, the former licence I to sell non-alcoholic drinks was scrapped in 2011.