As a law firm with several clients that are coffee shops all over Southern California (Los Angeles County, Orange County, Long Beach), we frequently hear about and help our clients through the most common legal issues that coffee shop owners face. Here are the top 5 along with some tips to help you navigate them.

  1. Selecting the right type of entity. This is one of my favorite things to consult with clients about because it encourages and sometimes, forces clients to think about their goals and milestones. The excitement of starting a new business and envisioning it several years down the road renews enthusiasm each and every time. Figuring out what type of entity best suits your new business depends heavily on your situation, your goals for growth, your other assets and the exposure of other assets to liabilities, tax planning, whether you plan to expand out of state and many other factors. It should not be taken lightly but getting started on the right note makes your life easy and allows you to focus on the things that are most important-the growth of your business.
  2. Trademarking your business name. A lot of business owners think that buying a domain name or getting a company name protects you and stops other people and companies from using that name. This is absolutely untrue. A federally registered trademark is the best way to make sure that you do not have to go through re-branding and the name you want for your business cannot be used by anyone else.
  3. Reviewing your lease. You may not be able to negotiate much with commercial landlords-after all, they are often big corporations-however, you should know what you are getting into and what you will be responsible for. Most often, a commercial lease is your biggest ongoing expense as a coffee shop owner, so make sure you know the key terms, not just the price and duration. These include your responsibilities in case something important like plumbing or AC/HVAC breakdown, or you are unable to pay rent regularly.
  4. Employee Agreements and Handbooks. I cannot emphasize this point enough. One of the best ways to set your employees up for success is by telling them in writing what the policies, rules and expectations are, and what the consequences of breaking those rules are. A good employee handbook will be customized to your business and will not leave anything unclear, including how to treat customers, what to wear, what happens if your employees are late more than 3 times in a row etc.. This is your chance to protect yourself, and to tell your employees that you care enough to give them your tools for success in writing. As a sidenote, always make sure you are classifying your employees properly. You can use this guide by the Employment Development Department in California as a starting point.
  5. Get sufficient types of insurances depending on the liabilities and vulnerabilities of your particular business. If you hire employees-which most coffee shops do- you should at least have workers compensation insurance. In addition, business liability insurance, business interruption insurance, and other types of insurances required by your landlord will also be important.
  6. BONUS: Not hiring the right people at the right time. As a business owner, you wear many hats. You are the HR person, payroll, marketing, social media, janitor, barista, sometimes, lawyer, accountant, growth strategist etc.. Understand your limitations. You cannot know what you do not know. It is always best to ask an attorney, accountant or other professional for a consultation to see if you are missing an important piece of the puzzle that could have a huge impact on your future and growth. Yes, hiring people is an investment, but with the right people, it will pay off in spades.

 If you have questions about the legalities of your business, please contact us at 949-346-5294 or aastha@madaanlaw.com


Disclaimer: ATTORNEY ADVERTISEMENT. This blog post is for informational purposes only. It does not create an attorney-client relationship and does not provide legal advice. No part of this blog post is intended to substitute advice by a licensed attorney. Please contact an attorney if you’d like advice about your specific situation.