Owning a bar, café, hotel, restaurant or similar establishment in France, particularly in popular holiday resorts, can produce a sizeable income.
A number of French organisations specialise in this market and will help you find suitable licensed premises.
The licensing of premises where alcohol and soft drinks are consumed is strictly regulated by the Code des débits de boissons.
You cannot obtain a licence before completing a déclaration préalable which must be filed with the Mairie (the Préfecture de Police in Paris) at least 15 days before the opening date.
A further declaration must also be made to the recette locale des douanes et droits indirects who are primarily responsible for French VAT and other indirect taxes. Applications are usually processed within a fortnight.
Proprietors of restaurants, hotels and chambres d’hôte who serve drinks (even free of charge) with main meals and as accompaniments to food must hold a licence restaurant.
A petite licence/Cat.3 is required where only soft drinks, beers, wines and other alcohol with a content of less than 18% are provided with meals. If spirits and other drinks with an alcohol content of over 18% are also served, -or when alcoholic drinks are served outside of meals- you must hold a grande licence restaurant/ Cat.4
Hotel and restaurant licences can be obtained relatively easily with no limit on numbers. It is harder to obtain a licence to serve alcohol and soft drinks if food is not served on the premises.
The authorities cannot issue new licences in excess of the permitted number per département at any one time. Nor can you transfer an existing licence from premises in (say) Paris to Perpignan.
A Licence I (boissons sans alcool) permits the sale of soft drinks only.
A Licence II (boissons fermentées) holders can also sell wines, beers and other drinks with an alcohol content of less than 3.
A Licence III (restreinte) authorises the sale of the above and drinks with an alcohol content of no more than 18.
Finally, a Licence IV (de pleine exercice) holder can sell all these drinks as well as spirits. In popular resorts, a Licence IV will be very expensive to buy.
A proprietor who does not hold a valid licence or who is otherwise in breach of the Code can face heavy fines and other civil or criminal penalties. In serious cases, premises can be closed for up to twelve months by order of the administration.
It is essential to have at least a reasonable knowledge of spoken French, because you will be flooded with official documents and you must be able to understand them.
However much you may wish to simplify your lifestyle, you will only give yourself trouble, worry and expense if you do not set your new business venture off on the right foot, and keep on top of the administration.
Proper independent legal advice should therefore always be taken before making a commitment.
Above all, do not buy a ‘white elephant’. Make sure that a valid licence will be available on or before completion of your purchase, especially if you intend to convert unlicensed premises.
The main points to remember are:
- Avoid significant expense until you have a good understanding of the regulatory environment.
- Make sure that the premises and the area are suitable.
- Do not believe wildly optimistic figures of potential income
- Always check with the planning authorities whether there are any restrictions on converting premises into a restaurant, café etc.
- Do not agree to buy unlicensed premises without the guarantee of a licence being available.
* As a proprietor of commercial premises (commerçant), you will need to register with the local Chambre de Commerce and other authorities.
– Comply with the various regulations and formalities, breaches of which can give rise to penalties.
– Don’t sign anything without checking with an independent legal adviser.