How To Open A Cafe (2025 Updated)

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Starting a cafe business is an exciting venture – your venue could quickly become a community favourite for that perfect morning latte, a popular meeting spot for friends, or a much-needed lunch break for busy professionals. In 2025, with evolving consumer tastes and innovative service models, a well-run cafe remains a valued addition to the local business scene.

Before you begin serving those steaming cups of coffee, starting a cafe requires thorough research. After all, this is a business, and you need to be well-prepared for the journey ahead. We’ve outlined some of the most important legal aspects to help you get started. For more insight into the strategic planning for 2025, our Business Set-Up: Ideas and Plans guide is a great resource.

Business Structure

One of the first decisions is determining which business structure best suits your cafe. If you’re running the operation on your own, you may wish to operate as a sole trader. If you are partnering with others, then a partnership structure might work well. Alternatively, registering your cafe as a company can offer advantages in terms of liability and growth opportunities. Each structure has its pros and cons – if you’re uncertain which option is best for your financial situation and long-term goals, consider reading our guide on Business Structure Matters for further clarity.

Lease

Finding the perfect location for your cafe is a crucial next step. Most often, you will require a retail lease tailored to hospitality operations. There are several factors to consider when scouting for the right property:

Competition: Evaluate if there are any nearby cafes. Consider whether you have the resources to maintain a competitive edge in the area.
Accessibility: Look at factors such as parking facilities, pedestrian access, wheelchair accessibility, and proximity to busy zones as these can significantly influence foot traffic.
Property Condition: Assess whether the space needs upgrades or modifications to accommodate essential cafe fixtures and equipment.

After you have identified the ideal space, you will need to negotiate a comprehensive Lease Agreement. This contract should clearly state your lease terms, rent, duration, and any additional stipulations (for example, whether you’re allowed to play background music at a certain volume). It’s wise to refer to our Retail Lease drafting guide to understand what to expect.

It’s always advisable to consult a legal professional to ensure your agreement covers all necessary details and protects your interests.

What Kind Of Documentation Will I Need?

Opening a cafe involves assembling a considerable amount of paperwork. The following are some of the key types of documents you will need:

Business Agreements

If you’re entering into a partnership, having a detailed Partnership Agreement is essential. This document should outline the roles, responsibilities, and liabilities of each partner. Similarly, if you choose to operate as a company, you will need to prepare the necessary documentation, including a company constitution – a process further explained in our Company Set-Up service page.

Engaging an experienced legal professional to draft these documents ensures that your agreements are comprehensive and tailored to your specific business needs.

Licences

To operate your hospitality business legally, you will need to secure the appropriate licences. Depending on your location, a food and beverage licence is often required. Licence applications can typically be completed online, though the process can be complex. If you need assistance, our team advises seeking professional help to ensure no key steps are missed.

Council Approvals

Local councils often require additional documentation, including work health and safety certificates, fire safety compliance, zoning permits, and building certificates. Requirements vary between councils, so it is critical to review the regulations specific to your area. If you’re in Sydney, for example, you can begin by checking the City of Sydney’s updated approval processes.

What Are My Employer Obligations?

As a cafe owner, hiring staff comes with significant legal responsibilities. Some of your key employer obligations include:

Employment Contract – Your employment contracts should clearly detail roles, responsibilities, wages, and conditions for both parties. For a deeper dive, our Employment Contract Essentials guide is highly recommended.
National Employment Standards – Fair Work Australia outlines basic standards such as flexible working arrangements and leave entitlements.
Workplace Health and Safety – Ensuring your staff have a safe working environment is not only ethical but legally required.
Training – Investing in comprehensive training is crucial as your employees are ambassadors for your brand.

Understanding and complying with these obligations is critical to avoid potential legal issues. Be sure to review our Workplace Policy & Staff Handbook guidelines for further requirements.

Food Regulations

The Australia and New Zealand Food Standards Code is a legally binding framework that sets high standards for food prepared commercially. This code covers everything from permissible substances and processing methods to proper storage and handling practices. It’s essential to stay updated as the guidelines continue to evolve in 2025.

Other applicable regulations vary depending on your state and local council. For instance, in NSW, the Food Act 2003 (NSW) and the Food Regulation 2015 (NSW) govern these requirements. Always consult the relevant legislation for your area or seek expert legal advice.

What About My Suppliers?

Reliable suppliers are vital to the success of your cafe. Quality, consistency, and a strong working relationship with your suppliers can make all the difference in maintaining high standards for your food and beverages. Establishing a robust Supply Agreement can help ensure smooth operations. This agreement should typically cover:

A detailed description of the products and produce supplied
Delivery specifics including methods, schedules, and locations
Warranties and remedies if products do not meet agreed standards
Clear allocation of liability for each party
Dispute resolution mechanisms to address any disagreements effectively

What If I Want To Work With A Food Delivery Company?

With the rise of online ordering and contactless delivery, partnering with a food delivery service can expand your customer base. Whether you opt for major platforms like Uber Eats or local delivery services, it’s important to consider:

Which service best aligns with your target market by considering the areas they serve, their popularity in your region, and the types of restaurants they partner with. It also helps to read reviews of various platforms, such as those found on our Couriers page.

Fees and commissions are another key consideration. Each delivery partner has its own fee structure, including joining fees, commissions, or both. Evaluate these costs and determine which service offers the best financial terms for your business.

Also, familiarise yourself with the rules and regulations imposed by each service; if you plan to use multiple platforms, understanding their nuances is vital. Finally, high-quality product images are essential as many platforms have strict guidelines—consider investing in professional photography to showcase your menu in the best light.

How Much Does It Cost To Open A Cafe?

The cost of opening a cafe varies widely depending on numerous factors such as whether you are purchasing a franchise, starting from scratch, renting or purchasing a location, and the extent of any required renovations. In 2025, many industry insiders suggest that launching a cafe can cost between $250,000 and $600,000 – though this figure will depend on your specific concept, location, and scale of operations.

What Else Do I Need To Know?

Opening a cafe, like any small business, demands significant investment, time, and strategic planning. A comprehensive business plan outlining your goals, target market, financial projections, brand identity, and operational strategy is indispensable. Our resources on legal and operational planning can assist in shaping your vision.

Additionally, 2025 presents new opportunities and challenges. With the increasing importance of sustainability, digital ordering solutions, and heightened consumer expectations for transparency, it is more critical than ever to align your cafe’s operations with these trends. Consider consulting our dedicated startup legal support services for personalised advice on navigating the modern business landscape securely and efficiently.

Next Steps

Opening a cafe business involves many moving parts and legal considerations. If you’d like a consultation on your options going forward, get in touch with us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat. Our experienced team is here to help you establish a solid legal foundation for your new venture in 2025 and beyond.

Sapna Goundan

Sapna has completed a Bachelor of Arts/Laws. Since graduating, she's worked primarily in the field of legal research and writing, and she now writes for Sprintlaw.

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