Legal Process of Opening and Running a Restaurant in the United States and How it Compares From Opening a Restaurant in the United Arab Emirates. ENVIRONMENTAL FRAMEWORK

Overview of the Hospitality Industry of Los Angeles

Sector Size and Growth

Annual Revenue and Employment

Competition

Opportunity

Overview of Dubai Restaurant Industry

LEGAL AND REGULATOY PROCESS OF OPENING A RESTAURANT IN THE UNITED STATES OF AMERICA

Documentation and Legal Filing

Reserve Company Name

Apply For Federal Identification Number (EIN)

Register To Collect State Sales Tax

Register as an Employer with the Unemployment Insurance Division at the State Labor Department

Arrange For Workers' Compensation and Disability Insurance

Arrange For Publication and Submit Certificate and Affidavits of Publication

Zoning Laws

Negotiating Commercial Lease

Restaurant Corporate Structure

License and Permits

Business License

Food Service Establishment Permit

3.5.3. Alcohol Beverage License 18

3.5.4. Food Safety Permit 18

3.6. Food Safety Regulation 19

3.7. Insurance 19

3.8. Domestic Laws that Apply to Business 20

3.8.1. Consumer Credit Protection Act 20

3.8.2. Employee Polygraph Protection Act 20

3.8.3. Fair Labor Standards Act (FLSA) 20

3.8.4. Fair Labor Standards Act (FLSA) / Child Labor 20

3.8.5. Immigration and Nationality Act 21

3.8.6. Occupational Safety and Health (OSH) Act 21

3.8.7. Uniformed Services Employment and Reemployment Rights Act 21

3.8.8. Whistleblower Protections Provisions 21

4.1. Employment and Labor Laws 22

4.1.1. Immigration Laws 22

4.1.2. Federal Youth Employment Provisions 22

4.2. Food Safety Laws 22

4.3. No Smoking Laws 23

4.4. Wage Laws 23

4.4.1. Minimum Wage 23

4.4.2. Food Credit 23

4.4.3. Tips 24

4.4.4. Overtime 24

4.5. Taxes 24

4.6. Hiring Employees 24

4.7. Supplier Contracts 25

5. POTENTIAL EXIT STRATEGIES 25

5.1. Franchising 25

5.2. Other Strategies 25

6. LEGAL AND REGULATORY PROCESS OF OPENING A RESTAURANT IN UAE 26

6.1. Documents and Legal Filing 26

6.2. Zoning Laws 30

6.3. Negotiating Commercial Lease 30

6.4. Restaurant Corporate Structure 30

6.5. License and Permits 31

6.6. Food Safety Regulations 32

6.7. Insurance 32

6.8. Local Laws Applying to the Business 33

7. OPERATING A RESTAURANT WITHIN THE LAW WITHIN THE UAE 33

7.1. Adhering to Islamic and Middle Eastern Laws 33

7.2. Employment and Labor Laws 34

7.3. Food Safety Laws 35

7.4. No Smoking Laws 35

7.5. Wage Laws 35

7.6. Taxes 36

7.7. Initiating Employee Contracts 37

7.8. Supplier Contracts 37

8. POTENTIAL EXIT STRATEGIES 38

8.1. Franchising Laws 38

8.2. Other Strategies 38

References 39

Abstract

The business world, in the present era, is dominated by mass globalization. The organizations and businesses can prosper on the basis of economic interdependence. It is, therefore, necessary for the entrepreneurs to have an insight into the laws, regulations and principles that govern the initiation and operations of the businesses in various locations, so that they might flourish in the global markets.

This paper, therefore, aims at highlighting the legal process of opening and running a restaurant in the United States and how it compares from opening a restaurant in the United Arab Emirates. The paper will highlight the differences that exist between these processes by discussing each of these processes in detail.

The Legal Process Of Opening And Running A Restaurant In The United States And How It Compares From Opening A Restaurant In The United Arab Emirates.

1. INTRODUCTION

The business world, in the present era, is dominated by mass globalization. The organizations and businesses can prosper on the basis of economic interdependence. It is, therefore, necessary for the entrepreneurs to have an insight into the laws, regulations and principles that govern the initiation and operations of the businesses in various locations, so that they might flourish in the global markets.

This paper, therefore, aims at highlighting the legal process of opening and running a restaurant in the United States and how it compares from opening a restaurant in the United Arab Emirates. The paper will highlight the differences that exist between these processes by discussing each of these processes in detail.

2. ENVIRONMENTAL FRAMEWORK

2.1. Overview of the Hospitality Industry of Los Angeles

The accommodation and food service sector of Los Angeles consists of all the enterprises that provide the consumers with lodging services and prepare meals, snacks and beverages for immediate consumption purposes. This sector consists of both accommodation and food services firms. This is because both of these activities are generally combined at a single establishment...

Sector Size and Growth
The hospitality industry of the Los Angeles is one of the fastest growing industries of Los Angeles. The current is estimated to be $22,000,000. The growth of the sector reached its peak in the year 2007. The growth, however, slumped after 2007. This downturn in growth can be attributable to the financial crunch. In the year 2009, the sector started growing once again. Furthermore, in the year 2013, the growth rate of the accommodation and food service sector of Los Angeles was equal to the growth rate of the gross domestic product of the United States of America. (Staff Members of the Los Angeles Research Group, LLC, 2014; Shiftgig, Inc., 2013)

(Staff Members of the Los Angeles Research Group, LLC, 2014)

The graph above shows the relationship of the growth rate of the accommodation and food service sector of Los Angeles with the growth rate of the gross domestic product of the United States of America. (Staff Members of the Los Angeles Research Group, LLC, 2014)

2.1.2. Annual Revenue and Employment

The accommodation and food service sector of Los Angeles recorded an annual revenue of 340.7 billion dollars in the year 2013. The accommodation and food service sector of Los Angeles had an EBITDA of 92.7 million dollars. The industry employed a total of 1226 million people and provided wages of around 43.8 million dollars. (Staff Members of the Los Angeles Research Group, LLC, 2014)

There has been a constant increase in the employment rate of the sector. The industry is regarded as the third largest industry, in terms of employment gains. (Staff Members of the Los Angeles County Economic Development Corporation, 2013) The industry is expected to an annual average employment rate of 423.4. There has been a constant increase in the employment rate of the accommodation and food service sector of Los Angeles. (Kleinhenz, Ritter-Martinez & Guerra, 2013) The variations in this employment rate is depicted by the graph below:

(Kleinhenz, Ritter-Martinez & Guerra, 2013)

2.1.3. Competition

There has been an evident increase in the competition that exists in the accommodation and food service sector of Los Angeles. The hoteliers are concerned about the enhanced managerial, leadership and strategical skills that are required to sustain and grow the business in this sector. The basic reason behind this increase in competition is the enhancement of the choices that are available to the consumers. (Staff Members of the Los Angeles Research Group, LLC, 2014)

In addition to that, there has been an evident increase in the demands and expectations of the consumers. This pressurizes the businesses to perform in the best possible so as to attain and maintain a loyal and appropriate customer base in the highly competitive market. Apart from that, effective competition also exists in relation to recruitment and retention of effective workforce in the accommodation and food service sector of Los Angeles, this is because the sector is growing consistently and the requirement for highly skilled workforce is also increasing with this growth. (Staff Members of the Los Angeles Research Group, LLC, 2014)

2.1.4. Opportunity

As the accommodation and food service sector of Los Angeles consists of a number of sub-sectors, therefore, a number of opportunities exist in this sector for the entrepreneurs. The consistent growth and favorable financial condition of the sector provide the entrepreneurs with extensive opportunities to initiate and operate progressive business in the sector. In addition to that, the consistent increase in demand also makes this sector a favorable location for the initiation of a business. (Staff Members of the Los Angeles Research Group, LLC, 2014)

2.2. Overview of Dubai Restaurant Industry

Tourism has become a growing sector in almost every economy. Tourists also require food and accommodation which has given rise to the restaurant industry. The restaurant industry is one of the most rapidly growing industry in UAE. Dubai, being the key tourism earner of UAE, also has many restaurants and hotels operating in order to provide food and accommodation to the plethora of tourists coming in every year. As the tourism industry is expanding every year, so is the restaurant industry. (The Dubai Department Of Tourism And Commerce Marketing, 2014)

The restaurant industry of UAE is humungous in size. In the first half of 2011, the hotel rooms were fifty four thousand two hundred and twenty one and the amount increased to eighty four thousand five hundred and thirty four in 2013. The industry attracts more and more investors each year. These investors then start new projects which amplify the size of the industry and then attract more investors. Plenty of new structures including buildings, malls and even artificial islands are formed in order to expand and support the tourism and restaurant industry. Multifarious investor groups have announced new projects related to the industry. (The Dubai Department Of Tourism And Commerce Marketing, 2014)

As the industry gets crammed up with investors and businesses, the competition normally increases. Similarly, the restaurant industry of Dubai is also getting competitive. The investors have to think of new and innovative ideas to attract the tourists and locals to their restaurants. The result of this competition is that the new restaurants are coming up with innovative ideas and in order to compete with them, the…