Change of operator and unapproved works
A 120-seat restaurant in Tsim Sha Tsui is sold as a going concern. The new operator pays HK$2.8 million, takes over on 1 March, keeps the old licence on the wall, and reopens on 5 March under the old licensee's name. In April he removes the staff toilet and converts it into a 6 m² storeroom, installs a new gas wok range, and extends the exhaust duct through the rear yard. No plans are submitted. An EHO visits after a neighbour complains of noise and sees 14 staff working, the old licence displayed, and the toilet missing. The new operator says he 'bought the licence with the business' and that the works are 'minor'. The restaurant is still serving food.
1. What is the legal position on the licence after the change of operator?
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The licence is not a marketable asset that passes with the goodwill. A food business licence is personal to the licensee, and any change of licensee requires FEHD's approval. The new operator cannot lawfully trade on the old licensee's licence. Displaying the old licence while the new operator runs the business is misleading and is likely an unlicensed food business. The old licensee may also remain liable for breaches. The correct route is an application for a new licence or an approved transfer or change of licensee, with the new operator named as the responsible person. The new operator should stop trading until the position is regularised, unless FEHD gives a specific written authority.
2. Were the toilet removal, new wok range and exhaust extension 'minor' works? Explain the approvals needed.
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No. Removing the staff toilet, installing a gas wok range and routing exhaust through the rear yard change the approved layout and sanitary facilities. The toilet removal reduces staff welfare and may breach licensing requirements. The wok range affects ventilation, fire safety and gas installation. The exhaust extension may affect noise, air pollution and the landlord's property. The operator must submit revised plans and obtain FEHD approval before works; separate approvals may be needed from the Buildings Department, Fire Services Department, Electrical and Mechanical Services Department or gas authority, and the landlord or Environmental Protection Department for exhaust and noise. The works must be inspected before use.
3. What should the EHO do to control risk and regularise the business?
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Document the unapproved works, the missing toilet, the licence name and staff numbers. Require immediate cessation of unapproved works and prohibit use of the new wok range until approved. Consider suspension of the licence if continuing risk is serious. Give a timetable to submit plans, apply for the licence or transfer, restore sanitary facilities and pass inspection. Enforcement options include a warning, licence action and prosecution. Regularisation is prospective; it does not erase the period of unlicensed trading. Check food safety during works, including dust, pests and temporary hand-wash facilities. Confirm that the new operator understands that buying the business did not buy the licence.