A Café Trading on the Previous Owner's Licence
Three months ago Mr Raza bought 'Chai Khana', a 40 square metre café in Rawalpindi, as a going concern. The premises licence on the wall is still in the seller's company name, valid for another seven months, and the seller told him 'the licence goes with the shop'. Since taking over, Raza has rebranded the signboard, added a tandoor and a second fryer, and hired two new food handlers who have no medical certificates on file. The extraction hood was not upgraded. Total staff is now five. A PFA inspector visits on a routine round, sees the mismatched name on the licence, and asks for the licence, the food handlers' medical certificates and the layout drawing. Raza produces only the old licence and a rent agreement. He asks whether he can simply keep trading until the licence expires and apply after that.
1. Is the licence on the wall valid for Raza's business? Explain your reasoning.
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No. The licence does not belong to the shop or to the signboard; it belongs to the legal entity and the particulars it was issued for.
- A food business licence records the licensee, the premises, the business category and often the layout. When a business changes hands the licence does not automatically follow, and the seller's seven remaining months are the seller's, not the buyer's.
- Trading under another operator's licence misrepresents who is responsible for the food. If a violation is found, the paper trail points at a company that no longer runs the kitchen, while Raza is effectively unlicensed.
- The correct route is a fresh application in Raza's name, or a formal change of ownership or particulars where the Authority permits it, with the prescribed fee, current layout drawing and supporting documents. Category and fee depend on business type and area, so confirm the current schedule on the PFA portal or at the office rather than relying on the seller.
- Until the licence is issued, keep the application acknowledgement on the premises and be able to produce it on inspection.
2. What does the tandoor, the second fryer and the two new handlers mean for the application?
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They turn this into a change of particulars, not just a change of name.
- Layout: submit an updated scaled drawing showing the tandoor, the fryer, extraction, wash-up, handwash basins, storage and staff changing and toilet access. Structural changes normally need the Authority to see the plan before or at inspection, not afterwards.
- Ventilation: a second fryer and a tandoor add heat, smoke and grease. State extraction capacity and cleaning frequency; grease-laden hoods drip onto food and are a fire risk.
- Food handlers: both new staff need valid medical certificates before handling food, plus documented hygiene training. Five staff means five files.
- Utilities and pest control: evidence of potable water, a working grease trap and routine pest-control visits.
- File now, pay the assessed fee and keep the receipts. Ask for the inspection rather than waiting to be caught.
Advising on plan changes before submission is far cheaper than rebuilding after a rejection.
3. What are the risks of trading until the old licence expires, and what would you advise Raza to do?
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The risk is concrete and grows every day he trades.
- Enforcement exposure: operating without a licence in his own name is a straightforward violation. Outcomes range from a written direction and fine to sealing of premises, depending on the Authority's assessment and any repeat findings. The unapproved tandoor and handlers without medicals make the file worse.
- Liability: if a customer becomes ill, insurance and any defence are weakened when the operating licence names someone else. The seller's company could also face action for a kitchen it no longer controls.
- Commercial: delivery platforms and corporate clients ask for a licence in the trading name, and mismatches get accounts suspended.
- Advice: apply now, do not wait for expiry; make the signboard, legal name and licence consistent; keep one folder with the application, fee receipt, medicals, training records and layout. Ask the Authority in writing whether interim trading is allowed while the application is processed, and get the answer in writing.
- Correct the seller's belief explicitly: 'the licence goes with the shop' is not how licensing works.