Opening a New Location? Here’s What to Know Legally

Expanding your business by opening a new location is an exciting milestone. It often signals growth, stability, and increased demand for your products or services. But before you cut the ribbon, it’s important to understand the legal considerations involved. Overlooking these details can lead to costly delays or disputes down the road. Here’s what you need to know legally before opening that new branch.

1. Choose the Right Business Structure

If your business operates as a sole proprietorship or partnership, opening additional locations may expose you to greater liability. Many owners consider restructuring into a limited liability company (LLC) or corporation when expanding. This helps protect personal assets and simplifies managing multiple branches under one legal entity. If you’re already incorporated, you’ll need to decide whether to operate the new location as part of the existing entity or form a subsidiary.

2. Review Zoning and Local Ordinances

Not every property is suitable for your type of business. Local governments impose zoning laws that regulate how properties can be used—whether for retail, office, industrial, or mixed purposes. Before signing a lease or purchasing property, confirm that the zoning designation allows your type of operation. Some municipalities may also require special permits, signage approvals, or noise and parking compliance.

3. Secure Licenses and Permits

Each location may need its own set of business licenses and permits, even if you already have them for your existing site. Requirements vary by state and city, but they may include:

• General business license
• Health department permits (for food-related businesses)
• Alcohol licenses (if applicable)
• Fire safety inspections
• Building occupancy permits

Failing to obtain the proper approvals can result in fines or even closure. Always verify what’s needed before opening day.

4. Negotiate Your Lease Carefully

If leasing commercial space, the lease agreement is a legally binding contract that can impact your profitability. Pay close attention to:

• Rent structure (fixed vs. percentage of sales)
• Renewal and termination clauses
• Responsibility for repairs and improvements
• Restrictions on signage or operations
• Exclusive use provisions to limit direct competitors in the same property

Having an attorney review the lease helps you avoid hidden pitfalls and ensures the terms align with your business goals.

Read more: How To Negotiate A Commercial Lease

5. Protect Your Brand and Intellectual Property

Consistency is key when expanding. Make sure your trademarks, logos, and trade dress are registered and protected before opening a new location. This ensures your brand identity remains secure as you grow.

Read more: How to Leverage Trademark Protection in Your Business

6. Update Employment Practices

A new location often means new hires. Employment laws can vary by state and even municipality, so review wage laws, overtime rules, and required workplace postings. If you transfer employees from your original location, update contracts and policies accordingly.

Final Thoughts

Opening a new location can be the next big step in growing your business, but it requires more than just finding the right space. By addressing zoning issues, licenses, leases, and legal protections early, you reduce risks and set up your expansion for long-term success. Consulting with legal and business professionals ensures that your new location not only thrives but also complies with the law every step of the way.

For legal help in California and your other needs, contact BERYS LAW on this page. We also offer courses on real estate investing, landlording, and templates right here!