1. Outline of business

1.    Outline of business
1.1    Princess Café is located in shop A112, Level 1, Doncaster Westfield shopping centre (619 Doncaster Road, Doncaster VIC 3108) and belongs to Manningham City Council. Princess Café has a 50m2 of lobby to serve customers and its own kitchen. I am aiming to create a vintage style café, so in this café there will be tons of vintage pictures, furniture and decorations. Café opens 9am to 5pm Saturday to Wednesday and 9am to 9pm Thursday to Friday. I would like to serve coffee, tea, soft drinks and home-made desserts to customers. Customers are welcome to bring their own alcohol to my café and enjoy. I will employ 2 pastry chefs, 1 kitchen hand and 3 fronts of house staffs.

1.2    Princess Café is under sole trader business structure. The reason why I choose to run this business by myself is that it is easy to set up and it requires minimal reporting. I have $100,000 invested in this business and I don’t need any loan from bank. Furthermore, I can retain effective control and all profits in it. It is also easy to sell or discontinue this business.

1.3    ABN is a general legal requirement for my business. The Australian Business Number (ABN) is a unique identifier issued by the Australian Business Register (ABR) which is operated by the Australian Taxation Office (ATO). Applying for an ABN is not compulsory, but if I want to register for GST, I need to apply for ABN before. If I don’t have ABN for my business, other businesses have to withhold 49% from their payments to me. To apply it, I can go to https://abr.gov.au/.

2.    Registration and licensing requirements
2.1     To start my business, I have checked all information on http://www.business.gov.au/. This website shows me how to start a business and how to choose business structure. It is very important to identify the business structure as different businesses have different legal documents to apply and different tax to pay. Then I go to https://ablis.business.gov.au  to find out the detail of legal documents to apply for my business. There is an ABLIS search on the home page. I need to type in the business type “café “and the location of the business “Doncaster”. Then it will show me lots of options about how I want to run my business such as taxation, building construction, employment, etc. After I complete all questionaries, I will get a checklist of legal documents. Firstly, I need to apply an ABN before I register the business name. As a sole trader, I have to pay my own wage so I need a TFN as well. Then I need the AUSkey to access the ATO Business Portal which allows me to lodge my business activity statements online, check my tax account balance and update my details. Secondly, I will employ some staffs working for my business, so registering PAYG withholding is essential.  I will also register GST because I expect my turnover exceeds $75000 or more. Fourthly I want to my customers enjoy their time in my café with beautiful music, so I need to apply Background Music Licence and Licence to Play Featured Recorded Music. Fifthly, as I start my food business from scratch, I have to submit Application for Preliminary Plans, New Food Premises Assessment and provide Food Safety Program which is based on Food Standards Code. Sixthly, my café will allow customers to bring their own alcohol, so Restaurant and Cafe Licence and BYO Permit must be applied.

2.2    To apply for ABN, I can go to https://abr.gov.au/. This website is operated by Australian Taxation Office and it can guide me how to apply for ABN step by step. AUSkey, PAYG and GST can be applied during ABN application. Australian Taxation Office also has responsibility for TFN. After I get an ABN, I can go to http://asic.gov.au/for-business/registering-a-business-name/ to register business name which is operated by Australian Securities and Investments Commission. As I will use background music system in my café, I have to go to http://apraamcos.com.au to apply Background Music Licence and Licence to Play Featured Recorded Music which cover the use of any of devices for the broadcast of background music. These licenses are operated by Australasian Performing Right Association / Australasian Mechanical Copyright Owners Society and need to be renewed annually. To apply submit Application for Preliminary Plans and New Food Premises Assessment, I can download the forms from https://www.melbourne.vic.gov.au/enterprisemelbourne/industries/healthcare/Documents/Application_Form_Preliminary_Plans.pdf and  https://www.melbourne.vic.gov.au/enterprisemelbourne/industries/hospitality/HospitalityToolkit/Foodandhealth/Documents/Proposed_Food_Premises_Assessment.pdf then mail them to Health Services Branch. Victorian Commission for Gambling and Liquor Regulation (VCGLR) is operating Restaurant and Cafe Licence and BYO Permit. I can find all information and application forms on http://www.vcglr.vic.gov.au/.

3.    The statutory guarantee of consumer law and how they might apply to my business
3.1    Under the Australian Consumer Law, the statutory guarantee of consumer law applies to the automatic guarantees that suppliers and manufactures of given products or services attach to them when they sell them to consumers (Australia Consumer Law, 2010). This means that consumers have certain mandatory rights when they purchase goods or services irrespective of the warrantees that may be attached to those goods or services. In this regard, the statutory guarantee stipulates that Manufactures and suppliers guarantee that goods and services are of the accepted levels of quality and fit descriptions (Australia Consumer Law, 2010). The statutory guarantee of consumer law also states that suppliers and manufactures guarantee that they will respect warrantees. As regards suppliers, suppliers are expected to guarantees that goods sold to consumer have express titles unless specified differently, goods sold to consumers are suitable for disclosed purposes, goods sold to consumers  do not have undisclosed securities, and goods sold to consumers  match samples or models used for demonstrations (Australia Consumer Law,2010). In relation to services, the statutory guarantee of consumer law states that services provided to consumers are offered with due skill and care, they are provided within adequate duration, and are fit for given purpose. The consumer guarantees are applied to any types of services or goods amounting to $40,000, services or goods that cost over $40,000 and are utilized for household, domestic, or personal purposes (Australia Consumer Law, 2010). In case that the goods do not meet the guarantees, the consumer will invoke certain rights against the suppliers.  As regards my business that is Princess Café, the statutory guarantee of consumer law can apply in situations when the foods provided are of low quality, cause problems to consumers, or when the services are deemed by consumers to be poor.

3.2    The unfair business conduct of misleading or deceptive conduct might apply to my business when I advertise products or services that in reality are non- existent in the organization. By doing this, I would be misleading consumers into visiting the Café and in return fail to deliver what I promise (Australia Competition and Consumer Commission, 2014). In this case, the conduct of misleading will be applicable to the business.

3.3    The Australian consumer law covers the areas of public holidays and surcharges. Since the law provides conditional exemption to component pricing requirement to Café’ menus surcharges for specific days such as public holidays, the law impacts positively on my business which is Princess Café. In other words, the law provides the business with exemption to raise the prices of the products sold during certain days (Australian Consumer Law, 2010). An example of advertisement that reflects these requirements in my business is; surcharge of $10 will be applicable to individual customers of Princess Café on Sundays or public holidays. Through the advertisement, the surcharge that will be applicable to consumers during Sunday’s or public holidays is known beforehand.

3.4    If a consumer has a complaint about my business, I would take the following steps to resolve the claim;
•    Express sorry for the problem experienced by consumer
•    Request the consumer to identify what the complaint is
•    Promise the consumer prompt action
•    Request the consumer’s opinion on how she or he would like the issue to be addressed
•    Act on the complaint based on the consumer wishes and facts surrounding the complaint

4    Contracts
4.1    The people whom Princes Café is likely to enter contracts with include
•    Consumers
•    Suppliers of materials
•    Legal advisors
•    Other businesses such as bookstores

4.2    Two situations in the business when a verbal contract can occur.
The elements of a contract include offer and acceptance, consideration, mutual consent, certainty of terms, permitted legal expressions of contracts, and legal capacity (Kelly, 2010). With regards to Princes Café, one of the situations when the business can enter a verbal contract is when an adult consumer orders, eats, and pays for a meal. When an adult consumer orders for a meal in Princes Café, the consumer will be making an offer which is the intent to consume something. On the part of the business we will agree to bring the food to the table and this will constitute the offer and acceptance part of the contract. Because the consumer is an adult, it means he or she will have the legal capacity. When there is agreement between the consumer and the Princes Café, there will be consent, which is an essential element of a contract. By the Café providing the food offered and the consumer paying, the consideration element will have been upheld.  Since the customer will pay after eating the meal, it means that there will be certainty of terms that is customers pay when they consume meals. Lastly, by paying for the meal consumed, there will be a permitted expression of the contract and this represents another key element of contract formation.
The second situation when the business can enter a verbal contract is when the business agrees with a bookstore to supply coffee to their customers and pay the bookstore a commission on each sale. Under this arrangement, the suggestion to pay the bookstore a commission after supplying their customers with tea will constitute an offer. The bookstore agreeing to the deal will imply to the offer and as such, the offer and acceptance element will be present. Because the bookstore is also run by adults, there will be legal capacity to the contract. By both parties agreeing to the deal, it means there will be mutual consent. At the same time, when the two parties express their desire to the deal, it means that there will be certainty of terms understood by both sides. When the business pays the commission, there will be consideration.  Lastly, by honouring the contract, it implies that the contract will have been expressed in one of the legally accepted ways.
4.3 Employment contracts
One of the provisions I would include in the employment contract entails job duties and I will include this provision so that employees realize whatever is required of them(Collins,2010). The second provision I would include in the employment contract is the confidentiality agreement. This provision will be included because it will protect the secrets of the business (Collins, 2010). Third, I will also include termination as part of the contract provision because there are likely to be situations when employment is to be terminated (Collins, 2010). Lastly, I will also include the provision of arbitration. Because the business is not big, arbitration will be helpful in settling disputes involving employees outside of courts (Collins, 2010).


Australia Consumer Law(2010). Consumer Guarantees: A guide for businesses and consumers. [Online] Available at http://www.consumerlaw.gov.au/content/the_acl/downloads/consumer_guarantees_guide.pdf [Accessed on April 19th 2015] Australia Competition and Consumer Commission (2014). Unfair business practices. [Online] Available at: https://www.accc.gov.au/business/treating-customers-fairly/unfair-business-practices [Accessed on April 19, 2015] Collins, H. (2010). Employment law (Second ed.). Oxford: Oxford University Press.
Kelly, D. (2011). Business law (6th ed.). Abingdon, Oxon: Routledge.

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