Opening or Taking Over a Bar-Tobacco Shop: Credit Conditions and Assistance
Embarking on the sale of tobacco and alcohol is not as simple as snapping one's fingers. The profession is highly regulated in France, meaning that the manager must meet certain prerequisites to operate their business legally.
Embarking on the sale of tobacco and alcohol is not as simple as snapping one's fingers. The profession is highly regulated in France, meaning that the manager must meet certain prerequisites to operate their business legally.
Before diving into these details, if you are interested in opening a tabac or bar and looking for some professinal advice, Micco can provide all the services you need.
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Table of Contents
- Mandatory Training to Open a Tobacco Shop
- Legal Requirements for Selling Alcohol
- Different Legal Forms of a Bar-Tobacco Shop
- How to Obtain Approval from the French National Lottery Company for Sports Betting and Scratch Cards
- Opening a New Bar-Tobacco Shop with Professional Loans
- Ensuring Adequate Supplies and Funds to Launch the Business
- Cost of Purchasing or Taking Over a Bar-Tobacco Shop
- Easier Financing for Reopening a Bar-Tobacco Shop
- Other Financial Assistance Methods
1. Mandatory Training to Open a Tobacco Shop
- To open a tobacco shop or a dedicated area for cigarette sales in a bar, the future owner must inform the customs authorities of their region about their project and its location. Once the authorization is obtained, the tobacconist must first attend mandatory initial professional training.
- Lasting 3 to 4 days, the training costs around €800. It must be conducted at a state-accredited training center. Then, a management contract, lasting 3 years, must be signed with the government. At its conclusion, it can be renewed provided that a new training session is attended 6 months before the end of the contract.
2. Legal Requirements for Selling Alcohol
- Opening a drinks establishment is conditioned by compliance with hygiene, safety, and marketing promotion standards. The manager must also acquire an operating license by completing training related to the sale of alcoholic beverages. Once this training is completed, the IV license, which is mandatory for operating a business where alcohol is consumed on-site, can be issued. Its cost is estimated between €8,000 and €25,000, depending on the location of the bar, and its validity period is 10 years.
- It should be noted that opening a bar-tobacco shop is not permitted in places classified as "protection zones." For example, it is strictly prohibited to operate your business near a health facility, a sports stadium, or a company with more than 1,000 employees.
3. Different Legal Forms of a Bar-Tobacco Shop
- The manager must also choose the legal form of their business. They have the choice between 2 types of organizations:
- If the management of the bar-tobacco shop is handled by at least 2 partners, who can be natural or legal persons, the status will be a Partnership (SNC).
- If the manager is the sole operator of the business assets, the legal forms can be: sole proprietorship, Sole Proprietorship (EI), or Sole Proprietorship with Limited Liability (EIRL).
4. How to Obtain Approval from the French National Lottery Company for Sports Betting and Scratch Cards
- To complement their offer and diversify their business activities, a bar-tobacco shop manager can obtain scratch cards after submitting a file to the French National Lottery Company (FDJ). Following acceptance by the organization, a 2-day training will validate the ability to sell this service.
- 6 months after the authorized sale of scratch cards, it will then be possible to apply for the "Draw Games and Sports Betting" approval to market lottery games and register bets on sports in your establishment. The application must always be made to the FDJ.
5. Opening a New Bar-Tobacco Shop with Professional Loans
- The capital you borrow to finance the opening of your bar-tobacco shop must be repaid within a maximum period of 7 years. In the case where the amount of purchasing a property must be added, the duration cannot exceed 15 years. But before obtaining the funds, preparatory steps must be followed.
- Prepare your file and business plan well in advance of your financing request. The business plan, which you must write before applying for funding, must contain all the information related to the opening of your own café (estimated total investment, purchase of licenses, obtaining approvals, forecast turnover, development strategy, etc.).
- This document must also demonstrate your motivation and ability to generate turnover in anticipation of your growth strategy. For this, it will be welcome to diversify your activities in your future bar-tobacco shop. The objective will be to sustain your business by diluting the risks of dependence on a single activity, such as alcohol or tobacco sales, and to generate more income.
6. Ensuring Adequate Supplies and Funds to Launch the Business
- If you plan to open a new café, the bank from which you will finance it will present very strict financing conditions. Indeed, the sectors of drinks sales and tobacco sales have been disrupted for several years. The risks of encountering difficulties after launching your business are therefore not negligible.
- In addition, the amount to be invested to create a bar-tobacco shop is often higher than a takeover. You will need to purchase all the essential equipment for the profession (tables, chairs, display stands, bar counter, etc.), your stock necessary for the launch of the activity (cigarettes, beer barrels, various alcohols and other goods), possibly a commercial property, pay all licenses allowing the operation of bar-tobacco-lottery activities (III and IV licenses), settle any recourse to a franchise, and finally finance your working capital requirement until you have built up your customer base.
7. Cost of Purchasing or Taking Over a Bar-Tobacco Shop
- The key to success for the bank to support your project to take over a bar-tobacco shop is also to develop a solid business plan. Show convincingly your ability to maintain the commercial activity of the café and, ultimately, to increase it to secure yourself in order to ensure the repayment of the professional loan.
- Before proceeding with the financing request, however, it is essential that you have estimated the price of the business assets to be acquired. The bank will indeed want a precise estimate before deciding to finance your project. This sales price will be superimposed with the performances achieved by the manager in the past and your forecast results that you plan to achieve. Based on the existing and your projections, the bank will make a comparison of these figures to decide if your objectives are achievable.
8. Easier Financing for Reopening a Bar-Tobacco Shop
- It is more difficult to finance the opening of a new café-tobacco shop than to take over an already open establishment. There are several reasons for this:
- Banks have stricter financing criteria when it comes to starting a new business.
- Competitors positioned in this sector are often numerous; gaining market share by opening a new store is therefore not easy.
- The sector faces increased awareness of the harmful effects of tobacco and alcoholic beverages on health, as well as aggressive taxation by governments aimed at reducing their consumption.
- Therefore, opening a bar-tobacco shop is not without risks. Between very strict regulations, a highly competitive industry, and high investment to launch the activity, taking over a business that is already profitable may be more prudent.
9. Other Financial Assistance Methods
- Several measures are available to support and
facilitate project financing. These aids also apply to entrepreneurs who plan to open or take over a bar-tobacco shop. Here are some examples:
- Bpifrance Creation Guarantee: This guarantee can secure between 50% and 60% of a professional bank loan.
- Entrepreneurship Assistance Grants from Pole Emploi: These are available for unemployed individuals.
- Honor Loans: These allow borrowing capital at zero interest rates from dedicated organizations (such as Réseau Entreprendre, Réseau Initiative France, Réseau France Active, etc.).
- Subsidies: These may be provided by the region or municipality.
- Aid Programs such as NACRE, ARCE, ACRE, or CAPE.
In addition to these assistance programs, personal funds, and professional loans from banks, it's possible to further diversify financing sources. For example, an entrepreneur planning to take over or open a bar-tobacco shop can borrow up to €10,000 with a microloan or propose their project on a crowdfunding platform.
Reopening a bar-tobacco shop is often more feasible in terms of financing compared to starting a new one. The availability of an existing customer base and established operations reduces risks and makes it easier to secure financing from banks. However, thorough planning and adherence to legal and regulatory requirements remain essential for success in the bar-tobacco industry.
As a financial services company, Micco provides comparable services and solutions tailored to the needs of modern businesses. With a user-friendly platform, competitive pricing, and a commitment to customer satisfaction, Micco is another viable option worth exploring.
Whether you're a freelancer, startup, or established enterprise, Micco offers the tools and support needed to streamline financial operations and drive business growth. Check out Micco today to discover how it can complement your business banking needs.
