The sign on the door of Yeanon Cafe in Ossett, West Yorkshire, reads: "I am a black woman... If you are allergic to black people, don't come in."
Martha-Renée Kolleh said she put it there because of the way she has been treated by some customers.
"When they open the door they will expect to see a black face," she said.
A spokesman for Wakefield Council said they were "obviously concerned" by the issue which they had not been made aware of before.
"I would urge the business involved to get in touch with us as soon as possible," the spokesman added.
Ms Kolleh said the reaction to the sign, which adds the cafe serves "quality wholesome meals", had been mixed.
"Some people find it amusing, they were laughing and said 'oh yes it's about time you put that up', so I think they all realise what's going on here," she said.
Closure threat
"And some others just read it and walk away. I've heard one or two swearwords as well regarding the notice."
The single mother-of-three has run the cafe for two years, serving a mixture of British, African and Caribbean food.
Ms Kolleh told BBC Radio Leeds a lot of people in Ossett had supported her, but if business did not improve she would have to close by autumn.
She said: "I put [the sign] there because of the way people treat me in Ossett.
"They just open the door of my cafe and once they take a look at me they walk out."
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