Oct. 5, 2010
By Marjorie Borell
Serving drinks, from Mojitos to Malbecs, will boost your restaurant profits - yet to enjoy these liquid assets, every restaurant operator needs a liquor license. Before you apply, it's important to note that different agencies regulate the process in different states. In most, it's the State Department of Alcohol Beverage Control (ABC) that oversees.
Although liquor laws can vary from state to state or even town to town, they’re all designed to regulate when and where liquor can be served, what type of alcohol can be served, how much, and to whom.
Most states do not require that you hire a liquor license attorney to apply. However, because of the complexity of the process and frequent changes in laws, rules and regulations, it is highly recommended.
In some states you can apply online. In New York, online applications can be found at: http://www.abc.state.ny.us/.
What type of license do you need?
There are several different types of liquor licenses. The kind of establishment you have determines the kind of license you need - and the cost. The most common types of licenses for restaurants include:
- Tavern wine: If more than 50% of your sales are wine and beer.
- Restaurant wine: You can sell beer and wine but not liquor or distilled spirits.
- On-premises (full-liquor license): You can sell beer, wine and liquor.
- Club: Allows private clubs to serve alcohol to their members.
- Brewpub: Establishments that brew and serve their own beer.
- Eating place beer: For places like delis where you can drink beer on the premises and can sell carry out beer.
How to apply
The liquor license application process can be daunting so if you plan to apply yourself, contact the Alcohol Beverage Control agency in your area to learn their requirements. It is important that you accurately comply with their requirements and understand the legal aspects of holding a liquor license.
Typically a notice is sent to the community board or local County Clerk 30 days prior to submitting the liquor license application to the New York State Liquor Authority. In New York City, the local Community Boards meet and the public is invited to voice their opinions and concerns. The Boards can only make recommendations and are not the final decision makers. The New York State Liquor Authority makes the final decision; however, the SLA does take the Community Board’s recommendations into consideration.
On occasion, restaurants may also be granted what’s known as a Conditional Use Permit (CUP). This permit allows a city or county to consider special uses that may be desirable to a community, but are not a matter of right within a certain zoning district.
Other times a town will issue a new license when the population increases – usually issued via a bidding process. Still others have quotas that limit amount of liquor licenses in their area.
In some states, the number of liquor licenses issued is strictly limited. An example is New Jersey, where you must buy an existing one. If you are buying an existing restaurant, you may be able to transfer the liquor license. In this case, an experienced lawyer and real estate broker could be invaluable resources.
The entire process from application to issuance can take from several weeks to as long as many months, and, depending on your location and the type of license you require, fees can be as modest as $500 or as hefty as $50,000 or more. Be sure to factor the time and cost into your business plan and budget.
Choosing an attorney
If you decide to leave the application process to an attorney, choose one that has extensive experience and history of success in your local area.
Some communities groups, block associations, local businesses and Community Boards have established friendly and trusting relationships with attorneys working within their boundaries. These attorneys can advise you on preparing to meet these groups and win their support. The right attorney will also know the history of your location and help identify prior violations or other to obstacles to your application.
The rules governing liquor licenses change quickly and often. A qualified attorney will be abreast of the most recent rule changes. Additionally, New York allows attorneys to self certify retail applications which can significantly reduce your waiting time from many months to several weeks.
Other important considerations
1. Location. Some areas prohibit the sale of spirits entirely. In New York City, no liquor or liquor/wine stores are allowed within 200 feet of a church or school (restaurants, wine or grocery stores are allowed). In other locations, an application may be denied if there are three or more on-premises liquor licenses within 500 feet of your location.
2. License Renewal. Most licenses are valid for a year, but if you maintain good standing with your local agency, you may be able eligible for automatic renewal.
3. Revocation. If, on the other hand, complaints have been filed against you, your license can be revoked. You can also be refused if you, or your partners, have a previous criminal record (felony) or have been convicted of DWI felony.
Once you have your license on the wall and glasses set up behind the bar, training your staff on serving alcohol responsibly and dealing with intoxicated customers will further ensure cheers all around.
* Marjorie Borell is V.P. Associate Director, Restaurants and Retail New York Real Estate Services and founder of www.restaurantspaceny.com. She can be reached at (646) 307-6405 or firstname.lastname@example.org.