Are You Dreading The Liquor License Process?

Are You Dreading The Liquor License Process?

Food and drinks go together naturally, so why not get a liquor license? A liquor license can help to increase your restaurant’s profits because the margins on drinks are great and the labor is low.

However, a liquor license comes with social and community responsibility. Because of that, they can be difficult to obtain.

This guide walks you through the whole process, so you know what to expect, before adding alcohol to your restaurant’s menu.

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Basic Liquor License Qualifications

First, make sure your business meets the qualifications. Keep in mind that liquor is regulated at the state and local level. Every community will have their own requirements.

There are some common standards, however. In general, to qualify for a liquor license:

  • You must be 21 years of age
  • You can’t have a criminal record
  • You have already obtained a seller’s permit for your restaurant
  • You took a qualified beverage server training course

Different Liquor License Types

It is important to understand there are several types of liquor licenses you can apply for. Some licenses are for beer and wine, while others will allow you to sell hard liquor. Don’t make the mistake of applying for the wrong one for your restaurant concept.

Types of liquor licenses for restaurants:

  • Beer and Wine License — Approved for sales of beer and wine only. No hard alcohol, or spirits.
  • Restaurant Liquor License — This is the general type of license. It will include beer, wine, and all liquors. But alcohol sales cannot exceed more than 40% of total revenue for the restaurant.
  • Tavern Liquor License — This type of license is for businesses that sell alcohol and food, but alcohol sales greater than 50% of total revenue is permitted.
  • Brewpub Liquor License — If you make your own wine or beer, you will need this license. It also allows for limited distribution of the alcohol you make.

Read More: Choosing a Restaurant Business Structure

The Costs Associated With Getting A Liquor License

The cost of gaining a liquor license will vary depending on the local regulations and how many legal hoops to jump through. One thing is certain, don’t expect it to be cheap.

The cost of a liquor license can range from anywhere between $300 and $14,000 just for the state fees. Many businesses hire a lawyer or consultant to help them acquire their license.

Some states have a set quota per year for liquor licenses that cannot be exceeded, while services exist which can help transfer a license from one business to another. All these factors will affect the cost.

If that isn’t enough, some states require you to have a valid license at all four levels of government — local, state, county, and federal. All of these require a separate approval process.

The type of establishment and the type of alcohol you plan to sell will also affect the cost of your license. Luckily, despite all these variables, you can get a handle on what to expect. Your state’s Alcohol Beverage Control agency will help you to determine the cost of your liquor license.

Steps To Getting A Liquor License

Step 1: Contact your state’s Alcohol Beverage Control agency

The Alcohol Beverage Control (ABC) agency of your state will oversee your liquor license application process. It typically takes 4 months or more to get approved for a liquor license.

The sooner you apply, the better. Because depending on the state requirements, and all the hoops to jump through, the process of obtaining your liquor license may take up to a year.

Your state’s Alcohol Beverage Control agency will tell you:

  • Qualifications to obtain your liquor license
  • Type of liquor you can and cannot sell
  • The hours you may sell liquor
  • Other limits on selling liquor
  • Cost and type of liquor license you need
  • License availability and if any existing businesses are selling their liquor licenses

Step 2: Pre-application preparation

To prevent delays in receiving your liquor license, be prepared before applying.

There may be additional permits required if you plan to sell alcohol. To keep everything on track make sure you have obtained those in advance of your liquor license application.

Permits to have ready when applying:

  • Business License
  • Sales Tax Permit
  • Alcohol Tax Permit
  • Food Handler’s Health Permit
  • Music Permit (if hosting live music)

Step 3: File your application

It is now time to apply for your liquor license.

You will more than likely mail in your application. Send it certified mail to ensure that it is delivered. Otherwise, you could be waiting around, unaware that it was lost.

With your application, you may be required to include fees and additional documents.

Such as:

  • Processing Fee
  • Background Check Forms
  • Fingerprints
  • Lease Agreement Certificate from Secretary of State
  • Copy of Food Service Operator or Food Establishment License
  • Other applicable licenses/forms that may be required

Read More: Choosing a Restaurant Business Structure

The License Approval Process

Although the approval process will vary from state to state, in general, what you can expect is:

  • The application is received by the state’s Alcohol Beverage Control agency and filed.
  • The Alcohol Beverage Control agency will determine the status and if there are any licenses available.
  • The Alcohol Beverage Control agency will process background checks to determine if the applicant has a criminal record.
  • A Compliance Officer will do a physical check of the premises.
  • A public hearing will be conducted if there were any complaints filed against your liquor license application.
  • If no complaints are filed then the application should be accepted within 4-8 months and issued to you.

Renewing Your Liquor License

State and local regulations will determine the length of time your liquor license is valid before renewal. It can range from one to three years.

If you have followed the laws and regulations during the term, renewing your license should be fairly easy. However, even if you have followed all the rules you are not automatically guaranteed to have your license renewed.

If you received complaints or fines it can also cause the ABC to re-evaluate your liquor license. For this reason, it’s important to operate in a reputable fashion and follow all the laws and regulations required.

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Conclusion

Serving alcohol comes with a lot of responsibilities. That’s why local governments regulate the sale of alcohol through a liquor license.

It is important to train and educate your staff to understand applicable laws regarding the service of alcohol. They need to learn when to check ID and when to cut off guests that are too intoxicated.

Not only will this help increase the chances of your license being renewed, but it also decreases the chance of being fined or getting your license suspended.

Be prepared when applying; expect to jump through hoops. Stay up-to-date on the laws that are applicable. If all goes well you’ll have a liquor license, and a profitable addition to your restaurant’s sales by adding alcohol to your menu.

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