Last Updated on Apr 7, 2020 by James W
Running a restaurant is no easy task, and every restaurant owner comes upon an important question at some point in their business planning: Is a liquor license really necessary? If you want to serve alcohol in your restaurant, the answer is an immutable yes. If you’re unsure about pursuing this often expensive licenses, there are a variety of aspects to keep in mind. If you’re consider purchasing a liquor license for your restaurant, keep the following in mind.
The Application Process
The application process for liquor licenses is anything but straightforward. The process can vary based on state, but in general, you’ll be required to apply through your state’s Alcohol Beverage Control agency, no matter if you’re buying a new license or requesting a license transfer. It’s important to speak to employees at your local agency to ascertain the limitations and qualifications you’ll be required to meet. Because the rules can vary by city, county, and state, it’s essential that you spend time researching the current regulations regarding your area’s stipulations. For example, a California liquor license requires application through the ABC. This governing body requires proof of location and lease or ownership, and you may be required to acquire a local business license.
The Basic Qualifications
No matter where your business is, there are general qualifications that apply to most liquor license holders. You must be 21 or older and you’re also required to have a clean criminal record. Expect a background check, and understand these stipulations before beginning this arduous process. In most cases, you’ll be tasked with acquiring a seller’s permit in your local area. Often, restauranteurs find they must also pass a beverage training course before they can consider applying for an alcohol permit.
The Prices Can Vary
While prices of liquor licenses based on a variety of factors, one truth remains: they’re expensive, and often a lot more than you might think at the onset of your business. The variables that affect liquor license price include the state of the national and local economy, your location, and the competition in your area. Depending on the type of license you’re looking for, you might find that you get away with only spending a few hundred dollars. If you’re looking for a full-sale liquor license that’s hard to come by, the cost can easily rise to hundreds of thousands of dollars and you may need to consider approaching a private investor to work with you in this endeavor.
Many states have limited the amount of licenses available, and because the limit has been reached in most places, prices depend on the market. Beyond licensing issues, you’ll find you’ll spend money in other areas when it comes to alcohol sales. In some states, there are certain hours during which you can’t sell alcohol; if you want to extend the amount of time you can provide alcoholic beverages, you’ll have to pay more. If you plan on manufacturing or distributing alcohol within your establishment, you’ll also need to pay more and likely go through a variety of hoops.
Which License Do You Need?
Before applying for a liquor license, determine which permit is best suited for your business endeavors. Not every alcohol permit was created the same; there are a large variety based on state and locality, and intended usage. Depending on the drinks you hope to serve and the area you’re in, you may find some alcohol permits don’t suit your needs. In general, if you want to serve only beer and wine you’ll pay much less for a liquor license than those looking for a permit that allows the sale of liquor as well.
Securing Your License
As previously mentioned, many counties and states have reached their quota of available licenses. In order to purchase one, you’ll have to approach a private seller. Because the amount available is limited, private sellers can charge an arm and a leg. If you’d like to expedite the process and find the best prices, use a brokerage service. Although you may pay more for their services, you’ll likely pay less for your license in the long run.