Your comprehensive guide for starting a bar business

The ABC's of Alcoholic Beverage Control

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You are so close to your goal of opening a bar – and now you are ready to plan for getting the licenses, permits and inspections you need to open the doors and welcome your first customers. Here is a basic Q&A to guide you through the ABC’s of your state’s Alcoholic Beverage Control for your bar:

What is an alcohol beverage license?

Just as a driver’s license allows you to operate a motor vehicle, an alcohol beverage license allows you to sell alcoholic beverages to individual retail customers, from a particular place (premises). Licenses are issued by municipalities (cities, villages, towns).

Are licenses and permits the same thing?

No. Licenses are issued by the municipality where the business is conducted; permits are issued by the state. While there is some functional overlap, retailers are usually covered by licenses and wholesale and production tiers of the industry are generally covered by permits.

What types of alcohol beverage licenses are there?

  • Class "A" fermented malt beverage licenses allow retail sale of fermented malt beverages (beer) for consumption off the premises. Examples: grocery or convenience stores.
  • "Class A" liquor licenses allow retail sale of intoxicating liquor (including wine) for consumption off the premises. Examples: liquor stores or grocery stores with full liquor sales sections.
  • Class "B" fermented malt beverage licenses allow retail sale of fermented malt beverages (beer) for consumption on or off the premises. Examples: restaurants, "beer bars."
  • "Class B" liquor licenses allow retail sale of intoxicating liquor (including wine) for consumption on the premises, and wine in original containers for consumption off the premises.
  • "Class C" wine licenses allow the sale of wine for consumption only on the premises and allow the carryout of a single opened (resealed) bottle if sold with a meal.
  • Temporary Class B licenses (often called picnic licenses) allow retail beer and/or wine sales, at temporary events like fairs and festivals.

Are license expensive?

It depends. Fees are set by local municipalities, with limits set by state law. Certain "Class B" liquor licenses are considered "Reserve Licenses" and are subject to a one-time fee of not less than $10,000. "Class B" liquor licenses are restricted by a population based quota.

How do I apply for an alcohol beverage license?

Contact the clerk for the city, village, or town where you wish to do business. The clerk will give you applications and information about legal requirements. After you apply, the clerk will publish the application three consecutive days in a local daily newspaper, or once in a weekly newspaper, to see if there are objections in the community. The licensing authority (city council, council licensing board, town board, etc.) will vote on the application. The license may not be granted until at least fifteen days after the application is filed with the clerk.

What are the basic qualifications for a person to get a license?

The basic qualifications are:

  • You must be of legal drinking age (21).
  • You must comply with any state residence requirements.
  • You must have a seller's permit issued by the state.
  • You must have completed a responsible beverage server training course.
  • A criminal record may prevent you from getting a license.

Are licensing qualifications different if I incorporate?

A corporation /LLC must meet the seller's permit and criminal offense requirements. The officers must be of legal drinking age and may be affected by a criminal record.

Does the licensee or the agent always have to be at the premises when it is open for business?

No. There must be one or more licensed operators in charge of the premises. An operator's license is often called a "bartender's license." Not all bartenders must hold operator's licenses, but there must be at least one licensed operator in charge of the premises. To qualify for an operator's license, you must:

  • Be at least 18 years old,
  • Meet criminal record requirements
  • Have completed a responsible beverage server course

As you can see, there are a number of factors involved in making sure that your bar is in compliance with your state and local liquor licensing and permit requirements. If you are unsure of any step or qualification, do not hesitate to stop and ask. If you do not comply, then you are subject to fines and the possibility of losing your license to operate your bar – perhaps permanently. Don’t leave anything to chance and consult with both the authorities and your business attorney to make sure you haven’t missed a step before you officially open your bar for business!

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