Alcohol sales can be a lucrative source of income for restaurants. It has a high markup and a long shelf life, making it an attractive product to sell.
However, to serve alcohol at your establishment, you need the proper liquor license. Several different types of licenses are available, depending on the type of business you plan to run.
Restaurant Liquor License
While obtaining a liquor license Houston TX can be long and arduous, alcoholic beverage sales often provide substantial profit margins for restaurants and bars. The Small Business Chronicle reports that a restaurant with the right license can increase revenue by up to 80%.
A restaurant liquor license entails a permit to sell alcohol on the premises of a restaurant or bar, including cocktails and mixed drinks. This license type requires a full-service restaurant and does not limit the types of alcohol sold, although most states limit what percentage of total revenue may come from alcohol sales.
The restaurant license also enables the business to serve beer and wine with food, subject to certain restrictions. The license does not allow a restaurant to offer happy hour specials or discount alcohol more than four consecutive hours per day or 14 non-consecutive days in a week, nor may the restaurant advertise or hold any contest or tournament on the licensed premises.
Bar Liquor License
If your restaurant is more of a bar or you plan on selling alcohol at your establishment, you will need a bar liquor license. Getting this license will give you the ability to serve alcoholic beverages for on-premises consumption, as well as sell alcohol in kegs or bottles for offsite consumption.
You will also be permitted to hold a happy hour (with certain restrictions). You must only offer discounts on alcohol for up to four consecutive hours per day or 14 hours per week, and you must post notice of all happy hours on your premises 7 days before each event.
Applying for a bar liquor license is much the same as a restaurant liquor license and requires the same paperwork. The state will review your application and look for red flags, such as zoning violations or whether your location would violate the “200 Foot Rule,” whereby you cannot sell or serve alcohol within 200 feet of a school or place of worship.
Tavern Liquor License
You may need a tavern liquor license if you plan a bar that primarily hosts musical entertainment and doesn’t serve food. This permit allows you to sell beer and wine but not hard liquor.
Businesses that want to host off-premises events but would still like to operate as an on-premises licensed establishment can apply for a catering permit. This type of permit authorizes currently licensed on-premises retailers to provide alcoholic beverages at private, indoor events for which they have been hired.
Liquor licensing varies significantly from state to state. Contact your local ABC board for details specific to your location and business. The application process can be lengthy, but it is an essential step to help ensure that you can legally sell alcohol at your company. To minimize delays, ensure your business complies with all ABC requirements, including posting public notices and conducting building inspections before you file your application.
Beer and Wine License
As its name suggests, this license class permits the sale of beer and wine in establishments that provide food/seating. These types of establishments are often called restaurants or taverns. In addition, convenience stores, gas stations, and grocery stores may obtain this license and sell all kinds of alcohol.
The NY State Liquor Authority identifies five classes of wine licenses: restaurant wine, drug store wine, grocery store wine, hotel wine (allowing the on-premises sales of wine in a bar or lounge or room service), and club wine. Some of these licenses may be awarded with beer licenses noted above.
Off-premises licenses permit retailers to sell packaged liquor for consumption away from the business, such as in a grocery or wine/liquor store. The SLA offers eight off-premises license classes and 20 manufacturer licenses for distillers, brewers, and cider makers. In some cases, an established retailer with a valid license can apply for a catering license that allows the business to offer beverages at off-premises events supervised by a licensed caterer.
