All About Restaurant Liquor Licenses

How to Apply for a Liquor License

Cocktail Making
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The sale of alcohol can boost restaurant profits substantially due to great profit margins with most wines, hard liquors, and beer. Likewise, preparation provides comparatively lower hourly volume labor costs—it’s a lot easier and faster to prepare a martini than a hamburger with fries. However, selling alcohol comes with responsibilities. States don’t want just anyone selling liquor. Therefore they require restaurants and businesses to apply for a liquor license.

Liquor Laws

Specific liquor laws vary from state to state and even from town to town. Here are just a few of the areas that general liquor laws cover:

  • When liquor can be served
  • Where liquor can be served
  • What containers liquor can be served in
  • How much liquor can be served at a time
  • To whom liquor can be served
  • How much liquor costs

Liquor laws directly affecting restaurants, pubs, and taverns also vary. A few laws you may find throughout the United States include:

  • No discounts on liquor like happy hour or two-for-one specials
  • Limit of one drink per customer at a time
  • Unfinished bottles of wine may not be taken home
  • No alcohol sales on Election Day (Idaho)
  • Wholesale beer, wine, and liquor vendors cannot sell to a restaurant not in possession of a valid liquor license
  • Insurance companies' refusal to cover claims related to alcohol against venues not in possession of a valid liquor license

Types of Liquor Licenses

Many different types of liquor licenses exist across the hospitality industry. Some allow only beer and wine, while others allow all hard liquor. Here are the most common types of licenses for new restaurants:

  • Beer and Wine Liquor License: No hard liquor or spirits
  • Restaurant Liquor License: The most general of liquor licenses, also called an "all liquor license"
  • Tavern Liquor License: For an establishment that offers food, but whose sales are more than 50% liquor
  • Brewpub Liquor License: May be needed if you plan to make your own beer or wine

Definitions of these liquor licenses vary from state to state. You should incorporate the restaurant liquor license fee into your restaurant business plan, as part of the start-up costs. If you are buying an existing restaurant, you may be able to transfer the liquor license and pay a pro-rated fee, or you might have to buy a whole new license and pay the entire fee. Liquor licenses have to be renewed every year, so keep the price in mind when you are selecting a license.

Applying for a Liquor License

Before you open a new restaurant you need to apply for a liquor license. This can take up to a year, so be sure to apply early. Depending on where you live, a restaurant liquor license can cost a little as $500 or as much as $70,000. Many towns have a liquor license quota, so you may not be able to get a new license at all if the quota has been filled.

The application process to apply for a liquor license can be extensive. If you have any previous criminal record you may be required to submit a letter explaining the situation. Towns or states can refuse a liquor license because of past conduct. Typically a license application must first be approved by a town council. The public is allowed to attend meetings to discuss the application, and their opinions are voiced, recorded and considered as well on decisions to approve restaurant liquor licenses.

Upon approval, the application (and that big fat processing fee) moves on to the state for approval.

Once you have your restaurant liquor license and are ready to open, it is a good idea to send your wait staff to a TIPS training course, which will teach them how to serve alcohol responsibly and how to deal with drunk customers.