Q: Restaurants Opening Without Liquor Licenses
To anyone in the restaurant business, I'd like to know a little bit about something. I have been to three restaurants this month which had each been open for a few weeks. They all had liquor menus, but once I tried to order something I was informed that they did not have their liquor license yet.
Do restaurants ideally wish to get the licenses in time for opening, or is there a "it'll come when it comes" attitude? If it takes such a long time to get a license, why not get on it immediately? Are delays common?
Gotta say, it irks me a little to go out and not be able to have some wine or whatnot. I almost wish I would be told when coming into the restaurant "we don't have our license yet", so I could go somewhere else and then come back when I can get the full experience.
It can take forever and a day to get through the red tape to get a liquor license... It's not that they haven't applied for one - they have, and they're sitting somewhere in the lengthy queue waiting for 'their turn' to actually get it. I'm sure if they had the choice of waiting another six weeks for the license, or opening dry, most vendors would choose the dry opening because they can still make money in that time, they just can't sell booze!
PS. I just noticed that this posting is seven years old! Ooops!
I read through a few of your responses but didn't really see anyone try to answer your main question(s).
Owning and having owned several liquor licenses in New Jersey I can tell you that it generally takes about 6 mos. on average to transfer a liquor license. Here in NJ the number of liquor licenses are tied to the population count in certain area's. Normally a licenses are governed my township, the more residents there are in town the more licenses are authorized. You cannot transfer a license from one town to another, so once you own a license it stays in that town.
There are criminal background, finger printing and some financial checks done. The primary reason for the financial checks is because you have to show the ability to pay for the license in most cases. In New Jersey it is illegal to place a lien on a license so you generally have to buy them outright, prices can vary on the low end $150,000 to $500,000. depending on the location of the license. (I'm speaking for consumption license, not liquor store/sales license)
There is high profit in liquor sales, so I doubt most restaurants open with the thought "it's come when it comes" type attitude. You are losing a lot of money by not being able to sell booze, so in NJ not many people are going to be that patient.
It's been about 7 years since I've gone through the process personally so if some things have changed I apologize.
Australia here. Our liquor licensing sounds similar to Ontario.
Here, you cannot sell, allow to consume (BYO) or give away complimentary alcohol without the correct license.
There are a limited amount allocated within the state. Most licenses are granted via transfer (ie: when a venue goes bust, a new operator moves in and license is transferred. Or new premises open, and application is made to transfer a license from a closed venue elsewhere)
An application for a completely new license can take upward of a year or more, and is often rejected or challenged in court.
We have licensed hair salons now, simply so that the ladies can be offered a free glass of bubbly.
In New York it is a long and complicated chore to get a license even for people who have a license at one location and want to open a second restaurant.
Most restaurant owners hire an expediter/attorney to speed up the process which still drags on and on.
Some restaurants allow BYOB until they get their license but even that is skirting the law.
I do appreciate when I make a res and am told to BYOB.
How ironic - people often love this because even when it's not actually legal, a lot of restaurants allow free BYOB during this phase. (In NYC, for example, you can't allow alcohol to be consumed on premises without some form of license, though not the full blown bar-sort, but this is usually honored in the breach unless someone actually complains to the ABC people.)
Whether it's a long and tedious process or not, most indpendent, non "celebrity" restaurants (like most small businesses) are poorly capitalized, so there's usually a desperate rush to open and start bringing in cash ASAP. If the license isn't there by opening day, too bad. In an ideal world, of course, no restaurant would "prefer" to open without it - alcoholic beverages are the highest margin items on their menus by far!
And sure, like anything else involving a governmental agency, the process and rules vary from state to state, county to county and sometimes even municipality to municipality.
I agree with everything here except with one quibble:
Alcohol isn't the highest margin (usually), it's generally the food. In a previous life, I managed and ran the beverage programs for a few restaurants from upscale casual to multi michelin starred. In each instance my (and colleagues at different restaurants with whom I'd talk shop) Usually ran a Cost of 26-30% for wine (33% being a 3x markup), while food was closer to 22-25%. (25% being a 4x markup)
In California, the licensing process is tedious and slow. I know, I've been through it. Frequently local residents file complaints that can tie up the process for months, a hearing has to be scheduled to resolve them but there is no penalty if they don't show up.
It should be possible to have a license when you open, but I'd bet for small places it probably won't happen. For chains or well funded (lawyered up) corporations, it doesn't seem to be as big a deal. Read into that what you will.
I recently went to a new restaurant that had yet to acquire its license. They were serving beer and wine, but not selling it (i.e., they were comping the booze). I can't think that it was legal, but it was a goodwill gesture that brought me back to the restaurant the next week (when they had their license in place).
I heard that it's really difficult to get the license. It requires a lot of patience and time. It also gets delayed all the time. They also do back ground check of the owners, etc...
I also heard that buying a good lawyer who specialize in getting liquor license(or someone who does this on the side but i heard you can buy lawyer for this) can sometimes speed up the whole process.
You made a reasonable assumption that a new restaurant would have their liquor license. The first time it happened. Now you should know to ASK. Liquor laws vary locally, more than just state to state. And different restaurants will make their own rules.
Our Economic Development Committee is the first stop for licences in our Ward. We don't waste a minute because every day the owners are paying the lease, bank loans and other costs.
We even schedule special meetings to push it. Then damned if some jerk in the neighborhood doesn't file a stupid protest and then doesn't have time to meet until week after next!
The restaurant has to make a financial decision to open when it can. It is sometimes a big gamble that it will ever get that license. Not getting one will likely doom it. It took one over two years to fight a nearby church. We all carried our wine, paid corkage and tipped generously until it finally got it. The restaurant really needed and appreciated our support.
Maybe your jurisdiction allows BYOB. If not, maybe you can haves drinks before and after and skip wine with. If alcohol is that important, you'll just have to wait.
Yes, I made the assumption after being given wine menus with the food menus at all three restaurants, only to have them taken away once asked what we'd like to drink.
I don't know specifics about BYOB in Ontario. I never bring my own wine.
I realize I'll have to wait. I didn't walk out of the restaurants because I was told I couldn't have a glass of wine. Was just curious why I have to wait, that's why I asked.
Now giving you a wine list when they can't serve wine is pretty stupid and downright cruel. It's like saying "here's a list of wonderful food, none of which you can have".
I agree with others that in an ideal situation you would want to open with your liquor license in hand but after months of hemorrhaging cash getting your new business up and running, having everything ready to go but the liquor - it makes sense to open if only to slow the bleeding. It would also make sense to advise your customers.
I cant imagine anyone wanting to open without a liquor license. This is a lengthy process, not to mention expensive. Then there is the chance that someone will protest your license. In my city, most all restauarants that open without a license will offer complimentary wine or beer. It is better to get the establishment up and running if it is ready, rather than waiting to get your license.
In the province of Ontario it is illegal to
a) serve alcohol in a place without a liquor license
b) allow people to bring alcohol without a byob license
c) give away alcohol in any shape or form
d) have discounts on alcohol (although there are some ways you can get around it)
et cetera. Of course, that doesn't mean everybody follows these rules to the letter, but liquor regulations up here is a mass of very sticky tape and generally a bureaucratic mess, which makes liquor licenses that much harder to keep and get in this province.
Here in PA if they don't have a license BYOB requires no license. You'll sometimes find places offering a free drink with dinner. They're allowed to give away alcohol, just can't sell. Last year before a local Mexican place got their license, they had patio parties with a few free margaritas included with the price of dinner.
Probably the main question to be asked here, from the consumer's point of view is: are we talking of a license to SELL alcohol, or a license to CONSUME in the premises?
In the first case (and only then) BYOB should be OK.
In CA my feeling is the license refers to consuming, irrespective of where the bottle was purchased.
However, many restaurans without license allow patrons to BYOB anyways.
liquor laws vary from state to state, and even within the state itself. in boston a liquor license costs about $250,000 and there are a finite amount. so a proprietor has to find one that's available, before even applying to the city. a wine and cordial license is easier and less expensive, but still no cake-walk. i'm in the business, and you want to have that license in place opening day to maximize revenue.
that being said, rents are so high here that any serious restaurant cannot make enough money just being byob. it's one of the reasons dining out in boston is so costly.
Here in PA it's also very expensive to get a license. My understanding of it is that here in PA, there are a limited number of liquor licenses available in the state of PA. Through the laws of supply and demand these licenses are sold at high prices and not everyone opening a new restaurant can afford the license.