3 Things Every Restaurant (Serving Alcohol) or Bar/Karaoke Owner Needs Before Opening for Business
Updated: Oct 30, 2018
1. ALCOHOL BEVERAGE CONTROL (ABC) LICENSE. You need a ABC license from the State you intend to operate your business. Although this article is specific to California, although most States apply similar laws. There are basically 3 ways in which to obtain your license. One, you can obtain a license when you purchase all the assets of an existing business with a valid ABC license. As such, when you are buying a business that serves alcohol, make sure its ABC license is included in the sale and is valid without pending or prior disciplinary actions. The second way is to purchase a license from a current licensee. You can even transfer a license from another location as long as the license is valid without restrictions. In both situations, an escrow is required for any transfers. Also, the buyer must comply with complex State regulations and requirements to be eligible and for the transfer to succeed. The third way is to apply for a new license with the State, which requires navigating through complex State rules and regulations.
2. You must have a CONDITIONAL USE PERMIT (CUP) granted by a Land-Use Planning department of a local government. Check the CUP of the business before purchasing it because without a CUP allowing you to sell alcohol, you will risk criminal conviction of illegal sales of alcohol. Surprisingly, many business owners are not aware of these requirements and end up being cited or arrested by local law enforcement for criminal misdemeanor violations. Thus, if the property that your business operates doe not have a proper CUP, you must obtain one before operating a business that sales alcohol beverages to the public.
3. Your business may require a Police Permit for your local law enforcement agency. For example, If your business offers dancing or karaoke to its patrons, you will need such a permit. In the City of Los Angeles, you obtain this permit from the Los Angeles Police Department. Unfortunately, many new business owners are not aware of these permits and as such don't obtain them. As a result, many clients are surprised when local law enforcement cites them with a criminal violation requiring judicial intervention. Thus, you should check local regulations and ordinances prior to opening a business that serves alcohol beverages. Better safe than criminal court.