Buying a California Liquor License
The state of California’s Department of Alcoholic Beverage Control (ABC) requires business owners to apply for liquor licenses in order to sell or serve alcohol to the public. As with any governmental process, the procedure involved in applying for a liquor license will involve many different steps and requirements. It is very important to remember that there are over 75 different types of liquor licenses in California. One of the most crucial steps in the entire process is determining the appropriate type of license needed by the business. Often this requires professional consultation, in order to prevent a situation in which the entire procedure is completed incorrectly and must be restarted from the beginning stage.
The proposed location for the operation must be owned or leased by the license holder. Documentation proving ownership, or a business lease for the location, must be provided. For individuals hoping to start a new business, issues can arise when a lease is signed and yet the liquor license cannot be approved for various reasons.
Zoning laws in counties or cities can also impact liquor license approval. Obtaining the correct zoning permit – which is required before the liquor license can be granted – is another large hurdle in the entire process. This will usually involve research, filling out multiple forms, attending public hearings, notifying the community’s residents, and making a case for the permit, including answering questions and concerns. Expert guidance during this phase is critical, because ABC will not, under any circumstances, issue a liquor license without the appropriate zoning permit.
In addition, because the state of California no longer issues hard liquor licenses, obtaining this type of license will require finding a liquor license holder in the same county who is willing to sell their license to the business owner. A liquor license broker will be able to locate an appropriate seller and initiate the transaction. It should be noted that negotiating the private sale of a liquor license can be tricky. California state law requires that an escrow be opened for this type of transaction; however, the procedure to buy a California liquor license is very different from a real estate transfer. Utilizing the services of an escrow company familiar with ABC regulations is imperative.
There are various points during the process for obtaining a liquor license at which problems can arise. Community concerns or objections, inadequate paperwork, or overlooking even one of the many complicated steps in the application procedure can completely derail the business owner’s plans. Since these mistakes can be costly, impacting business operations and profits for months or even longer, having experience and professional representation can be a vital key to success.