What to Check for Before Applying for a Liquor License

California is a state of vivid contrasts. The natural beauty, the world-class wines, the gorgeous drive down the coastline on the 1… but before opening a business that capitalizes on the assets, entrepreneurs are in for a rude awakening with the local and state agencies.  

If your business involves alcohol, the two places to start are with the Department of Alcoholic Beverage Control (ABC) and the local Planning Department. Before you submit forms and fees, hire contractors, sign leases or hire a GM, you should understand the processes, timelines and political factors as much as possible. Both agencies can add restrictions to your license and a consultant or attorney can help you understand if you have options to oppose.  Realistic expectations in dealing with these agencies can be the difference between a successful business and a money pit. I highly recommend working with an experienced guide (such as myself 😉) as you navigate the bureaucracy.  

The State 

The challenge with the State ABC can be understanding the options and fitting your creative business model inside one of the license types. Each has different privileges and restrictions, and often their limits will influence your operations.  

Some licenses are available from ABC directly, but others are ‘controlled’ and must be purchased from another licensee. Once you transfer an asset of value like a liquor license or a business, you may need (or want) to use an escrow to protect the parties.  

Calling ABC directly does not always provide accurate info as the agency is very hierarchical and the people who answer the phones are not the people who make the decisions. Sometimes they’re wrong about requirements or misunderstand the question. The Alcohol portion of the Business & Professions Code is nearly 700 pages and written in legal terms that are mind-boggling to many normal people, whether they are employed by the agency or not.  

Working with an experienced consultant or attorney can smooth out rough edges and help you get to the finish line without too much trauma. 

Local Planning Department 

Because boy are you going to need your wits about you for dealing with the local Planning Departments.  

I hate to fearmonger, but this is the one area I consistently see people underestimate before starting new projects. The Planning Department (city or county) that controls the jurisdiction of your project has veto power on your business, and it’s essential to have a clear sense of their support before you dive in. 

While the ABC has its own problems, at least they are using the same rulebook and there are more experts who can help you. Cities all have their own codes with different definitions of uses (full-service restaurant or limited service restaurant, which can have what types of alcohol etc.). Some uses are Principally Permitted, some are Conditionally Permitted, and some are flat-out Prohibited.  A Conditional Use Permit (CUP) can take 9-12 months and thousands of dollars, sometimes taking much longer than the state licenses.  

There are also more political factors in local Planning Departments, and getting the support of the council or supervisors is necessary.  

Local experts or lobbyists can be harder to find or very expensive, so working those costs into your budget is wise to do on the front end.  

But the value of an expert may be well worth it. The city processes can be even more obscure than the state one, with decision-makers you don’t find out about until things don’t go your way at a hearing. 

In Conclusion 

I don’t want to dissuade any inspired chef or winemaker from opening a business in California. I want to try your wines & whiskys and the experiences you are going to create. My goal is to help people open great hospitality businesses and contribute to California’s reputation as an industry powerhouse. 

Approaching a project with realistic expectations is not the sexy part of the process, but I think it can help avoid unnecessary problems and make you a better business owner. 

I help hospitality businesses with any license or permit application that has to do with alcohol… local, state ABC or Federal TTB.  

Give me a call if you have questions about an idea, I’d love to be on your opening team.