Without a doubt, alcoholic beverages produce higher profit margins than food sales, and create an attractive source of revenue for many restaurateurs. Restaurants serving alcohol – whether it’s just beer and wine or all liquors – need to carry a “pouring” license.
One of the greatest benefits to buying an existing restaurant is usually its proven track record and its location. Another significant asset would include an existing liquor license, which can greatly enhance the deal’s value. But whether an establishment is new or already existing, demystifying the process of obtaining a liquor license is really quite simple. In the U.S., liquor licenses are issued state by state with each city and district holding specific laws and regulations to acquire a license. There may be several different classes of liquor licenses depending on local regulations.
In Florida, the Division of Alcoholic Beverages and Tobacco (ABT) issues licenses to the aicaholic beverage and tobacco industries. Florida has approximately 71,000 active alcoholic beverage and tobacco license holders. There are various types of licenses issued including one that allows an establishment to sell only beer or wine (2COP). There are no restrictions on the number of these licenses issued. If you wish to sell all types of liquor, a quota license (4COP QUOTA or 4COP SRX) must he obtained. A 4COP QUOTA license is a full liquor license with no restrictions on the square footage, seating occupancy or food sales of an establishment. These licenses are limited in number throughout the state, based on county population. They have tremendous value and can be moved anywhere in the county. A 4COP SRX license has no value and cannot be moved out of the location. You must keep a certain amount of seats, maintain sales of at least 51 percent food, and have at least 2,500-4,000 square-feet of lease-able space depending on the county.
Reasons for denial by the ABT are usually due to zoning and compliance issues per each municipality and of course the record and reputa¬tion of the licensee. Objections may include failure to meet licensing requirements, opposition from the local authority, objection from a public institution within 500 feet of the premises, or conviction of a felony.
While a lottery system for obtain¬ing a license does exist, more than likely a restaurateur will seek a license through a broker. A 2COP license is issued by the state without restrictions or one can purchase a 4COP QUOTA license in the open market. Always use a reputable broker when dealing with a purchase of a 4COP QUOTA license. Make sure your broker and lawyer do the proper due diligence to make sure your license is free and clear of any state taxes, fines, penalties, etc.
The average price of a liquor license varies from state to state. In Florida, there is a wide range of pric¬es, county by county. For instance, a 4COP QUOTA license in Palm Beach County and Broward County runs approximately $135,000 – $150,000. In other Florida counties such as Monroe County (Key West), it is $450,000
– $575,000 and in Orange County (Or-lando) it is $450,000- $475,000. A restaurateur must renew their license annually with a renewal fee of $1,820 for 4COP SRX and QUOTA licenses and $325 for 2COP licenses.
An issue that sonic markets face is the ever-expanding popularity of the restaurant industry in higher population areas. Due to supply and de-
mand, the price of licenses has risen dramatically in the last few years. The demand has outstripped the suply. The population would have grow to unbelievable levels to issue additional licenses.
So keep in mind when purchasing a restaurant the value a liquor license holds. The 4COP QUOTA license is usually a part of the purchase price, yet the buyer still has to go through the application process. The ART recognizes the commerce value that liquor licenses bring to the state and have a system that accommodates the restaurateur.