Human beings are social animals and what better way to socialize than getting together outdoors under the beautiful Texas sun.  That is, until we remember we’re in Texas when the sweat starts rolling down our cheeks. That’s when its time to reach for a cold one. As we’re reaching, it’s easy for the more entrepreneurial of us to spot a good business opportunity.

It’s only logical to think there should be some way for someone to go around to events outdoors and offer a cold beer or a frozen margarita to a sweaty throng of sports fans from a mobile facility like a trailer or food truck.  Unfortunately, it’s just not possible with the liquor laws in Texas.

You cannot obtain a liquor license for any kind of mobile business that travels around town serving customers at multiple locations using a food truck or trailer.  A liquor license can only be issued to a physical address, which means you need a permanent, fixed location like a restaurant.  Food trucks are mobile and have no address, so they don’t qualify unless they operate from the same physical address.

The only time you can really be outdoors selling drinks as a vendor is if you already have a liquor license (for your restaurant, for example) and you’re participating in a civic event like a “taste of my town” that’s sponsored by your local government.  Restaurants at events like this will set up a booth or tent to sell their food and, with a TABC temporary permit, can also sell drinks.  These events usually have control barriers in place to prevent folks from leaving the event with their drinks in hand and violating open container laws.

However, we have in fact processed applications for private sporting facilities like golf courses and soccer clubs who maintain their own fields. Facilities like this are usually fenced in, have access to running water, permanently fixed outdoor dining tables and seating as well as public bathrooms. These facilities are, of course, permanent structures with physical addresses and the liquor licenses are obtained by the private companies or individuals that own and operate them.

If you have a TABC liquor license already at your business, you can also obtain a TABC catering license that allows you to set up a cash bar at special events located in wet areas.  If you’re catering a wedding reception, for example, using a TABC catering license you can also set up a cash bar and sell drinks by the glass. Many outdoor facilities available for rental qualify as a good location for catering alcohol so you should consult your local TABC field office in advance to see if you can cater alcohol at the location.

If you have more questions, please feel free to contact us at Texas Liquor License. No question is unworthy of an answer. We understand how complicated the Texas alcohol laws can be to the uninitiated and it’s always best to do as much research as you can before you pull the trigger on that new business idea.  We look forward to being of service to you.

 

(c) 2015, Texas Liquor License.


Another frequent question we hear often from potential clients is whether or not one has to be a citizen of the United States before you can qualify for a liquor license.  The short answer is no.

The most important criteria for immigrant applicants to consider is work permit status.  Non-citizens must have the legal right to work inside the U.S. before they can consider applying for a liquor license.  There are many forms of legal residency that can be granted to foreign persons residing inside the United States, but they don’t always come with a work permit.

All applicants applying for a business liquor license from the TABC are scrutinized as to the legal status of their residency.  Most applicants are native born citizens and their citizenship is evident from the criminal background check conducted by the Texas Dept. of Public Safety in relation to their liquor license application.

When applying for a liquor license, Non-citizen applicants are asked for their immigration status.  Naturalized citizens must submit their alien registration “A” number on their TABC application, which number is located on the naturalization certificate they were presented with.  Unfortunately, most naturalized citizens received their certificates years prior to submitting an application with the TABC and cannot produce their “A” number. In cases like this, it’s possible to use the number from their U.S. passport.

One of the most popular methods for business entrepreneurs to immigrate to the U.S. is by way of the E2 VISA.  The E2 VISA requires a significant investment be made by the immigrant applicant into a new business to be located inside the U.S. and grants the applicant legal residency and the right to work. In lieu of opening a new business, you can also purchase an existing business.

The E2 VISA is relatively easy to apply for, especially when the application is made in the immigrant’s home country through the local U.S. Consulate office.  In most cases, the application has a 30 day processing time prior to the VISA being issued. When issued, the VISA gives the immigrant the right to reside inside the U.S. and to work specifically at the new business.

Once issued, the immigrant can apply for a liquor license from the TABC in the name of the company to which the E2 VISA is connected. You cannot hold an E2 VISA related to a cell phone store, for example, then buy a restaurant as a side business and obtain a liquor license for it.  The new side business must also be owned and operated by the business for which the E2 VISA was issued.

Texas Liquor License has been a pioneer in assisting immigrant applicants with obtaining liquor licenses for their businesses. If you or your client will be pursuing an E2 VISA or if you have a work permit and will need a liquor license for your business, please feel free to contact us with any questions you may have about the application process.

We are excited to work with immigrant entrepreneurs that are committed to opening a successful business in Texas and want to be a permanent part of your team to insure your success in the longterm.

(c) 2015, Texas Liquor License.

 


Yes. Believe it or not, it’s possible to sell frozen daiquiris to go. There is one catch. You cannot make the daiquiri with liquor. I know, that sounds like a depressing daiquiri. You can, however, make it with alcohol.

In order to sell frozen daiquiris to go, you need to be able to mix the drink on  premise and then package and sell it to go. There is only one  permit from TABC that allows you to do that.  That permit, known as a BG (wine and beer retailer’s permit) only permits you to sell beer and wine, not liquor.

Stores like Eskimo Hut, which sells frozen daiquiris to go, are all located in areas that are wet for BG permits (see our blog post for further clarification on this as not all areas are wet for this type of BG permit).  They are not using liquor to make their frozen daiquiris but they are using alcohol. More specifically they use a flavorless wine base that is later flavored to taste like rum, tequila or whatever you need.

The wine base and daiquiri mix are blended and frozen in a frozen drink machine then dispensed into a serving cup. The cup is then sealed in a heat sealed plastic bag. This enables you to sell it to go (alcoholic beverages must be in a sealed container when leaving the store so as not to violate the state’s open container laws). In addition to selling it to go, you can also serve it to your customers to be consumed on premise.

Because of its dual on and off premise characteristic, the BG permit is probably the most versatile permit issued by TABC.  It’s the perfect permit for take out restaurants such as wing and pizza stores, allowing customers to grab a six pack when picking up their wing or pizza to go order.  It’s also the permit used by “craft bars” serving dozens of beers on tap and selling beer to go in growler containers.

If you have a creative project in mind and need some guidance, please contact us. We would love to discuss it with you. Texas Liquor License has a lot of experience working with some of the most creative entrepreneurs in the food and beverage industry.

(C) 2015, Texas Liquor License.


This question stems from a misunderstanding of what exactly constitutes a private club.  The term  “private club” comes from the name of the TABC permit issued to non-profit entities like clubs and organizations which is called a Private Club Registration Permit.  It does not refer to a night club for members only, for example.

The Private Club Registration Permit is issued to non-profit entities including lodges like the Veterans of Foreign Wars (VFW), Elks, etc.  It is not a license to sell alcohol by the glass.  It permits the licensed organization to serve alcohol to its members while charging a service fee by the glass.  By doing so, the organization can keep its inventory of alcohol replenished and the club members are discouraged from over-drinking as every glass comes with a monetary cost just like buying a drink at a bar.  It’s a win-win.

Since the club is a non-profit entity, the members of a private club always jointly own the alcohol inventory which theoretically prevents them from selling it back to its members. Consequently, the club needs the ability to charge a service fee by the glass and the Private Club Registration Permit allows them to do this.

It’s not just organizations like the VFW that form private clubs.  Over the years, the courts have found that anyone, including restaurant owners, have the right to form a private club and obtain a Private Club Registration Permit. Private Club Registration Permits can be issued by TABC anywhere in the State of Texas where not prohibited by local city ordinance, including areas that are otherwise completely dry.  For this reason, it’s no surprise that businesses like restaurants located in dry areas have flocked to the private club concept as a means to provide beer, wine and mixed drinks to their customers without having to serve it free of charge.

In this scenario, a restaurant owner forms a non-profit corporation or an unincorporated association of persons, signs up members and files for a Private Club Registration Permit from the TABC (a task that is next to impossible if you’ve never done it before).  As customers come through the door to dine, anyone wishing to have a beer, a glass of wine or a cocktail can sign up to be a member of the club and be served.  When the check comes, the new member will see a service charge for the drink just as if he bought a drink at a restaurant with a regular liquor license in a wet area.

So is the restaurant making money off this transaction?  Yes, it is. The club itself is a non-profit entity. It cannot make a profit. Nor does it have the manpower to serve drinks.  The club hires the restaurant owner’s for-profit business to manage the alcoholic beverage service for its members. In exchange for providing this service, the club pays the restaurant a share of the service fees collected from members. It does so under the terms of a management agreement between the club entity and the for-profit entity that operates the restaurant (known as the “management company”).

The management agreement is voted on by the club officers and members making the arrangement legal and binding.  The club retains just enough of the service fees to pay for new alcohol inventory and other expenses such as permit renewal fees.  The remainder is paid to the management company as compensation for providing the alcoholic beverage services.

Depending upon the amount of sales generated by the service fees, this can be a lucrative arrangement to the management company. Of course, private clubs that operate in environments that are more akin to a night club are likely to have many more members than a club operating inside of a restaurant and thus will generate more service fees.

We do not recommend that you attempt a private club formation or TABC application on your own. It’s extremely difficult and involves membership meetings, various legal agreements, banking arrangements, etc.  We’ve been doing private club applications for over 30 years and we recommend discussing your project with us before moving forward.

(C) 2015, Texas Liquor License.


Many people are confused to see a night club or bar operating in a dry area.  They hear the term “private club” and wonder what it means. Is it legal to do that or are the owners violating the law?

The Private Club Registration permit is a permit issued by the TABC for non-profit entities such as club organizations and lodges (Veterans of Foreign Wars for example) that have a club house and want to provide alcoholic beverage service to the club members.  You can imagine what serving free drinks to club members would do to the club bank account let alone the public safety issues of serving a bottomless glass.  For this reason, it was obvious that private clubs needed a way to recoup their expenses while simultaneously discouraging excessive drinking at the club house.

Rather than allow private clubs to actually sell alcohol by the glass to its members, Texas created the Private Club Registration permit issued by TABC to allow non-profit entities to charge club members a service fee for every drink served.  The club could recoup its expenses and club members would be discouraged from over drinking as every drink served came with a price.

Over the years, private enterprise came along to test the viability of the Private Club Registration Permit as a means for obtaining alcoholic beverage service in dry counties.  Texas courts upheld the right of private clubs to form and utilize private business locations such as restaurants as their club house. They also hold the right to hire a for profit company (i.e. the restaurant owners) to provide the alcoholic beverage service to club members under the terms of a management agreement.

This management agreement, approved and voted on by the club members, enables the Management Company (the restaurant in our example) to collect part of the service fees being charged to club members as payment for providing the alcoholic beverage service.  The restaurant (the Management Company) is therefore able to earn something for providing a service to the club and allowing it to utilize its business location as the club house.  It probably goes without saying that, more often than not, the officers of the club are the same persons that own and operate the business where the club is located (i.e. the restaurant owners).  Anyone has a right to form a non-profit club and the same holds true for the owners of a restaurant.

For the customer of the restaurant, the experience is simple and straightforward. You arrive to order a meal, decide to order a beer or glass of wine and the server signs you up for club membership before serving you. When the check arrives, you’re charged a service fee for the drink (which on the check looks like you just bought a drink) and you pay a very small fee to enroll into the club. Years ago, when suburban cities were still completely dry, you may remember being issued a “Unicard” which could be used to track your memberships around town.

For the business seeking to host a Private Club Registration permit, the application process is arduous and fraught with mind numbing specificity that if you get wrong can get your application kicked out forcing you to start from scratch.  Many of our private club clients spent months, even a year or more, trying to obtain this permit before seeking our assistance.  We do not recommend you attempt to file this application on your own.  Please contact Dan Lindsey at Texas Liquor License to discuss the application process and requirements.  We are here to help.

We’ve really just scratched the service of private clubs in this blog post and will be exploring more issues associated with private clubs, including money management issues, in other posts.  Please feel free to browse them to learn more.

(C) 2015, Texas Liquor License.


We field a lot of phone calls from potential clients looking to acquire an existing bar, restaurant or club that’s home to a Private Club permit.  The number one question is whether or not they can keep the existing permit to avoid the hassle of applying for a new one.

First, a little about Private Club permits.  This permit was created to license non-profit entities such as lodges (Veterans of Foreign Wars, etc.) that want to serve alcohol to its members in the club house and charge a service fee by the glass to prevent club members from drinking the club’s bank account dry.

This arrangement became a handy loophole that for profit businesses (such as restaurants in dry counties) learned to exploit.  The restaurant owners form a non-profit club and sign up members that vote to use the restaurant as its club house for alcoholic beverage service.  When a customer comes into the restaurant to dine and wants to order a drink, he/she must become a member of the club to obtain the alcoholic beverage service.  When the new member is charged for that drink, the charge is not for the liquor, beer or wine in the glass as all club members jointly own the inventory of alcohol. They are paying a charge for the set up and service of the drink. See our blog post about private clubs for more information on the ins and outs.

If you decide to buy a restaurant, bar or night club operating with a Private Club permit, can you take over the existing permit to save you the hassle of applying for a new one?  Anyone at TABC will tell you that you cannot “buy” a private club, which is true. The private club is not an entity that can be owned by anyone, it’s controlled by the members.  What you are typically buying in a transaction like this are the assets of the business (kitchen equipment, dining room furniture, the POS system, etc.) and, of course, an opportunity to take over a pre-existing cash flow.  Again, for more about the ins and outs of operating a “private club” see our blog post.

When a business that’s home to a private club permit is sold to new owners, the private club doesn’t have to be dissolved. The club members have the opportunity to elect new leadership. The new business owners may be elected as the new club officers and the club can continue to operate using the same permit.

Texas Liquor License assists private clubs all over the state, not only with new permit applications and club formations, but also with change of officer applications.  If you’re planning to purchase a business that’s home to a Private Club permit, feel free to contact us with any questions about the transition to new ownership.

(C) 2015, Texas Liquor License.


Every application for a liquor license in Texas must go thru what’s referred to as a “pre-qualification” process whereby the applicant must obtain certifications from the city, county clerk, state comptroller, etc. before the application can even be turned in to TABC.

Many cities in Texas will not certify a TABC application until the applicant has applied for and obtained a Special Use Permit or Specific Use Permit (“SUP”) from the Building Permits dept. also known as the Planning and Zoning dept. or the Development dept.

It is incredibly important that when you consider obtaining an alcohol permit of any type that you contact your city’s building permit dept. to determine if your business will be required to obtain an SUP to sell alcohol.  You should do that before you sign a lease or make a financial commitment of any kind.  An SUP is a red flag that requires more investigation on your part before deciding to open a business.

The process of obtaining an SUP can range from simple to complex depending upon the layers of bureaucracy involved. Smaller communities can have a simpler process than big cities like Dallas.

An SUP from The Colony, TX can be as simple as turning in an application with the required attachments such as a site plan.  The city of Dallas, however, requires an elaborate production of design documents, traffic impact and parking analyses, the landlord’s written approval of the application, a hefty fee north of $1,000 and  your presence is requested at not one but two hearings- once before the Planning and Zoning Commission and again before the City Council meeting at which your application will be voted on up or down. You may, in fact, find yourself in the position of defending your application in the face of opposition from community stakeholders in attendance to protest your application.

For the vast majority of applications (restaurants, gas stations and convenience stores), there is virtually no risk of coming face to face with a protest during the SUP process.  In fact, most cities do not require an SUP for these types of businesses.  The SUP process is used largely as a means to insure that local stakeholders in the community (primarily residents) have every opportunity to scrutinize the impact that a business selling alcohol will have on their neighborhood and quality of life.  In the crosshairs are bars, liquor stores and, most importantly, night clubs.

If you’re a bar or night club operator, we would go as far as recommending that you make your building lease subject to obtaining an SUP from the city in the event an SUP is required.  If you can’t obtain the required SUP you will never be granted a certificate of occupancy from the city and your TABC application will not be certified. You will be out of business before you ever get a chance to open your doors.

Texas Liquor License does assist in the SUP process as part of the services we offer to our clients.  If you’ve already run into this problem, please feel free to contact us with any questions you might have. We are happy to assist in any way we can, even if it’s just to point you in the right direction.  We can let you know what to expect of the process and what the best approach may be for your business.

(C) 2015, Texas Liquor License.