What to Ask Before Applying for Liquor License in California

If you’re thinking about selling alcohol at your bar or restaurant, you’ll want to ask yourself these questions prior to starting the application process.

What type of license best suits the needs of my restaurant?  Two of the most common license types for restaurants are (a) Type 41 – beer and wine only, and (b) Type 47 – beer, wine and hard liquor.  An important state requirement to be aware of is that your restaurant must be a “bona fide eating place”. This means that your place of business must have a suitable kitchen equipped to serve ordinary meals (versus only appetizers to accompany drinks), and show that a minimum of 51% of your gross receipts are from food sales.

What type of local permit do I need to serve alcohol?  Before issuing a state liquor license to you, the ABC requires that you obtain any zoning permits that may be required by your local municipality.  These zoning permits are most often called Conditional Use Permits (CUP) and, although the CUP process may occur concurrently with the state process, it is different than a liquor license.

How many other restaurants are serving alcohol in the area? Both local municipalities and the ABC monitor the number of restaurants serving alcohol within census tracts to avoid “overconcentration” and/or “high crime” rates. If either overconcentration or high crime rates exist, then you may need to obtain a finding of “public convenience and necessity” (PCN), which may include an additional public hearing. By state law, if the local municipality does not grant a PCN approval, then the ABC cannot approve your license application.

How much time am I willing to spend obtaining my license?  The time required to obtain zoning approval can take as little as 3 months to over 12 months.  The time to obtain ABC approval can also vary, but usually not as widely.  Some local municipalities offer expedited application review that could cut the approval time in half, but costs considerably more than standard review.  In the City of Los Angeles for example, expedited review could double your application fee.

What can I afford to spend obtaining my liquor license?  Submittal fees for a CUP in the City of Los Angeles are approximately $8,000 for standard review and $14,500 for expedited review.  For your state license, submittal fees are approximately $650 for a Type 41 license, and approximately $12,000 for a Type 47 license.  If a new license is unavailable, you may be able to purchase an existing license, which could cost about $30-50,000.

 

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