How to Get a Liquor License in California

How to Get a Liquor License in California

The First Step to Starting a Bar

Many people dream of starting and owning their own restaurant or bar.  Especially in the City of Angeles, owning a restaurant or bar carries a very distinct level of acclaim, panache, and sophistication.  However, while the concept itself is exciting to most, the work required in simply starting the process of opening a restaurant or bar is confusing, complicated, expensive, frustrating, and fraught with pitfalls!

The first step in starting any successful restaurant or bar is acquiring a liquor license.  In the State of California, the Department of Alcoholic Beverage Control (ABC) controls the issuance of liquor licenses.  While the process of acquiring a liquor license is multifaceted, complicated, and infinitely varied based on the type of establishment you wish to operate (e.g. bar, club, restaurant, etc.), the general steps to acquiring a liquor license are as follows:

1.       Control a Business Location

2.       Obtain Zoning Permits

3.       Buy Liquor License

4.       File Liquor License Application

Step 1 - Control a Business Location

The first step in acquiring a liquor license is obtaining control over an actual business location.  The ABC will only issue a liquor license to a real, physical retail location, and the basic ABC requirements for controlling a business location are as follows:

1.       Commercial Location - the proposed location for license must be a commercial location (no residential units allowed).

2.       Own Property - you must own the property for the proposed location, or have a lease agreement granting you right to control the proposed location.

3.       Name of Entity on Deed - the name on the property (or lease) must be in the name of the entity (e.g. corporation, partnership, LLC, etc.) who will apply with the ABC for a liquor license.

As stated above, the ABC will require proof that you have control over your proposed business.  However, even if you don't currently own or lease a location, you can still apply for a liquor license by providing the ABC with a signed lease for a business location, or a "letter of intent" with a prospective landlord to lease a commercial location. [Note, to reduce your risk, you should sign your lease so that it is subject to the final approval of your liquor license application.]

Step 2 - Obtain Zoning Permits

The second step in acquiring a liquor license is to comply with any local zoning regulations and obtain zoning permits that may be required by your city.  These zoning permits are generally called "Conditional Use Permits" (or "CUPs").

Zoning Permits

In order to find out if your city requires a zoning permit for the sale of alcoholic beverages at your business location, you will need to contact the zoning department of your local city or county and speak with a planner.  The planner will research the location's zoning information and tell you whether a zoning permit is required for your location. If a zoning permit is required, you will need to prepare and file a zoning application with the city or county - a task that requires the drafting of specialized maps, careful research, notification of local residents of your application, negotiation and the preparation of a written application. You may even have to attend a public hearing before the zoning board to make a case as to why your business should have the right to sell alcoholic beverages.

Zoning Affidavit

The ABC liquor license application requires that the applicant also file a "Zoning Affidavit" (ABC Form 255), indicating whether or not your local city requires a zoning permit for your business location.  Due to the complexity involved in acquiring the necessary zoning permits in any given city or county, it is strongly advised that you get professional help for this step. 

Step 3 - Buy Liquor License

The third step in acquiring a liquor license is actually buying a license from a private seller.  The State of California no longer issues hard liquor licenses, and therefore, these licenses can only be acquired by finding someone in your county who is willing to sell their license to you.  You can use a liquor license broker or try to negotiate the purchase of one directly from a private seller.

Additionally, the State of California requires an escrow account to be opened for the transfer of the liquor license (regardless of whether the liquor license is purchased through a broker or directly from a private party).  This liquor license escrow is not the same thing as a real estate escrow, and has a unique set of escrow requirements mandated by the ABC.  There are several escrow companies throughout California that specialize in liquor license transfers.

Step 4 - File California Liquor License Application

The fourth, and final, step in acquiring a liquor license is actually filing the liquor license application with the ABC.  The type of application you file depends on the specific type of business you intend to operate (e.g. those intending to start a bar could apply for License No. 40, which allows for On Sale Beer, whereas those intending to start a restaurant could apply for License No. 41, which allows for On Sale Beer & Wine at a "bona fide eating place").

After successfully filing your liquor license application, you will need to notify the surrounding community that you are applying for a liquor license.  The ABC requires three forms of notification:

1.       Building - posting a notification on your building for 30 days.

2.       Mail - mailing an official ABC notification to residents within 500 feet of your business.

3.       Newspaper - publishing a public notice in a local newspaper.

As you can see, the process of acquiring a liquor license - one step in a myriad of steps required to successfully start a restaurant or bar - is infinitely complex and highly specialized.  If you are thinking of starting a restaurant or bar, please contact us immediately!  We will provide you with ongoing representation and start-up document preparation - we will prepare all of the ABC documents (other than escrow documents) required by the ABC for a complete application, gather the required information from you and then carefully prepare your application paperwork for filing with the ABC.